A recent decision of the Western Cape High Court has highlighted some critical considerations to be borne in mind when dealing with restraint of trade and non-solicitation clauses contained in, for example, sale of business agreements, if such sales include the goodwill of the business (Grainco (Pty) Ltd v Van Der Merwe and Another 2014 (5) SA 444 (WCC) (11 July 2014)).
Author: Nyasha Musviba
South Africa 2015 Retirement Reform has been postponed
National Treasury’s recent announcement accompanying the draft Taxation Laws Amendment Bill, 2014 (the Bill) confirms the speculation around the postponement of the changes to the tax treatment of retirement savings. The changes were set to impact the tax treatment of contributions to retirement funds and require the annuitisation of provident fund pay-outs. The effective date, which would have been 1 March 2015, will now be delayed for one, or possibly, two years.
Small businesses owners can take a sigh of relief due to public participation by SAIT
Author: SAIT The Income Tax Act in its current form provides an array of tax incentives to incentivise the growth of small business corporations (‘SBC’). A small business corporation is basically, subject to certain exclusions, any close corporation, co-operative or private company of which all the shares are held by natural persons where the gross income of that close corporation, co-operative or private company does not exceed R20 million per year of assessment.
Income tax treatment of client loyalty programme transactions
Author: Sophia Brink (University of Stellenbosch) This article highlights principles that might be used for the tax treatment of client loyalty programme transactions in the hands of the supplier. Function and types of client loyalty programmes A client loyalty programme is a programme through which the clientele and loyalty of members is retained by awarding them points or miles (usually accumulated on membership cards) as reward for the acquisition of goods or services from qualifying suppliers participating in the loyalty programme. These points or miles can accumulate on a membership card or a cash back reward is issued for a predetermined number of points or miles. The points, miles or cash back rewards are linked to a specific rand value and may later be exchanged for goods, services or a discounton the future acquisition of goods or services from the same qualifying suppliers. The supplier will incur an expense in supplying Read More …
Why SARS should consider transfer pricing safe harbours
Author: Jonathan Sweidan (KPMG) Jonathan Sweidan argues that bilateral or multilateral safe harbours should be considered by SARS seeing as they can mitigate the major problem of double taxation. The South African Revenue Service (“SARS”) has declared that transfer pricing is one of the highest priorities in terms of revenue and enforcement.
Farmers are out of the woods – at least for a year
Author: SAIT Earlier this year, most farmers had quite a shock when they’ve heard that National Treasury, through the draft Taxation Laws Amendment Bill, 2014, proposed to remove the zero-rating for VAT purposes that they receive when they buy goods that are consumed for agricultural purposes. A simple showing of a VAT 103 certificate, indicating that the farmer qualifies for the zero-rating was all that it took to ensure that the goods are received at selling price less 14 per cent VAT.
The relevance of relevant material in terms of the draft Tax Administration Laws Amendment Act, 2014
Author: SAIT In the course of carrying out their mandate of assessing and collecting taxes owed to the government, the South African Revenue Services (SARS) frequently has to request “relevant material” from taxpayers. Currently, relevant material is defined as “any information, document or thing that is foreseeably relevant for the administration of a tax Act…” This definition, however, has caused practical challenges for SARS.
SARS must choose its remedies
The decision of Rogers J, in Commissioner for the South African Revenue Service v Tradex (Pty) Ltd and others (9 September 2014, case no 12949/2013, as yet unreported) has raised a number of issues pertaining to the circumstances under which the South African Revenue Service (SARS) is entitled to obtain a preservation order against a taxpayer in terms of s163 of the Tax Administration Act, No 28 of 2011 (TAA). Ultimately it was found that SARS was not entitled to a preservation order as it was not ‘required’ to secure the collection of the taxes that could have become due in that instance.
The OECD/G20 Base Erosion and profit shifting project leaders shed light on the future of the international tax landscape
Author: Lisa Brunton (DLA Cliffe Dekker Hofmeyr) The Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Sharing (BEPS) Action Plan, approved by the OECD Committee of Fiscal Affairs (CFA) in June 2013 and endorsed by the G20 Heads of Government in September 2013, was formulated to combat international tax avoidance by multinational enterprises (MNEs) through artificially shifting profits to low tax jurisdictions and eroding the tax bases of their primary high tax jurisdictions of operation.
BEPS: the OECD releases the first round of recommendations that are intended to bring about the most significant reform of the international tax system since the 1950s
The Base Erosion and Profit Shifting (BEPS) Project is high on the agenda of the South African Government. Senior government officials, including Deputy President Cyril Ramaphosa, political parties and senior South African Revenue Service (SARS) officials have all publically indicated that BEPS remains a matter of concern. In response, the Davis Tax Review Committee has been tasked to evaluate the South African tax system against internationally accepted tax practices and specifically the OECD’s BEPS project. The committee is expected to produce a report later this year.