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

Memorandum on the Objects of the Tax Administration Laws Amendment Bill 2018

The Tax Administration Laws Amendment Bill, 2018 (the ‘‘Bill’’), proposes to amend the Income Tax Act, 1962, the Customs and Excise Act, 1964, the Value-Added Tax Act, 1991, the Securities Transfer Tax Act, 2007, the Tax Administration Act, 2011, and the Customs Control Act, 2014.

SARS
BPR 317 Disposal of Business by way of Asset-for-Share transaction

This ruling determines the income tax and value-added tax (VAT) consequences of the disposal of a business by way of an “asset-for-share transaction” as envisaged in paragraph (a) of that definition in section 42(1).

SARS
BPR 316 Amalgation of companies in terms of Business Rescue Plan

This ruling determines the income tax and value-added tax effect of an amalgamation transaction for consideration involving the assumption of liabilities only.

SARS

TAX CASES

Supreme Court of Appeal - Milnerton Estates Ltd v CSARS

Income Tax – purchase price of erven in a township sold by developer – sales occurring in one tax year and all suspensive conditions fulfilled in that year – transfer registered and purchase price received in following year – whether purchase price deemed to have accrued in year that sale agreements concluded – s 24(1) of Income Tax Act 58 of 1962 – stare decisis

SARS
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

Legislative & Policy
(National Treasury & Parliament)

Media statement: Publication of the 2018 Tax Acts and Accompanying Documentation

The President has signed into law three 2018 tax bills, that give legislative effect to the tax proposals announced by the Minister of Finance in his annual National Budget Speech delivered on 21 February 2018.

  • Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2018 (Act No. 21 of 2018) (2018 Rates Act)
  • the Taxation Laws Amendment Act, 2018 (Act No 23 of 2018) (2018 TLAA) and
  • the Tax Administration Laws Amendment Act, 2018 (Act No 22 of 2018) (2018...
National Treasury
2018 Tax Acts

Click here to view the 2018 Amendment Acts that were promulgated on 17 January 2019.

National Treasury
42172_17-1-2019_TaxationLawsAmendAct23of2018

enactments. ACT To amend the Income Tax Act, 1962, so as to amend

http://www.gpwonline.co.za/Gazettes/Gazettes/42172_17-1-2019_TaxationLawsAmendAct23of2018.pdf...

Ursula Vercueil

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

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
Draft public notice relating to the incidences of non-compliance by a person in terms of section 210(2) that are subject to a fixed amount penalty in accordance with section 210 and 211

The incidences of non-compliance, that are subject to a fixed amount penalty in accordance with section 210(1) and 211 of the Act, are listed for public comment.Next due date for comments: 30 October 2018

SARS

International and Regional News
(OECD and ATAF)

Armenia joins the Inclusive Framework on BEPS

The Inclusive Framework on BEPS welcomes Aruba, bringing to 128 the total number of countries and jurisdictions participating on an equal footing in the Project.

OECD
OECD Tax Talks

With a number of important recent and upcoming developments in the OECD's international tax work, we invite you to join senior members from the OECD's Centre for Tax Policy and Administration for the latest tax update.

International community makes important progress on the tax challenges of digitalisation

The international community has made important progress toward addressing the tax challenges arising from digitalisation of the economy and has agreed to continue working multilaterally towards achievement of a new consensus-based long-term solution in 2020, the OECD announced today.

CPD Events

PROFESSIONAL INSIGHT

PWC Synopsis: Tax Today - January 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
When must a reportable arrangement be disclosed to SARS?

Under the Tax Administration Act, No 28 of 2011 (TAA) persons who enter into certain types of transactions must report the details of those transactions to SARS. These types of transactions are called “reportable arrangements”.The list of transactions that must be reported are set out in s35(1) of the TAA, and in s35(2) of the TAA as read with a SARS notice issued pursuant to that provision.

Ben Strauss - Cliffe Dekker Hofmeyr
The latest news on transfer pricing

In this newsletter you'll find: Regional news: updates from Algeria, Benin, Cameroon, Chad, Morocco, Tanzania, Tunisia and Zambia, TP focus for January: Botswana, ...

Graphene Economics Team
One less issue when issuing tax invoices

A tax invoice plays a pivotal role in the VAT system for suppliers and recipients alike. In terms of the Value-Added Tax Act, No 89 of 1991 (VAT Act), a supplying vendor is obliged to issue a tax invoice that complies with the requirements of the VAT Act within 21 days of making a taxable supply to a recipient. Similarly, a recipient vendor will only be entitled to claim an input tax deduction in respect of a VAT cost incurred for the purpose of making taxable supplies, to the extent that he...

Varusha Moodaley - Cliffe Dekker Hofmeyr
Dutch Supreme Court hands down long-awaited judgment in ‘most favoured nation’ clause dispute

The wait is finally over. On 18 January 2019 the Dutch Supreme Court (Hoge Raad) found in favour of the taxpayer in its judgment under case number 17/04584, (Hoge Raad Judgment) pertaining to the interpretation of the ‘most favoured nation’ provision (Dutch MFN Clause) in the double taxation agreement (DTA) between South Africa (SA) and the Netherlands dated 10 October 2005, as amended by the Protocol concluded on 8 July 2008 and which entered into force on 28 December 2008 (SA/Netherlands...

Mareli Treurnicht - Cliffe Dekker Hofmeyr
PWC Tax Alert -  Foreign earned income

There has been, and still is, considerable concern among South African nationals working abroad relating to the impact of legislated changes to the exemption available to them in respect of remuneration earned by them while working abroad. Essentially, the current exemption is uncapped (i.e. all remuneration earned from services rendered abroad is exempt). With effect from years of assessment commencing on 1 March 2020, only the first R1 million of such remuneration will be exempt.

PWC
A special dispensation: SARS ruling about special trusts

In recent times, the issue of mental health and the importance of caring for vulnerable persons with mental illnesses has become more prominent. Of course, the effect of mental illness on persons may differ depending on the nature of the illness. In the case of very serious forms of mental illness, a person may not be able to look after their own affairs any longer. From a tax perspective, the Income Tax Act, No 58 of 1962 (Act), makes provision for the creation of so-called special trusts,...

Louis Botha - Cliffe Dekker Hofmeyr
How viable are VCCs now?

What happened in the 12J space in 2018? Our article takes a close look at the 2018 amendments to the VCC regime and gauges their effect on the viability of venture capital companies.

Mansoor Parker, Pierre Botha & Anuschka Wischnewski - TaxTalk Magazine
The 12L energy efficiency tax incentive

Our article looks at the role of the energy efficiency tax incentive to encourage more efficient use of a scarce resource. Can it help businesses to save on energy costs and on their tax bills?

Pieter de Villiers - TaxTalk Magazine

Tax News In The Press

Consumers will feel the most budget pain – analysts

Some taxes such as carbon tax and fuel levies will impact negatively on the consumer, who have to dig deeper into their pockets to live.

Eric Naki - The Citizen
#Budget2019 in a nutshell

‘I want to make it clear, the national government is not taking on Eskom’s debt.’

Ingé Lamprecht - Moneyweb
From income tax to green levy, experts weigh in on #Budget2019

Against a backdrop of tough economic times, Finance Minister Tito Mboweni walked a tightrope between appeasing taxpayers and managing the fiscus. Below, tax experts unpack key aspects of his maiden Budget address.

Fin24
Moody's: Mboweni's Budget shows further erosion in SA's fiscal strength

Moody's, the only major ratings agency that has not already downgraded SA's sovereign debt to junk, on Wednesday responded to Finance Minister Tito Mboweni's maiden Budget by saying it "highlights the government’s limited fiscal flexibility amid a challenging economic environment".

Jan Cronje - Fin24
Budget speech 2019: R12.8bn in extra tax from fiscal drag

The 2019 budget review report deceptively promises that this year’s budget speech will “not increase taxes” but actually a number of minor taxes will increase from the start of the new tax year on April 1. Major taxes like valued added tax (VAT) and corporate income tax won’t increase in the upcoming 2020 tax year.

City Press
#Budget2019: South African fuel taxes to increase by 30 cents

South African motorists should brace for more fuel price increases in the coming months.  Not only are higher international oil prices and a weakening rand putting pressure on the fuel price equation, but fuel taxes are also set to rise from April.

Jason Woosey - IOL