By Douglas Gaul, Tax Manager Grant Thornton Johannesburg Prior to 1 March 2014, dividends received from equity shares that were acquired by an employee as part of a share incentive scheme, were exempt from income tax (with some exceptions), even if these shares were held by a share trust on behalf of the employees. This situation has changed, and share incentive schemes must be reviewed to determine whether they still achieve the outcomes they were originally setup to deliver.
Author: Nyasha Musviba
Loans disguised under share schemes are no more it is time to restructure
By Hawa Bibi Hoosen, Senior Tax Consultant, Grant Thornton Durban The revised section 8E and newly introduced section 8EA of the South African Income Tax Act (the Act) deems certain dividends and foreign dividends received in cash by any person on or after 1 January 2013, to be income, taxed in the hands of the shareholder. This has resulted in significant changes in the tax planning of companies and individuals alike.
A horse that looks like a cow is still a horse Hybrid debt instrument taxed as dividends
By Donatella Callaway The new anti-avoidance rules in respect of hybrid debt instruments, which were introduced by the Taxation Laws Amendment Act 2013 (TLA), became effective on 1 April 2014. The provisions were introduced to reduce the opportunity to create equity instruments that are artificially disguised as debt instruments.
Tax and retirement
By Bruce Cameron Government uses the tax system to encourage you to save for retirement and to discourage you from cashing in your savings before you retire, Jenny Gordon, Alexander Forbess head of retail legal advice, says. This is the second article in a series of reports on the Personal Finance/Alexander Forbes Ready Set Retire conferences that were held around South Africa in March. You must take tax into consideration when you plan for retirement, but tax should not be the overriding consideration, Jenny Gordon says.
Know the rules when hiring a tax practitioner
You are ultimately responsible for filing your income tax return, even if a tax practitioner submits the return on your behalf. And if the South African Revenue Service (SARS) levies a penalty and interest for the late or non-submission of your return, you not the practitioner are liable to pay it. However, Professor Sharon Smulders, the head of tax policy technical and research at the South African Institute of Tax Practitioners (Sait), says that if your return was filed late because of a failure on the part of a practitioner or accountant, such as neglecting to remind you to submit your paperwork in time, this constitutes unprofessional conduct and is a breach of the code of conduct prescribed by most professional bodies to which tax practitioners must belong.
Sars accepts Malema tax commitment
Economic Freedom Fighters leader Julius Malemas acknowledgement that he failed to comply with past tax obligations was welcomed by the SA Revenue Service (Sars) on Monday. The sentiments and apology expressed in the public statement released by Mr Malema are also welcomed, spokesman Adrian Lackay said in a statement.
Full statement Julius Malema on Sars deal
I can confirm that I was informed by SARS today that it has accepted an offer of compromise I submitted in respect of my outstanding tax. This followed my making such an offer to SARS as provided for in the Tax Administration Act. I was informed that a governance committee considered my submission and found it to have complied with the requirements for such an offer.
Remedy for declined tax clearance certificate
On 18 February 2014 the North Gauteng High Court delivered a judgment on the remedies available when a tax clearance certificate (TCC’) is declined by SARS. What is clear from the judgment is that when a taxpayer is dependent on a TCC for financial or business purposes and it gets declined by SARS, the potential impending economic harm that may come to a taxpayer from such refusal does not entitle the taxpayer to a court order compelling SARS to issue such a TCC sought.
Discussion paper on the assumption of contingent liabilities in a going concern acquisition
SARS released the above discussion paper in December 2013 and it was open for comment to 31 March 2014. It deals with the treatment of so-called free-standing’ contingent liabilities from the points of view of the seller as well as the purchaser, where the contingent liabilities are assumed by the purchaser as part settlement of the purchase price for the acquisition of the assets of a going concern.
Nowhere to hide – Convention is to increase the co-operation amongst tax authorities around the world
By Dr Beric Croome of ENSafrica On 21 February 2014 the Convention on Mutual Administrative Assistance in Tax Matters, (the Convention) as amended, by the provisions of the Protocol amending the Convention on Mutual Administrative Assistance in Tax Matters which entered into force on 1 June 2011 was published in the Government Gazette.