The Organization for Economic Cooperation and Development (“OECD”) recently held its annual tax conference in Washington, DC focusing on the progress of implementation of its Action Plan on Base Erosion and Profit Shifting (the “BEPS Action Plan”).
Author: Nyasha Musviba
Supreme Court considers administrative fairness in tax disputes
On June 12 2014 an interesting judgment was handed down in the Supreme Court of Appeal (SCA) in Commissioner for the South African Revenue Service v Pretoria East Motors (Pty) Ltd (291/12) [2014] ZASCA 91. Facts The taxpayer operated a car dealership in Pretoria. The South African Revenue Service (SARS) conducted an audit of the taxpayer in respect of its 2000 to 2004 years of assessments, and raised various additional assessments in respect of income and value added tax (VAT), among other things. SARS also imposed punitive additional tax of 200%. The taxpayer objected to the additional assessments, but SARS disallowed the objection. The taxpayer appealed to the Tax Court.
SARS tax audits, the Tax Administration Act and making an effort to understand the taxpayer’s business operations
The recent decision of the Supreme Court of Appeal (“SCA”) in the matter of SARS v Pretoria East Motors (Pty) Ltd (291/12) [2014] ZASCA 91 is important insofar as it deals with SARS’s obligations when conducting a tax audit. (The SCA judgment by Ponnan JA was delivered on 12 June 2014).
New tax dispute resolution rules – the wait is finally over
Authors: Nicole Paulsen and Gigi Nyanin (DLACliffeDekkerHofmeyr) On 11 July 2014, the new dispute resolution rules (new Rules) under s103 of the Tax Administration Act, No 28 of 2011 (TAA) were promulgated in Government Notice 550, published in Government Gazette No 37819.
Tax penalty if you put too much in new savings accounts
Author: Laura du Preez You will be penalised if your contributions to government’s proposed tax-free savings accounts are higher than the annual or lifetime limits. National Treasury plans to introduce the products on March 1, 2015.
Value-Added Tax and the disposal of a partnership interest to the remaining partner
Author: Andrew Lewis (DLA Cliffe Dekker Hofmeyr) It appears that there is often uncertainty whether the transfer of an interest in a partnership from one partner to another (ie either a new or existing partner) should be subject to value-added tax (VAT).
Venture Capital regime needs overhaul
In the 2014 Budget Speech, the Minister of Finance noted the importance of small business and entrepreneurship in facilitating the creation of jobs in the private sector. In this regard, specific mention was made of proposed amendments to the venture capital company (“VCC”) tax regime in order to enhance support for entrepreneurial development.
Confusion over pension fund contributions
Author: Evan Pinkworth (BDLive) Most companies are in the dark on how to amend payrolls to accommodate the retirement fund and tax reforms coming in March next year, according to experts at a “Do or Die” pensions conference on Friday. The risk is that the new system may reduce take-home pay, and add fuel to existing threats from unions to go on strike over proposed pension changes.From March 1 next year, employer contributions to retirement funds will be included in employees’ salary packages and taxed as a fringe benefit.
Companies feel the pinch from changes to tax act
Author: Amanda Visser (BDLive) Some local companies are starting to feel the pinch following changes to the Income Tax Act which reclassify debt to equity when certain characteristics are present. Tax experts said last week the changes caught companies — whose loans from their multinational holding companies were subordinated in favour of creditors when they
Aviation industry may face carbon taxes in South Africa in 2015
Author: Fabio Miceli (NortonRoseFulbright) If recent events between the European Union and the airlines of China, the USA and Russia are any guide, South Africa would do well to consider very carefully the impact of the carbon tax on the airline industry. The updated carbon tax policy paper, published in March 2013, is informed by the following framework: a rate of R120 per ton of CO2 equivalent, increasing at 10% per year for the first five years. The objective is that a portion of the revenues generated through the carbon tax will be directed towards funding the energy efficiency savings incentive.