Educational institutions making exempt supplies will likely be negatively impacted with the impending introduction of VAT on e-commerce transactions in South Africa with effect from 1 April 2014. One could even go as far to say that educational institutions had it good under the reverse charge mechanism (also referred to as VAT on ‘imported services’) as there was arguably no VAT leakage when dealing with foreign suppliers of certain e-c ommerce services.
Author: Nyasha Musviba
Binding class ruling on dividends distributed by a foreign company
On July 24 2013 The South African Revenue Service (SARS) issued Binding Class Ruling 41 regarding the question of whether a dividend distributed by a foreign company constitutes a ‘foreign dividend’ as defined in Section 1 of the Income Tax Act (58/1962). The applicant was a foreign corporate partnership limited by shares. Its structure was essentially a hybrid between a partnership and a limited liability company, which is
Taxation of Foreign Dividends
Author: Tarryn Spearman(Grant Thornton) Significant changes were introduced to the way foreign dividends, received by South African residents, are treated for tax purposes. The purpose of these changes is to eliminate the disparity between the tax treatment of domestic and foreign dividends.
Sars Launches Scam Alert
Author: Fin24.com The tax season opened officially on July 1 and many law-abiding taxpayers are getting ready to do their bit. Unfortunately, so too are the shady individuals and gangs who operate phishing scams.
Carrying on Business Through an Agent – Adding to The Confusion
A recent decision in the Tax Court in the Western Cape (Case No. 13002) related to the question whether a company was carrying on farming.The company (Company A) had acquired a piece of land on which there were substantial plantations.
VAT Invoice: The Importance Of A Compliant Tax Invoice
Author: Nicole Paulsen (CliffeDekkerHofmeyr) South Africa operates a value-added tax (VAT) system whereby the VAT charged by suppliers is subtracted from the VAT charged to customers to calculate the VAT payable or refundable. This system was established to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities.
New Binding Private Ruling: Transfer Of Debtors Book
Author: Heinrich Louw (CliffeDekkerHofmeyr) The South African Revenue Service (SARS) released Binding Private Ruling 154 (ruling) on 3 September 2013. The ruling deals with the transfer of a debtors book as part of a transaction in terms of s45 of the Income Tax Act, No 58 of 1962 (Act) and to what extent a transferee may claim allowances for doubtful debts in terms of s11(j) of the Act.
Direct payments from eFiling axed
Ingé Lamprecht 08 September 2013 New secure payment process introduces difficulties. JOHANNESBURG – The option to make a direct payment to the South African Revenue Service (Sars) through its eFiling, website without additional authorisation, will soon be withdrawn.
Cyprus: A Further Step Towards Ratification Of The Cyprus – Spain Double Taxation Agreement
Authors: Andreas Neocleous & Co LLC The double taxation agreement between Cyprus and Spain, which was signed in Nicosia on 14 February 2013, has taken another step towards ratification. On 2 August the Spanish cabinet approved the agreement and forwarded it the Spanish parliament for consideration. The new agreement follows the OECD Model Convention
SA’s Double Tax Agreement with Mauritius Amended
SA’s Double Tax Agreement with Mauritius Amended Author: Bernard du Plessis (ENS) The double tax agreement between Mauritius and South Africa, which came into force in 1997 has been renegotiated. There are three main amendments to the 1997 double tax agreement: the resident article has been amended, the allocation of taxing rights in relation to immovable property assets has been renegotiated, and the interest article has been amended.