Although a tenant’s insolvency does not automatically terminate the lease or confer a right upon a landlord to cancel the lease, a landlord is not left without any remedies where a tenant is in breach of the lease before the tenant is wound-up. A recent judgment of the Supreme Court of Appeal (SCA) in Ellerine Brothers (Pty) Limited (Ellerine) v McCarthy Limited, clarified the legal position.
Author: Nyasha Musviba
Search and seizure: the extent of SARS's powers
In order to give effect to the information gathering powers of the South African Revenue Service (SARS), SARS may apply to a magistrate or a judge to issue a search and seizure warrant so as to, unannounced, enter premises where relevant material is being kept, conduct a search of a person’s premises and seize relevant material. Section 59 of the Tax Administration Act, No 28 of 2011 (TAA) provides that in obtaining the search and seizure warrant, SARS must make an ex parte application to a judge, which application must be supported by information supplied under oath or solemn declaration, establishing the facts upon which the application is based.
Expenditure relating to deferred accruals
Background The taxpayer operated a mine. Firstly, it would extract mineral ore from the earth, and secondly, by smelting and other processes, it would extract a concentrate (containing the minerals) from the ore. The taxpayer sold the concentrate to a subsidiary company. In terms of the agreement with the subsidiary, and in respect of the sale of concentrate in any particular month, the purchase price would only be finally determined five months later. Section 24M of the Income Tax Act, No 58 of 1962 (Act) allows a taxpayer to include in its gross income an amount accruing to it in a particular tax year only in the tax year that the amount is finally determined.
Clamour to end transfer pricing abuse
Author: Linda Ensor (BDlive) Pressure is mounting both within and outside Parliament for the government to introduce dedicated legislation to ban transfer pricing when it is used as a tax-avoidance measure to shift profit offshore. South Africa is estimated to lose tens of billions of rand annually from the abuse of transfer pricing by multinational groups, but South African Revenue Service (SARS) large business centre group executive Sunita Manik said on Wednesday that transfer pricing itself was accepted practice globally and could not be banned.
Binding Private Ruling 166 – A change of domicile by a controlled foreign company
Author: BDO South Africa Binding Private Ruling 166, issued by SARS on 1 April 2014, involved an issue of concern to many holding companies in South Africa that have non-resident subsidiaries which hold their off-shore investments. The issue is whether a South African holding company will be deemed, for the purposes of para 11 of the Eighth Schedule to the Income Tax Act 58 of 1962, to have incurred a ‘disposal’ of assets if its controlled foreign subsidiary changes its domicile, even where its place of effective management remains outside South Africa.
The Cape Tax Court interprets the statutory criteria for approval by SARS as a tax-exempt PBO
Author: BDO South Africa The decision of the Cape Town Tax Court in ITC 1872 (2014) 76 SATC 225 brings long-awaited clarity to the interpretation of the statutory criteria that a public benefit organisation (PBO) needs to satisfy in order to qualify for tax exemption in terms of s 10(1)(cN) of the Income Tax Act 58 of 1962, read with the provisions of the Ninth Schedule to the Act.
Tax consequences arising from the writing off of loans
Author: Peter Dachs of ENSafricaWe are often spoken of as an economy with high levels of debt. Even when interest rates are high, we have never been scared of gearing ourselves so that we can buy that expensive car or holiday house in Hermanus. Companies too often have high levels of debt.
SARS appoints an external Committee of Investigation on complaints against its CEO
PRETORIA, 3 September 2014 – The South African Revenue Service (SARS) is a crucial fiscal institution in a democratic South Africa. It is an institution whose very foundations are built on the trust and the credibility that South African taxpayers confer on it.
Employer interim reconcilation open between 1 September and 31 October 2014
The employer interim reconciliation for the transaction period 1 March to 31 August 2014 is open between 1 September and 31 October 2014. During this period you should submit your interim reconciliation declaration to SARS.
Electronic communication with SARS
The South African Revenue Service (SARS) recently released the new rules for dispute resolution prescribed under section 103 of the Tax Administration Act No 28 of 2011 (TAA). Among the many new features, it is interesting to note the provisions relating to the delivery of documents by a taxpayer to SARS, and specifically with reference to the delivery of documents by electronic means.