By Yashika Govind, Senior Associate and Nirvasha Singh, Partner at Webber Wentzel. The obligation of SARS to collect tax and taxpayers’ rights are often at odds with each other. In an attempt to address this issue, the Budget 2018 (Budget) proposes to reconcile the taxpayers’ constitutional rights with SARS’ constitutional obligations by including a provision in the Tax Administration Act 28 of 2011 (TAA) stipulating that SARS must inform the taxpayer at commencement of the audit when the information submitted in a tax return will be audited. The provision is intended to cover desk audits which involve inspection or enquiries, without necessarily meeting with the taxpayer or third parties in person.
Author: Nyasha Musviba
SARS cuts the 2018 tax season by a month!
TAX SEASON 2018 FOR INDIVIDUALS This just in: SARS announced on their website that they have shortened the 2018 tax season for non-provisional tax payers (individual tax payers who earn a salary and who do not have additional income sources such as interest or rental income) by month to allow more time for finalising verifications and audits before year end. In the past, non-provisional tax payers, submitting their tax returns via efiling, had until the end of November to do so. This year, the tax season for non-provisional tax payers will close on the 31st of October 2018. The 2018 tax season for non-provisional tax payers will start on the 1st of July 2018 and end on the 31st of October 2018, for tax payers submitting their returns via e-filing. Tax payers who manually submit their tax returns will have until the 21st of September 2018 to do so. Provisional Read More …
Status of SARS interpretation notes
Ben Strauss (Director at Cliffe Dekker Hofmeyr). From time to time, the South African Revenue Service (SARS) issues interpretation notes. According to the SARS website (www.sars.gov.za), interpretation notes are intended to provide guidelines to stakeholders (both internal and external) on the interpretation and application of the provisions of the legislation administered by the Commissioner.
Procedure is everything: A win for the taxpayer and the importance of the right to just administrative action
Author: Louis Botha (Associate at Cliffe Dekker Hofmeyr). In recent times, taxpayers have often been unsuccessful in their disputes with the South African Revenue Service (SARS), especially where the dispute involved the interpretation or application of the substantive provisions of tax legislation. However, where disputes have involved compliance with the procedural requirements of tax legislation, taxpayers have generally had greater success. The judgment in Mr A v The Commissioner for the South African Revenue Service (Case No. IT13726) (as yet unreported), falls into the second category and is the subject of this article.
Demand loans, prescription and tax
Ben Strauss (Tax Director at Cliffe Dekker Hofmeyr). In South Africa, generally, debts prescribe within three years from the date on which they become due. If a person advances money or credit to another person without a fixed date for repayment, unless the parties agree otherwise, the debt becomes due on the date of the conclusion of the agreement. However, what is the position in the case of a so-called demand loan, that is, a loan agreement in terms of which the creditor has the power by making demand to unilaterally determine when the debtor must perform? That question was at issue in the Constitutional Court case of Trinity Asset Management (Pty) Ltd v Grindstone Investments 132 (Pty) Ltd 2018 (1) SA 94 (CC).
Employee share schemes: Tax deductibility of employer contributions
Ben Strauss (Director at Cliffe Dekker Hofmeyr). Many employee share incentive schemes work as follows: The employer company forms a scheme trust. The company pays a non-refundable cash contribution (or grant) to the trust (instead of, say, lending cash to the trust). The trust uses the cash to buy, or subscribe for, shares in the employer company or another related company. Eligible employees are given the opportunity to participate in the scheme by, say, acquiring units in the trust, subject to the employees continuing to comply with certain conditions over a number of years.
SARS speaks up: Some clarity provided on the taxation of cryptocurrencies in South Africa
Author: Candice Gibson (Senior Associate at Cliffe Dekker Hofmeyr). On 6 April 2018, the South African Revenue Service (SARS) announced that it will continue to apply normal income tax rules to cryptocurrencies and will expect affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income.
Raising jurisdictional issues
Authors: Heinrich Louw and Louise Kotze (Cliffe Dekker Hofmeyr). Where a taxpayer is dissatisfied with the decision taken by the South African Revenue Services (SARS) regarding an objection made by the taxpayer to an assessment, the taxpayer is entitled to appeal against such decision to the Tax Court. The Rules of the Tax Court, promulgated under s103 of the Tax Administration Act, No 28 of 2011 (TAA), prescribe the procedure to be followed when proceedings are instituted in the Tax Court.
Its complete: The Davis Tax Committee releases its final reports
The final reports can be downloaded below: 20180329 DTC Closing Report(2) 20180417 BD Article on DTC wealth tax report 20180412 DTC Note on Territorial Taxation 20180412 DTC Media Statement – 4 Reports, Closing 20180412 Article on residence and source taxation 20180411 Final DTC CIT Report – to Minister 20180329 Final DTC Wealth Tax Report – To Minister 20180329 Final DTC VAT Report to the Minister 20180329 Final DTC PBO Report to the Minister 20180329 DTC Closing Report(2)
Its complete: The Davis Tax Committee releases its final reports
Author: Louis Botha (Cliffe Dekker Hofmeyr). On 12 April 2018, the Davis Tax Committee (DTC), issued a media statement (Media Statement) in which it announced the publication of four additional final reports and the conclusion of its work based on its Terms of Reference (ToR).