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

Income Tax Practice Note 2 of 1996 withdrawn 5 August 2019 with effect from 1 April 2012
Draft Income Tax Amendment Bill 30 July 2019
Draft Explanatory Memorandum to the 2019 Draft Income Tax Amendment Bill

TAX CASES

A Company v The Commissioner for the South African Revenue Service (IT 24510) [2019] ZATC 1 (17 April 2019)

The taxpayer carries on business as a high street retailer of clothing, comestibles and general merchandise.  As part of the facilities offered to its customers, it ‘sells’ gift cards.  These can be redeemed for goods at any of the taxpayer’s stores.  The question in this appeal from the additional assessment by the Commissioner of the taxpayer’s taxable income in the 2013 fiscal year is whether the revenue from the ‘sale’ of the taxpayer’s gift cards during that year constituted part of its...

SARS Court Cases
MRS X vs C:SARS - TC - IT 13380 - 27 January 2016

The applicant derived income as beneficiary of four inter vivos trusts, namely the A Trust, the B Trust, the C Trust and the D Trust. Her tax affairs for the 2009 tax year were subjected to an audit by the respondent and it was found that the applicant had under-declared her income for 2009.

SARS Court Cases
XYZ CC vs Commissioner of the South African Revenue Services

The Commissioner for the South African Revenue Service (“SARS”) brought an application in terms of rule 56(1)(b) of the Rules of the Tax Court for default judgment against the taxpayer in terms of section 129(2) of the Tax Administration Act, 28 of 2011 (“the Act”).

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Statement of the National Revenue, Expenditure and Borrowing as at 30 June 2019
Treasury
Publication of the 2019 Draft Income Tax Amendment Bill for public comment
Treasury
Government’s response to the rating action by Fitch Ratings (Fitch)
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
Income Tax Act, 1962

Draft Interpretation Note – Apportionment of surplus and minimum benefit requirements – Pension Funds Second Amendment Act. 

Due date for comments: 31 May 2019

 

 

SARS

International and Regional News
(OECD and ATAF)

Ukraine deposits its instrument of ratification for the Multilateral BEPS Convention

Today, Ukraine 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 BEPS by multinational enterprises. For Ukraine, the MLI will enter into force on 1 December 2019.

Ukraine deposits its instrument of ratification for the Multilateral BEPS Convention

Today, Ukraine 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.

Global Forum on tax transparency reveals new compliance ratings for nine jurisdictions

The Global Forum on Transparency and Exchange of Information for Tax Purposes published today nine peer review reports assessing compliance with the international standard on transparency and exchange of information on request.

CPD Events

PROFESSIONAL INSIGHT

PWC Tax Alert - Dutch “Most Favoured Nation Clause”: South African Tax Court finds in favour of taxpayer

The “most favoured nation clause” (or “MFN clause”) in the double taxation agreement between South Africa and the Netherlands (“the SA-Netherlands DTA”) has been the subject of a number of our Tax Alerts.

PWC
SARS issues binding class ruling regarding unbundling transaction

Section 46 of the Income Tax Act, No 58 of 1962 (Act) provides tax relief where a company (Unbundling Co) wishes to unbundle its shareholding in a subsidiary (Unbundled Co), to the company’s own shareholders. The Unbundling Co’s shareholders’ indirect shareholding in the Unbundled Co is converted to a direct shareholding, in proportion to their shareholding in the Unbundling Co.

Tsanga Mukumba and Louis Botha - Cliffe Dekker Hofmeyr
SARS AUDIT: HOW FAR BACK CAN THEY GO?

Imagine SARS is conducting an audit on a company for the most recent year of assessment. The company has a loan payable to a shareholder which originated in the 1980’s. SARS decides to extend the scope of the audit to the shareholder in order to establish whether the amount of money lent to the company in 1980 reflects/represents an after-tax amount, effectively resulting in an audit in respect of the 1981 year of assessment, some 38 years after the 1981 tax year ended. Can SARS extend its...

Legal professional privilege protection available to taxpayers too

In a litigious context, the doctrine of legal professional privilege provides that communications between an attorney and a client are protected from disclosure in litigious proceedings. The protection afforded to a litigant in terms of this doctrine is aimed at encouraging and protecting the full and honest disclosure of information by clients to their legal advisors when seeking legal advice, which is necessary for the proper functioning of the South African adversarial system of...

AUTHORS: Emil Brincker and Louise Kotze - Cliffe Dekker Hofmeyr
A (quin)tessential consideration for the commercial property sector: Section 13quin of the Income Tax Act

Recently, the South African Property Owners Association (SAPOA) released its Office Vacancy Report for the first quarter of 2019. According to one of the key findings of the report, there has been a quarter on quarter decline in SAPOA’s assessment of the square meterage of commercial property under development from 559,000 sqm to 404,000 sqm.

AUTHORS:Tsanga Mukumba and Louis Botha -Cliffe Dekker Hofmeyr
Tax Alert

Legislative developments: Draft amendments to anti-dividend stripping rules released for public commentAs 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...

AUTHORS: 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

Tax News In The Press

Draft Explanatory Memorandum to the 2019 Draft Income Tax Amendment Bill
Media statement of the 2019 Draft Income Tax Amendment Bill
SARS Mop-Up Under Way As Two Key Executives Placed On Precautionary Suspension

[Daily Maverick] The cleanup at SARS is starting to kick in, seven months after the release of the final report of the Nugent Commission of Inquiry into Tax Administration and Governance.

SARS Suspends Three Executives

[SAnews.gov.za] The South African Revenue Service (SARS) has suspended three senior executives who face disciplinary action over serious misconduct allegations.

Eskom Reports Major Losses

[SAnews.gov.za] Power utility Eskom on Tuesday recorded a net loss after tax of R20.7 billion in the year ended March, up from a previous loss of R2.3 billion.

First payment for provisional taxpayers looms

Provisional taxpayers who have not yet submitted their first tax return for the current tax year are advised to do so as quickly as possible.

Amanda Visser