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FEATURED EVENT: 2019 Cross-border Considerations for the Global Client

Globally, the tax and client advisory industry is dynamic and subject to continuous change which requires a persistent search for knowledge and trusted networking partners. Local and international changes in law and general trends highlight the reason for the annual Cross-border Considerations for the Global Client event. Various articles have been published about changes in domestic and international laws and conflicting views have been expressed. A client’s current advice document might be...

Tax Conference

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

BCR 067 Tax consequences for members arising out of conversion of association to private company

This ruling determines the income tax and value-added tax (VAT), consequences for the members of an unincorporated universitas, formed to administer a national sporting league, (the Applicant) of its conversion to a newly formed private company (Company A) and related matters.

SARS
BPR 320 Conversion of association to private company

This ruling determines the income tax, value-added tax (VAT), transfer duty and securities transfer tax (STT) consequences of the conversion of an unincorporated universitas to a newly formed private company and certain related matters.

SARS
Clarification – Filing threshold and dates

The South African Revenue Service (SARS) has noted that the criteria for taxpayers who may not be required to file an income tax return has been wrongly interpreted. 

SARS

TAX CASES

Mark Roy Lifman,The Close Corporations, Companies and Trusts vs C:SARS (Case Number: 22820/2016)

This is an application to stay the execution process commenced pursuant to taxes raised following the late filing of VAT and tax returns, and a section 50 enquiry - Tax Administration Act, 28 of 2011.

SAFLII
Benhaus Mining (Pty) Ltd v CSARS - 22 March 2019

A company that excavates ground and digs up mineral-bearing ore for a fee on delivery to another entity that processes the ore, undertakes mining operations within the meaning of ss 1 and 15(a) of the Income Tax Act 58 of 1968. It is thus entitled to claim deductions of the full amount of capital expenditure on mining equipment in the tax year in which it is incurred, in terms of s 36(7C) of the Act

SARS Court Cases
ABC Company v The Commissioner of SARS (IT 14106) (31 January 2019)

Whether the taxpayer was entitled to be a PBO and be allowed a tax exemption in terms of section 10(1).

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

2019 Draft Taxation Laws Amendment Bill

National Treasury publishes an initial batch of the 2019 draft Taxation Laws Amendment Bill to cover specific provisions that require additional consultation. National Treasury will be publishing the full text of the 2019 draft Taxation Laws Amendment Bill for public comment in the mid July 2019.

National Treasury
Media Statement of 2019 Carbon Tax Act and Related Documents

The Carbon Tax Act No 15 of 2019, which comes into effect from 1 June 2019, as announced by the Minister of Finance in the 2019 Budget. The Act was gazetted on 23 May 2019 (Gazette No. 42483), together with the Customs and Excise Amendment Act No. 13 of 2019 (Gazette No. 42480). Climate change represents one of the biggest challenges facing human kind, and the primary objective of the carbon tax is to reduce greenhouse gas (GHG) emissions in a sustainable, cost effective and affordable...

National Treasury
Report on the consultation process for the amendments to regulations in terms of Financial Sector Regulation Act, 2017

Draft amendments to the Financial Sector Regulations, made in terms of sections 61(4), 288 and 304 of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017) (FSRA), and which were published in Government Notice No. R405 of 29 March 2018, are set out in the Schedule, were published for comment on 18 March 2019, and were also submitted to Parliament on that date. The period allowed for comment was until close of business on 27 March 2019, in accordance with section 288(8) of the FSRA....

Treasury

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

Taxation Laws Amendment Bill

As introduced in the National Assembly (proposed section 77)

The English text is the official text of the Bill

New due date for comments:25 June 2019 

 

SARS
Draft Bill – 2019 Draft Taxation Laws Amendment Bill

2019 Draft Explanatory Memorandum on the 2019 Draft TLAB. Due date for comments: 25 June 2019

SARS
Implementation of environmental levy on carbon emissions

Draft tariff amendment notices to amend: Due date for comments extended to 14 June 2019

SARS

International and Regional News
(OECD and ATAF)

Expansion of the MLI Matching Database

The OECD has expanded the functionality of the MLI Matching Database to include information on entry into effect.

Russian Federation deposits its instrument of ratification for the Multilateral BEPS Convention

Today, the Russian Federation deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (multilateral convention or MLI) with the OECD’s Secretary-General, therewith underlining its strong commitment to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises.

OECD expands transfer pricing country profiles to cover 55 countries

The OECD has just released new transfer pricing country profiles for Chile, Finland and Italy, bringing the total number of countries covered to 55. In addition, the OECD has updated the information contained in the country profiles for Colombia and Israel.

CPD Events

PROFESSIONAL INSIGHT

12/06/19 Tax Alert - Legislative developments: Draft amendments to anti-dividend stripping rules released for public comment As was announced in the Budget, it is proposed that the amendments take effect on 20 February 2019 (i.e. on Budget Day). Dow...
PWC
PWC Synopsis May 2019

A monthly journal, published by PwC South Africa, that gives informed commentary on current developments in the tax arena, both locally and internationally. Through analysis of and comment on new laws and judicial decisions of interest, Synopsis helps executives to identify developments and trends in tax law and revenue practice that may affect their business.

PWC
Splitting hairs… VAT Case 1558

Suppliers often make single supplies of goods or services to their customers which comprise of various component parts such as, for example, various goods purchased in a supermarket, some of which are subject to VAT at the standard rate and some of which are zero rated. Other examples include tour operators who charge a single fee for a tour package which may comprise of standard rated accommodation and zero-rated international travel, or an insurer who charges a single premium for providing...

Varusha Moodaley and Gerhard Badenhorst - Cliffe Dekker Hofmeyr
Proposed amendments to clarify income tax treatment of statutory mergers

Sections 113 and 115 of the Companies Act, 2008 provide for an automatic statutory merger of two companies. The transfer occurs by way of operation of law, and barring any express prohibition to the contrary in a contractual arrangement, no third party consent is generally required to implement the merger. This type of transaction may typically give effect to a desired corporate reorganisation, in terms of which an existing company is liquidated, wound up and/or deregistered. 

Authors: Robert Gad, Megan McCormack and Jo-Paula Roman - ENS
Carbon Tax

Carbon tax effective from 1 June 2019 following Presidential
assent.

 

Deloitte
Norton Rose Fulbright advises on US$416m financing of massive Texas solar farm

Norton Rose Fulbright advised Longroad Energy Holdings LLC on corporate and tax matters related to a total financing package of approximately US$416 million for its Prospero solar farms in West Texas, allowing for the project's financial close and start of construction.

Tax exemption is not a formality – the Tax Court considers the PBO status of a non-profit company

In terms of s30 of the Income Tax Act, No 58 of 1962 (Act), an entity can only become a public benefit organisation (PBO) if it meets the requirements in that section and is approved by the South African Revenue Service (SARS) as a PBO. In practice, to be approved as a PBO, an application must be submitted to SARS’s Tax Exemption Unit (TEU).

Louis Botha & Louis Kotze - Cliffe Dekker Hofmeyr
Substance over form: A UK judgment about the avoidance of capital gains tax

In the United Kingdom, capital gains tax (CGT) under the Taxation of Chargeable Gains Act, 1992 (TCGA) is charged, inter alia, where a taxpayer disposes of an asset for an amount greater than the base cost at which such taxpayer initially purchased the asset.

Louis Botha and Tsanga Mukumba - Cliffe Dekker Hofmeyr
PWC Tax Alert - Promulgation of the Carbon Tax Act

On 23 May 2019, two important notices were published in the Government Gazette. Notice no. 42483 is to the effect that the Carbon Tax Act, 2019 (Act No. 15 of 2019), has been assented to by the President, and Notice no. 42480 is to the effect that the amendments to the Customs and Excise Act, 1964 (Act No. 91 of 1964), which make provision for the administration and collection of the carbon tax, have also been assented to.

PWC

Tax News In The Press

And SOE It Goes - As Turnaround Plans Stumble, SABC Is the Latest Entity to Face Financial Point of No Return

[Daily Maverick] The SABC board says a 'communication blackout' at the state broadcaster is 'imminent'. With its debt building insurmountably, the SABC joins the queue of state-owned entities with begging bowls out to National Treasury. The progress in turning around SOEs - the Ground Zero of State Capture - has been slow and faltering, beset by rising debt, leadership challenges and ambivalence from the government.

'This Is a WhatsApp Whistleblowing Message. I Don't Know How Else to Do It'

[Daily Maverick] Out of desperation while on a pilgrimage in France, former SAA treasurer Cynthia Stimpel fired off a text message to officials at National Treasury, warning them of a dirty deal in the making. It was ignored.

Mark Lifman Heads to SCA Over SARS Seizure Ruling

[News24Wire] Controversial Cape Town businessman Mark Lifman has turned to the Supreme Court of Appeal (SCA) after losing his latest bid to stop SARS from seizing his assets in order to recover outstanding taxes amounting to R388m.

Eskom Tender Irregularity Referred to Public Enterprises

[SAnews.gov.za] The Broad-Based Black Economic Empowerment (B-BBEE) Commission has referred its findings into the irregular awarding of a tender at an Eskom power station to the Minister of Public Enterprises and Director General of National Treasury.

Financial emigration is the new way out

The taxman targets foreign earnings in excess of R1m – but at what cost to the country?

Ciaran Ryan - Moneyweb
SARS welcome Mark Lifman court ruling

SARS welcomes the judgement handed down against Mr. Mark Roy Lifman and 35 applicants in the Western Cape High Court today, Tuesday 11 June 2019.

SARS