Tax on severance is an important aspect of the law for employers and employees to understand. The Basic Conditions of Employment Act, No. 75 of 1997 (BCEA) provides that an employer who dismisses an employee for ‘operational requirements’ must pay severance of one week’s remuneration for every completed year of service. However, this does not prohibit an employer from providing more than the statutory minimum in terms of a contract of employment, company policy, collective agreement or an agreement reached in terms of s189 of the Labour Relations Act, No. 66 of 1995 (LRA).
Author: Nyasha Musviba
United States and South Africa Sign an Intergovernmental Agreement to Share Tax Information
Pretoria, June 9, 2014 – South African Minister of Finance, Mr Nhlanhla Nene and U.S. Ambassador to South Africa Mr Patrick H. Gaspard, today signed an intergovernmental agreement to improve international tax compliance and to implement the Foreign Account Tax Compliance Act. This agreement promotes transparency between the two nations on tax matters and furthermore underscores growing international cooperation in the endeavor to end tax evasion worldwide.
New regulations for the zero rating of indirect exports
Author: Carmen Moss-Holdstock (CliffeDekkerHofmeyr) Background The Value-Added Tax (VAT) rules relating to the exportation of goods are rather complex and intricate. Many vendors do not always appreciate the issues that arise in circumstances where goods are exported, either by the vendor or the purchaser of the goods.
Taxation of hedge funds
Author: Heinrich Louw (CliffeDekkerHofmeyr) Following the release on 12 September 2012 of a proposed framework for the regulation of hedge funds, the National Treasury and the Financial Services Board released draft regulations (Draft Regulations), together with an explanatory memorandum (Memorandum), on 16 April 2014.
Raise tobacco tax to save lives
Author: Wilma Stassen (All Africa) As the globe marks world no-tobacco Day today, experts say it is time for South Africa to hike up tobacco taxes to save lives. “Higher taxes both increase government revenues and reduce consumption, making it the most cost-effective tobacco control measure available to governments,” says Dr Yussuf Saloojee from the National Council Against Smoking (NCAS). “Despite this, tobacco tax is comparatively low in South Africa.”
UK Court decision on corporate tax residency
Author: Justin Liebenberg (CliffeDekkerHofmeyr) A company incorporated outside South Africa can be tax resident here if its place of effective management (POEM) is located in South Africa. POEM is also often used as the tie-breaker to finally determine corporate tax residency under double tax agreements. A recent court decision in the UK sheds further light on POEM especially in the context of a double tax agreement.
BINDING PRIVATE RULING – DEFINITION OF UNRESTRICTED EQUITY INSTRUMENT
BINDING PRIVATE RULING: BPR 170 DATE: 30 May 2014 ACT : INCOME TAX ACT NO. 58 OF 1962 (the Act) SECTION : SECTION 8C(7) SUBJECT : DEFINITION OF UNRESTRICTED EQUITY INSTRUMENT
An update on the streamlining of the VAT registration process
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.
Demystifying adequate delivery of a section 129 notice
A few weeks ago the Constitutional Court (CC) handed down judgment in the case of Kubyana v Standard Bank of South Africa Ltd (CCT 65/13) (Kubyana) regarding the interpretation of s129(1) of the National Credit Act, No 34 of 2005 (Act). S129 of the Act deals with the required procedures to be followed by a credit provider before debt enforcement can take place. This section provides that if a consumer is in default under a credit agreement the credit provider:
When is a company an operating company for tax purposes?
This is an important question in the context of preference share funding in renewable energy transactions, particularly in determining whether the funding is for a qualifying purpose and therefore exempt from the clutches of s8E and 8EA of the Income Tax Act, No 58 of 1962 (Income Tax Act).