TaxTalk Articles

No place to hide: SARS’ big data


Thanks to changes in technology and legislation, SARS access to information is ever increasing.


 “SARS is therefore sitting on an abundance of financial data but it is still not enough.”


Gone are the days when taxpayers could conceal income and assets from the taxman. The advent of the Tax Administration Act (the Act), coupled with a number of international tax initiatives has handed SARS an expansive set of powers to gather information.


The volume and detail of the information that is available to SARS through...

Tax trap for small professional service companies


“A change in law makes professional service businesses vulnerable during a SARS audit, often to the surprise of the businesses owners.”


Government has repeatedly stated its professed love for small business in speeches and in the media.  We even have governmental structures dedicated to small business.  In terms of tax, our legislation includes special income tax relief for small business companies and an alternative turnover tax regime for micro-businesses.  In particular:


  • Small business companies enjoy a 0, 7 or 21 per cent...
The Tax That Failed Us


Duties put in place to protect South African chicken broilers against US imports have been scrapped. But what effect will their absence have?


“One of the claims that the US government made last year, was that if South Africa were to remove its dumping duties on US chickens, it will not impact South African broilers.”


As any child with a neighbourhood clan and some ball-sense will tell you, the first rule of backyard cricket is that you allow the kid whose bat and ball you’re playing with some leeway when it comes to obeying the...

Do revised prescription rules bear serious consequences for the taxpayer?


Amendments to Section 99 now allows SARS to extend prescription. But does this also mean extending uncertainty regarding a businesses’ tax position?


“The recent amendments could mean that it will now take longer for taxpayers to have certainty regarding their tax positions.”


The tax authority now has more powers to decide on the prescription of an assessment, following recent amendments to the Tax Administration Act (TAA), No 28 of 2011.  Prior to the amendment of Section 99, an assessment prescribed after three years in respect of...

Understanding the Tax Implications of the Youth Wage Subsidy


Although the controversial Youth Wage Subsidy, made possible through the Employment Incentive Act (EIA) has been with us for a while, many businesses don’t realise that they should be receiving monetary benefits from it. With its extension beyond 2016 in doubt, businesses have limited time to apply for an ETI reimbursement.


The Youth Wage Subsidy,which came into being through the Employment Incentive Act No 26 of 2013 (ETIA),allows employers to claim a deduction on the amount of PAYE they have to pay over to SARS based on the number and salary of...

A new era for collateral


Certain changes to the TAA mean that certain non-cash collateral will now be treated in the same way as pledged collateral.


The 2015 Taxation Laws Amendment Bill (2015 TLAB) heralds a new era for collateral. With effect from 1 January 2016, a dispensation covering securities transfer tax (STT), income tax and capital gains tax (CGT) will be introduced to ensure that certain non-cash collateral placed by way of outright transfer is treated the same for tax purposes as pledged collateral.


Without such a dispensation, the adverse tax...

Contract manufacturing on behalf of a non-resident: the South African VAT implications


This article examines the South African value-added tax (VAT) considerations pertaining to the zero-rating of contract manufacturing arrangements involving local contractors and their non-resident customers.


In general, South Africa imposes VAT at the standard rate of 14 per cent on the supply of goods or services on a destination basis, that is, VAT is borne by the final consumer of goods or services within the country. The primary mechanism to ensure that only local consumption is taxed in SA is through the zero rating (0 per cent) of goods and...

“Pay Now, Argue Later” Principle: When Must You Pay SARS?


The best way to deal effectively with one of the most controversial principles in tax collection is to understand it’s intricacies. We delve into the “pay now, argue later principle” to prepare you should it arise as an issue for one of your clients.


“It should be kept in mind that objection alone does not suspend the requirement to pay.”




In general commercial litigation where a claim for an outstanding amount is brought against a person, the person is not required to...

Common Myths Regarding “Pay Now, Argue Later”


Despite amendments to S163(3) of the TAA and the Metcash case, “pay now, argue later” is not in all instances irrefutable.


“Every case must be judged on its own merits, and while a particular factor might carry a lot of weight in certain circumstances, it might not be so relevant in another.”


Since last year January, when the number of factors that SARS is required for take into account when considering an application to suspend the “pay now, argue later” principle was reduced from eight to five, it seems to have had an effect on...