Background ITC 13003 [2013] involved the disposal of shares by a taxpayer and whether the proceeds realised constituted gross income and were of a revenue nature. The taxpayer happened to be a Special Purpose Vehicle and it was argued that the proceeds of the sale of shares were of a capital nature. There were also additional costs incurred which were closely associated with the acquisition of the shares in question. These costs incurred were the so-called ’equity-kicker’ and ‘indemnity costs’.
Author: Nyasha Musviba
Employee Tax – ligation cannot be contractually varied
The decision of the Johannesburg Labour Court in Naidoo v The Careways Group (Pty) Ltd [2013] ZALCJHB 96, in which judgment was handed down on 29 May 2013, affirms a clear principle – the obligation of an employer to deduct employees’ tax in respect of remuneration cannot be varied by an agreement between these two parties. The rationale is beyond doubt – the obligation to deduct tax is laid down in the Income Tax Act (the Act) and overrides any contract to the contrary.
Receipt of foreign assets and the subsequent donation thereof to a non-resident trust
Binding Private Ruling 157 dealt with the income tax consequences arising from, and the attribution rules applicable to a distribution of foreign assets made by non-resident discretionary trusts to a beneficiary who is a resident of South Africa, and the subsequent donation by the beneficiary of such assets to another non-resident trust.
The remittance of administrative non-compliance penalties
Charl Hall, Tax Compliance Officer, Mazars In terms of the Tax Administration Act (TAA)Since the enactment of the Tax Administration Act (TAA) the South African Revenue Services (Sars) has tightened the screws to encourage taxpayer compliance. A number of new penalties are being introduced to ensure taxpayers are compliant and their tax affairs are in order. For taxpayers who have been charged with administrative non-compliance penalties, there is a light at the end of the tunnel as set out in Section 216 – 218 of the TAA. In this regard, there are three remittance scenarios that can apply to a taxpayer.
The Decision in KwaZulu-Natal High Court in Kadodia v CSARS
The judgment of the KwaZulu-Natal High Court in the case of Kadodia v CSARS, which was delivered on 5 April 2013. The facts were that the taxpayer, Kadodia, a businessman engaged in the importation of tobacco products and cigarettes into South Africa, was informed by SARS that there had been an underpayment of value-added tax and customs duty amounting to some R171 000. Through his attorney, Kadodia admitted that he had contravened the Customs and Excise Act and proposed that the goods in question either be sold to offset the amounts claimed or be released to him for sale in order to raise the necessary proceeds to pay the tax debt to SARS.
Residency Status Of a Non-Resident Who Applies For a Temporary Residence Permit
Author: PwC Now that South Africa has a residence-based system of income tax, a decision by a non-resident to become tax-resident in South Africa has the result that his world-wide income will become subject to tax in South Africa, save to the extent that relief is given by a double-tax agreement or that unilateral relief is available in terms of section 6 quat of the Income Tax Act 58 of 1962. It is therefore not a decision to be taken lightly.
New Tax Clearance Certificate (Tcc) Application Process
Author: SARS Legal and Policy SARS have introduced an enhanced Tax Clearance Certificate application process on eFiling and in branches. This is the first step in the phased implementation of a modernised tax compliance process to be introduced in the first quarter of 2014.
Transfer Pricing and Thin Capitalisation: A Documentation Nightmare
Section 31 of the Act, dealing with transfer pricing, was substituted with effect for years of assessment commencing on or after 1 April 2012. The substituted provision is different to its predecessor in a number of important respects.
Receipt of Foreign Assets and the Subsequent Donation Thereof to a Non-resident Trust
Author: BDO Binding Private Ruling 157 dealt with the income tax consequences arising from, and the attribution rules applicable to a distribution of foreign assets made by non-resident discretionary trusts to a beneficiary who is a resident of South Africa, and the subsequent donation by the beneficiary of such assets to another non-resident trust.
VAT Rules in SA to be Updated for Internet Age
Author: Ruan Jooste (BDlive) Proposals to amend value-added tax (VAT) legislation to include electronic services and products supplied by international firms to South African consumers are under way. VAT laws in South Africa are not written to cater for digital transactions, such as online downloads of movies, music, games or access to content in the cloud (an internet-based storage mechanism).