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

In General

Guide for tax rates/duties/levies (Issue 14): This guide provides a current and historical view of the rates of various taxes, duties and levies collected by SARS.

SARS
Income Tax Act, 1962

Interpretation Note 1 (Issue 3) – Provisional tax estimates

 

This Note provides guidance on the interpretation of the law relating to provisional tax

SARS
BPR 318 - Corporatisation of a collective investment scheme in property

This ruling determines the tax consequences arising out of the conversion of a collective investment scheme in property to a corporate REIT in accordance with the procedure set out in Notice 42 of 2014 issued by the Registrar of Collective Investment Schemes under the Collective Investment Schemes Control Act 45 of 2001.

SARS

TAX CASES

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
CSARS v Amawele Joint Venture CC (908/2017) [2018] ZASCA 115 (19 September 2018)

VAT – zero rating of supplies of services in terms of s 11(2)(s), read with s 8(23) of the Value-Added Tax Act 89 of 1991 – whether supplies made in terms of the Housing Subsidy Scheme referred to in s 8(23).

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Carbon Tax Bill: finalisation & voting; Financial Matters Amendment Draft Bill: briefing

The Committee met with the National Treasury for finalisation and adoption of the Carbon Tax Bill. The Committee also received a briefing and discussed the Financial Matters Bill.

Parliamentary Monitoring Group
Media Advisory: Save the date - Media Workshop

As part of equipping journalists with information to help them with their reporting of the Budget and related issues, Treasury will host a media workshop on 19 February 2019. Details of what will be presented at the workshop will follow in due course.

Treasury
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

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

Income Tax Act, 1962​

Draft Guide on MAPs: DTAs or tax treaties as they may be referred to, are international agreements between the governments of two jurisdictions aimed at eliminating double taxation with respect to taxes on income and on capital without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance.  Next due date for comments: ​15 June 2018 New!

SARS
Tax Administration Act, 2011

Draft notice about returns to be submitted by a person in terms of section 25:  Persons specified in the Schedule to the Notice must submit returns for the 2018 year of assessment, as defined in the Schedule, within the periods specified in the Schedule. Next due date for comments: 23 May 2018

SARS
​Income Tax Act, 1962

Draft Guide on the calculation of the tax payable on lump sum benefits (Issue 3). Next due date for comments: 29 June 2018 New!​​

SARS

International and Regional News
(OECD and ATAF)

OECD and United Arab Emirates renew partnership to strengthen tax co-operation

The OECD and the United Arab Emirates (UAE) signed a renewal of the Memorandum of Understanding (MoU) agreeing to extend their collaboration in providing regional seminars on international taxation for a further three years, to 2021.

OECD
Public consultation on the tax challenges of digitalisation

As part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS and its Task Force on the Digital Economy (TFDE), the OECD is seeking public comments on possible solutions to the tax challenges arising from the digitalisation of the economy. This public consultation will focus on the key questions identified in the consultation document and raised in the written submissions received as part of the consultation process. A compilation of the written comments received will be published...

OECD
Finland deposits its instrument of acceptance for the Multilateral BEPS Convention

This document contains a list of signatories and parties to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. Under the provisions of the Convention, each jurisdiction is required to provide a list of reservations and notifications (the “MLI Position”) at the time of signature. The MLI Positions provided for each jurisdiction upon the deposit of the instrument of ratification, acceptance or approval and/or signature are...

OECD

CPD Events

PROFESSIONAL INSIGHT

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
Share repurchases and dividend stripping: Where are we?

We look at dividend stripping, anti-avoidance provisions and the state of play in disposing of shares in a deferral transaction.

Heinrich Louw - TaxTalk Magazine
Policy formulation and the 4 seasons of tax law

The cyclic tax law process, much like the seasons, is ever changing, but how exactly it changes can seem mysterious. SAIT’s CEO and former National Treasury insider explains the overall legislative process and then takes a closer look at how policy is formulated.

Keith Engel - TaxTalk Magazine

Tax News In The Press

Slew of tax hikes and fuel increases waiting for consumers down the line

South African consumers, already up to their necks in debt, are in for another shock over the next few months. On Wednesday next week (March 6) petrol is expected to rise by 75 cents a litre while diesel could spike by as much as 92 cents a litre while illuminating Paraffin will increase by 74 cents a litre.

IOL
Sars targets religious entities

The South African Revenue Service (Sars) has its eye on tax exempted churches. Religious entities are not liable for income tax in South Africa and enjoy substantial tax benefits, including receiving breaks on donations.

ENCA
Business Is it possible to turn around SA’s tax regime? Dennis Davis lays it out for us

South Africa’s tax system has the unenviable task of striking a fine balance between providing for those who are presently disadvantaged, while being as conducive to economic growth as possible in a highly unequal society. “If we could grow the economy at 5%, a tax committee would be irrelevant,” High Court Judge Dennis Davis told the Gibs Economic Outlook Conference.

City Press
Venture capital company tax regime under review. Again.

National Treasury has proposed that the venture capital company (VCC) tax regime again be reviewed to prevent abuse.

Ingé Lamprecht - Moneyweb
Finland deposits its instrument of acceptance for the Multilateral BEPS Convention

This document contains a list of signatories and parties to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. Under the provisions of the Convention, each jurisdiction is required to provide a list of reservations and notifications (the “MLI Position”) at the time of signature.

OECD
Expat tax: Treasury willing to hear concerns about new amendments

National Treasury has invited key stakeholders to a workshop early next month to address continued concerns around the amended foreign income tax exemption. The change is set to become effective on March 1, 2020. In terms of the amended section of the Income Tax Act, South Africans working abroad will in future be taxed in South Africa on any foreign income exceeding R1 million. This will have a major impact on the competitiveness of South African professionals and the remuneration policy of...

Carin Smith - Fin24