Author: Mareli Treurnicht Any taxpayer who wishes to object to or appeal against an assessment issued by the South African Revenue Service (“SARS”) must be aware that their obligation to pay any tax under that assessment is not automatically suspended by virtue of the submission of the objection or appeal itself. Any taxpayer who
Author: Nyasha Musviba
The Tax Administration Act – Where’s The Redress For Taxpayers?
Author: Johan van der Walt (Cliffe Dekker Hofmeyr) The Tax Administration Act, No 28 of 2011 (TAA) took effect on 1 October 2012. At a recent TAA conference the first question asked was how taxpayers and advisers could get the South African Revenue Service (SARS) and officialdom to abide by timelines and to follow prescribed procedures. And what are the remedies should
Thin Capitalisation – SARS’ New Interpretation
Author: AJ Jansen van Nieuwenhuizen (Grant Thornton) Earlier this year, SARS released a draft Interpretation Note (IN) on how they would determine a taxpayer’s taxable income from certain international transactions. The draft IN provides taxpayers with guidance on how to apply the arm’s length principle when determining whether a taxpayer is thinly capitalised
Tax Controversy Some Controversial Issues
Author: Ernest Mazansky (Werksmans) Tax controversy has become a fairly common term to refer to what is, in reality, nothing more than a factual or legal dispute with the tax authorities and how these are to be handled in terms of the legal rules regarding taxation.
Recharacterisation of dividends as income
The 2013 draft Taxation Laws Amendment Bill has introduced significant changes insofar as the taxation of dividends are concerned, specifically dividends paidin respect of unvested shares held via employee share schemes. By way of background, the Income Tax Act, No 58 of 1962 (Act) currently contains certain anti-avoidance rules to prevent taxpayers from converting high-taxed salary into low taxed dividends.
Proposed new VAT rule for foreign e-commerce suppliers
The draft Taxation Laws Amendment Bill for 2013, released for public comment in early July 2013, has proposed an interesting new rule applicable to foreign suppliers of e-commerce products. Presently foreign suppliers of e-books, e-music, e-movies or e-software programmes that transact over the internet with their South African customers are not required to register as vendors for value-added tax (“Vat”) purposes. South African Vat legislation does not cater for place of supply rules in order to determine which jurisdiction has taxing rights in respect of supplies made by foreign suppliers to South African customers.
Binding private ruling on foreign asset-for-share transaction
On July 24 2013 the South African Revenue Service (SARS) released Binding Private Ruling 149, dealing with the disposal by a local company of foreign assets (shares) in exchange for shares in a foreign company. The applicant was a local company holding 100% of the issued shares in foreign Company A, which held the applicant’s various foreign investments.
Transferee liable for tax debts of taxpayer
If a person (the transferor) transfers an asset to another person (the transferee) for no consideration or for consideration which is below the market value of the asset, tax consequences arise, including the following: The transferor may become liable for donations tax. If the transferor and the transferee are connected persons in relation to each other, then for capital gains tax purposes, the transferor is deemed to have transferred the asset to the transferee for proceeds equal to the market value. The Tax Administration Act (28/2011), which took effect on October 1 2012, adds another item to that list. Under Section 182(1) of the act, if the transferee receives an asset from a taxpayer which is a connected person in relation to the transferee without consideration or for consideration which is below the fair market value of the asset,
Disposal of shares by a special purpose vehicle
Judgment was handed down in the case of A (Pty) Ltd v Commissioner for the South African Revenue Service (case number 13003, as yet unreported) on 13 June 2013. The case involved the timeworn question of whether the receipts or accruals in respect of the disposal of a particular asset constitute gross income, or whether it is excluded as being capital in nature.
Tax season starts on Monday 01 July 2013
Taxpayers earning less than R250 000 a year may not have to submit a tax return this year 1 July marks the beginning of Tax Season. As from this date taxpayers can submit their Income Tax Return (ITR12) to the South African Revenue Service (SARS). The good news this Tax Season is that the annual income threshold for submitting a tax return has been raised from R120 000 to R250 000.