The Taxation Laws Amendment Act, No. 31 of 2013 (TLAA) introduced legislative amendments aimed at streamlining the Value-Added Tax (VAT) registration process as contained in the Value-Added Tax Act, No. 89 of 1991 (VAT Act). In the 2013 Budget, the Minister of Finance, Pravin Gordhan (Minister) indicated that there would be efforts to reorganise the VAT registration process to ease the burden of complying with the requirements for registration. This culminated in amendments being made to s23(3)(b)(ii) and s23(3)(d) of the VAT Act, respectively.
Author: Nyasha Musviba
Keeping the lid on Pandora's Box
If only all judgments were formulated with the elegant reasoning and perspicacity of the judgment delivered by Rogers J in the Western Cape Division of the High Court in Kluh Investments (Pty) Ltd v Commissioner for the South African Revenue Service (case number A48/2014, as yet unreported) on 9 September 2014. The appeal was against the dismissal of an appeal brought in the tax court against an additional assessment levied by the South African Revenue Service (SARS) in respect of the 2004 – year of assessment. SARS added an amount of R110 million to the appellant’s taxable income on the basis that the gross income giving rise to such taxable income had accrued to the appellant during its 2004 year of assessment on disposal of a plantation as contemplated in Paragraph 14 of the First Schedule to the Income Tax Act 58 of 1962 (Act).
Proposed changes to secondary transfer pricing adjustment
National Treasury and the South African Revenue Service (SARS) recently released the draft Taxation Laws Amendment Bill 2014 (Bill). One of the key proposals in the Bill is to change the secondary transfer pricing adjustment mechanism from a deemed loan to a deemed dividend. Transfer pricing is a concern because, where for example a local party undercharges a foreign connected party for goods or services, or where the foreign connected party overcharges the local party, the parties to the transaction can effectively manipulate their income and taxable profits can be shifted from South Africa to other jurisdictions.
Global economies must lower carbon emissions at five times the levels currently achieved
PwC analysis of economic growth rates and greenhouse gas emissions data for G20 economies PwC’s climate change analysts estimate that the global economies need to cut their energy related carbon emissions for every $ of GDP by 6.2% every year from now to 2100. That is more than five times the rate currently achieved.
Online foreign gaming providers required to register for VAT under new legislation – even if they are not registered under the National Gambling Act
New legislation requiring foreign suppliers of electronic services to register for Value Added Tax (VAT) in South Africa may prove to be challenging for those providing online gaming services – especially as the supply of these services is not yet fully included in South Africa, says PwC. “Recent changes to the VAT legislation place a VAT registration obligation on these suppliers, irrespective of whether they are registered under the National Gambling Act of 2004,” says Gerard Soverall, PwC Head of Indirect Tax for Gauteng. The new legislation requiring foreign suppliers of electronic services to register for VAT in South Africa as soon as the total value of such supplies reaches R50 000 (about USD 4 500) came into effect from 1 June 2014.
Sars wins war on tax dodgers
Author: Babington Maravanyika (IOL) Johannesburg - More than 260 cases of tax evasion were successfully prosecuted by the National Prosecuting Authority during the last financial year. Sars spokeswoman Marika Muller said about 330 tax-related criminal cases were finalised during the 2013/14 financial year, of which 267 were successfully prosecuted.
Finance Minister Nhlanhla Nene assures South Africans their pensions are safe
Finance Minister Nhlanhla Nene has called on South Africans to refrain from cashing in their provident fund savings when they resign or change jobs, adding that rumours that their retirement savings are under threat were “false”. The Minister was responding to rumours that have been doing the rounds in the public service circles that government was planning to nationalise employee pension funds.
Changes in Taxation Laws Amendment Bill in spotlight
Author: Rob Cooper The draft 2014 Taxation Laws Amendment Bill (TLAB) brings with it some important proposed changes to the formula that employers use to calculate the fringe benefit value of their contributions to employees’ defined benefit funds. The TLAB raises the possibility of making incorrect payroll calculations in certain circumstances, unless legislators make changes to some of their formulas and definitions. Under retirement reforms legislated in 2013, employer-paid contributions to a pension, provident or retirement annuity fund must be valued as a fringe benefit for employees with effect from 1 March 2015.
Qualifying for turnover tax or not
A Fin24 user is not sure when a business must register for turnover tax, since the term “service provider” is very wide. He writes: I need some clarification on which industries and types of businesses may register for turnover tax. It states that “it is not available to labour brokers, personal service providers or persons that render professional services”. “Public benefit organisations and recreational clubs also do not qualify, since they already enjoy specific concessions.” On the surface it seems like a lot of businesses would not qualify as most small business setups are providing a service of some sort, whether its a jeweler, musician or garden service.
Section 14 of the Prescription Act, No 56 of 1972 – A life line
It’s no joke, prescription is probably one of the most dreaded expressions in the legal profession, even more so when an attorney has to inform his client that his claim has prescribed. It’s probably the closest we can get to understanding how a medical doctor must feel when walking out into the hospital’s waiting room and having to tell hopeful family members that there was nothing more he could do for his patient.