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Release of eFiling Profiles

The SAIT Technical Department has recently received an influx of queries regarding the release of eFiling profiles. Please bear in mind that as a practitioner it falls within your right to retain your working papers on a particular client but you may not prevent a taxpayer from submitting a tax return. Declining an eFiling tax type move request would be hindering the taxpayer’s ability to submit his tax return. We believe that it is unlawful to prevent a taxpayer from submitting their Income...

SAIT Technical
FEATURED EVENT: 2018 Webinar: Taxes on Death

Benjamin Franklin famously quoted that "Nothing is certain except death and taxes.” Various tax implications are triggered upon death, including estate duty, normal income tax consequences for the deemed disposal of assets, and VAT (if applicable). This live webinar, presented by Piet Nel, will cover the tax implications associated with property transfers on death (e.g., from a natural person to the estate and then to an heir, including a trust).

Tax Conference
FEATURED EVENT: 7th Annual Africa Transfer Pricing Summit 2018

The Annual Transfer Pricing Conference has become the pre-eminent annual event for South African transfer pricing specialists to share ideas and update themselves on the latest transfer pricing trends. The event seeks to provide both a South African and regional perspective on the topic through transfer pricing experts from around the continent, including private practitioners and government officials from specific revenue authorities and from international organisations. The 7th annual...

Tax Conference

Tax Administration & Interpretation
(SARS and Office of the Tax Ombud)

IN10 (Issue 2) - Skills development levy exemption - Public benefit organisations
IN64 (Issue 3) - Exemption Income Tax Bodies Corporate Share Block Companies
Skills development levy exemption - public benefit organisations

TAX CASES

Sasol Oil v CSARS (923/2017) [2018] ZASCA 153 (9 November 2018)

Contracts for the sale of crude oil by one entity within the Sasol Group, to another, and the back to back sale of the same oil to yet another entity in the group, were not simulated in order to avoid a liability to pay tax; nor were they entered into solely for the purpose of avoiding the payment of tax for the purpose of s 103(1) of the Income Tax Act 58 of 1962.

SARS Court Cases with compliments of Webber Wentzel
Commissioner for the South African Revenue Service v Digicall Solutions (Pty) Ltd (927/2017) [2018] ZASCA 137 (28 September 2018)

Income Tax Act 58 of 1962 – s 103(2) – taxpayer company – successive changes in shareholding in consecutive tax years – sole purpose from time of first change in shareholding to preserve and utilise assessed loss for set-off against future income – assessed loss carried over to next tax year – second acquisition of shares – income thereafter received by taxpayer – income indirect result of first acquisition of shares – set-off of assessed loss against income disallowed.

SARS Court Cases
C:SARS v Volkswagen S A (Pty) Ltd (1028/2017) [2018] ZASCA 116 (19 September 2018)

Income tax – valuation of stock at year end – s 22(1)(a) of Income Tax Act 58 of 1962 – whether stock to be valued in accordance with International Accounting Standard 2 (IAS 2 or AC 108) at net realisable value.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Media Statement: Local Government adopted Capital and Operating Expenditure budgets for the 2018/19 Medium Term Revenue and Expenditure Framework (MTREF)
Treasury
PC Finance: 2018 MTBPS: National Treasury response to submissions

 

The Standing Committee on Finance together with the Select Committee on Finance met to hear responses by National Treasury to the public submissions on 2018 Revised Fiscal Framework. 

 

Parliamentary Monitoring Group
MTBPS 2018

The Minister of Finance, Hon. Tito Mboweni presented the 2018 Medium Term Budget Policy Statement (MTBPS) to Parliament. Click here to view all the documents relating to the MTBPS, the Minister's speech and webcast. 

National Treasury

Call For Comment
SAIT member comments can be directed to taxpolicyadmin@thesait.org.za

Media Statement and related documents: Publication of the Draft Carbon Tax Bill for public comment

The Minister of Finance recently announced the implementation of the carbon tax effective from 1 June 2019. The Draft Carbon Tax Bill makes provision for the carbon offset allowance in terms of Section 13. The National Treasury today publishes the Draft Regulation on the Carbon Offset for a second round of public comment and further consultation. Next due date for comments: 14 December 2018

National Treasury
Inviting technical tax proposals for Annexure C of the 2019 Budget Review

 

National Treasury invites taxpayers, tax practitioners and members of the public to submit tax proposals of a technical nature (and not of a policy nature) to be considered for possible inclusion in Annexure C of the 2019 Budget Review. Next due date for comments: 23 November 2018.

SARS & National Treasury
REQUEST FOR SUBMISSIONS: REVIEW IN TERMS OF S16(1)(B OF THE TAA 2011 (SUBMISSION DEADLINE HAS BEEN EXTENDED TO 30 NOVEMBER 2018)

The Tax Ombud Judge Bernard Ngoepe is conducting an investigation into Fluidity of the Pay as you earn statements of accounts and SARS’s disregard of the timeframes prescribed by the Rules for the resolution of disputes. Stakeholders are requested to make submissions on the investigation which follows the recent approval by the then Finance Minister for the Tax Ombud to investigate the South African Revenue Service (SARS) in relation to systemic and emerging issues arising from taxpayers and...

Tax Ombud

International and Regional News
(OECD and ATAF)

OECD releases guidance on Synthesised texts for providing clarity on the impact of the Multilateral Instrument

This new guidance presents a clear overview of the modifications to tax treaties resulting from the Multilateral BEPS Convention which entered into force on 1 July 2018. A Secretariat note, also released today, clarifies the entry into effect rules for tax treaties of jurisdictions that deposited their ratification instruments last September.

OECD releases guidance on Synthesised texts for providing clarity on the impact of the Multilateral Instrument

Progress continues on the implementation of a landmark treaty to improve the international tax system which now covers 84 jurisdictions and will become effective on 1 January 2019 for the first 47 tax treaties concluded among the 15 jurisdictions that deposited their acceptance or ratification instrument.

OECD
11th Meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes, 20-22 November 2018, in Punta del Este, Uruguay

Global cooperation to fight tax evasion and avoidance has grown rapidly over the past few years. Tax Transparency and Exchange of Information between tax authorities about financial assets and activities of their taxpayers abroad has proved to be a valuable tool in this fight.

CPD Events

PROFESSIONAL INSIGHT

13/11/18 Tax Alert - Revision of anti-avoidance rules on share buy-backs and dividend stripping In the 2017 legislative cycle certain amendments were made, aimed at strengthening the “anti-dividend stripping” rules. The 2018 TLAB includes propose...
PWC
Important judgment on simulation handed down by Supreme Court of Appeal

On 9 November 2018, the South African Supreme Court Appeal (“SCA”) handed down an important judgment in which it upheld Sasol Oil (Pty) Ltd’s appeal against a judgment of the Gauteng Tax Court. The facts of the case were complex, but concerned certain back-to-back supply transactions entered into by a number of entities, including Sasol Oil, which the South African Revenue Service (“SARS”) contended were simulated. An Isle of Man company in the Sasol group (“SOIL”) sold oil to a UK group...

by the tax department
Practical considerations in managing transfer pricing across Africa

Applying globally determined transfer pricing policies can be challenging on the African continent, with its diverse markets and unusual business models. Our authors review the challenges of being compliant in a shifting landscape.

Michael Hewson & Lisa Di Domenico for TaxTalk Magazine
Transfer pricing observations and reflections

Our article provides the perspective of a relative newcomer to Africa on the transfer pricing scene in our continent.

Marius Leivestad for TaxTalk Magazine
Transfer pricing: Evolution or revolution?

This article takes a brief walk down memory lane on the evolution of transfer pricing in South Africa with respect to the legislation and audits, and looks at future developments we can possibly anticipate.

Nishana Gosai for TaxTalk Magazine
Transfer pricing for financial transactions: Expect significant changes

A discussion draft recently published by the OECD could mean significant changes to transfer pricing when it comes to loans and guarantees, cash pooling and captive insurance within groups of companies. Our author gives advice on timeous preparation of the documentation required to support a position taken.

Okkie Kellerman for TaxTalk Magazine
South Africa & Africa: Transfer Pricing Documentation in a Post-BEPS World

Our article guides you through all the recent developments in transfer pricing documentation requirements in South Africa and the rest of Africa.

Christian Wiesener for TaxTalk Magazine
The risks of refunds

This article looks at when a taxpayer is entitled to a refund, when SARS can refuse to pay a refund and the remedies available to taxpayers in the face of such a refusal.

Natasha Wilkinson for TaxTalk Magazine
The Assign Services case: Its effect for the “employer”

A recent judgment of the Constitutional Court pronounced on whether workers in some circumstances are employees of a labour broker or of the company where they are placed. We look at the implications in terms of the Fourth Schedule.

Advocate Kevin Burt for TaxTalk Magazine

Tax News In The Press

Why Removal of Tax Boss Is Key to Ramaphosa's Chances of Success

[The Conversation Africa] South African President Cyril Ramaphosa has changed the country's political landscape significantly since he came to power in February 2018. This has strengthened his position to carry out his "renewal agenda".

Donations tax: Should I include it on my tax returns?

Donations tax is tax payable at a flat rate on the value of property disposed of by donation. Should it be included in your tax returns? A Fin24 user wanted some advice.

Allison Jeftha - Fin24
IN64 (Issue 3) - Exemption Income Tax Bodies Corporate Share Block Companies
The use of special trusts

The South African Revenue Service (Sars) recognises the use of trusts for purposes other than wealth transfer, and specifically for persons with disabilities and minor children who are not able to produce enough income to take care of themselves, and who also cannot take care of themselves. Sars introduced the concept of a special trust to bring about more favourable tax treatment for such trusts.

Phia van der Spuy - IOL
Ire over verification demands

A day doesn’t go by without Tax Consulting South Africa being contacted by a frustrated taxpayer who has experienced a delay in his or her VAT refund from the South African Revenue Service (Sars), said Christopher Renwick, an attorney at Tax Consulting SA. This is more than a year after the Tax Ombud, Judge Bernard Ngoepe, issued a rather critical report on the Sars VAT refund structure. “Perhaps the report has fallen on deaf ears,” he said.

Christopher Renwick - IOL
Dodgy bookkeeper jailed for R8m in tax fraud

The luck of a dodgy tax practitioner has run out after he was found guilty of attempting to defraud the South African Revenue Service (Sars) of over R8-million. Seshin Naraidu‚ a bookkeeper from Johannesburg‚ was sentenced to six years’ imprisonment by the Johannesburg High Court on Monday after a drawn-out legal battle that lasted almost four years.

Nonkululeko Njilo - Times Live