Author: Jaco Leuvennink (Fin24). Cape Town – Building on the sense of a new beginning created by President Cyril Ramaphosa’s State of the Nation Address on Friday, Finance Minister Malusi Gigaba’s Budget Speech in the National Assembly on Wednesday afternoon was all about rebuilding and restoration in challenging times. This is a tough but hopeful budget,” he said at the start of his speech. This is probably a fair comment, seeing that the risks and pressures were also acknowledged.
Author: Nyasha Musviba
2018 Budget Speech Highlights and 2018/2019 PKF Tax Guide
Finance Minister Malusi Gigaba delivered his maiden 2018 budget speech on 21 February 2018. The highlights of the tax related budget proposals announced by the Minister are as follows: As from 1 April 2018, the VAT rate increases from 14% to 15%. As from 1 March 2018, the Donations Tax rate increases from 20% to 25% in respect of donations in excess of R30 million. As from 1 March 2018, the Estate Duty rate increases from 20% to 25% in respect of the value of dutiable estate in excess of R30 million.
CDH Special Edition Budget 2018 Alert
CDH Special Edition Budget 2018 Alert Cliffe Dekker Hofmeyr Tax-and-Exchange-Control-Alert-Budget-Speech-2018-21-February-2018
VAT Changes from the Budget Speech 2018
Authors: Seelan Muthayan and Ayanda Masina (BDO South Africa). Increase in the VAT rate The Minister of Finance in the budget speech announced an increase in the VAT rate to 15%. The much anticipated increase is the first increase in the VAT rate since 1993. The VAT rate will increase with effect 1 April 2018. The provisions of the VAT Act relating to the application of an increase in the tax rate will apply to transactions where the applicable tax rates overlap. To counter the effect of the increase in the VAT rate, relief will be granted in the form of the current zero rating of basic foodstuff and an above average increase in social grants. Electronic Services Amendment of the Regulations In 2014, National Treasury brought electronic services provided by foreign businesses/ non-residents to South African residents into the South African VAT net. This new activity/type of supply was Read More …
BDO Expert Analysis of South African Budget 2018
Our Expert Analysis of Budget 2018 Our Tax and Financial Planning experts provide their insights into the 2018 Budget Speech. bdo-pocket-guide-2018
Budget 2018 No real Surprises!
Ferdie Schneider, National Tax Head and Tax partner at BDO South Africa. Yesterday, Minister Gigaba delivered his first budget speech for the 2018/19 fiscal year. The budget follows the December 2017 election of Cyril Ramaphosa as ANC president, and more recently his election as the fourth President of the democratic South Africa. This budget is believed by many to be one of the most important budgets in many years as it follows the end of the Zuma era, which was characterised by an underperforming economy, fraud, corruption, and political instability.
Major new tax burden introduced
Author: David Warneke (Partner and head of Tax Technical at BDO South Africa). The Taxation Laws Amendment Act of 2017 (Act 17 of 2017) which was promulgated on 18 December 2017 contains provisions, namely section 22B of the principal Income Tax Act and paragraph 43A of the Eighth Schedule to the Income Tax Act, that will result in a significant compliance burden for companies, even in cases in which they do not result in additional taxation. The provisions deal with disposals of shares in a company (say A) that are held by another company (say B) in circumstances in which B held a significant portion of the equity shares (which the Amendment Act defines as a qualifying interest) in A at any time within the 18 months preceding the disposal. Section 22B applies in situations in which the shares that are the subject of the provision are held as trading Read More …
Did the punishment fit the crime? The Tax Court reduces an understatement penalty imposed by SARS
Author: Louis Botha (Associate at Cliffe Dekker Hofmeyr). The imposition of understatement penalties in terms of Chapter 16 of the Tax Administration Act, No 28 of 2011 (TA Act) and the factors to consider when imposing such a penalty: An issue that our courts have not dealt with much. In this regard, the judgment of the Tax Court in XYZ CC v The Commissioner for the South African Revenue Service (Case No. 14055) (as yet unreported), handed down on 20 November 2017, sets out some helpful principles.
Consecutive asset-for-share transactions
Author: Ben Strauss (Director at Cliffe Dekker Hofmeyr). Section 42 of the Income Tax Act, No 58 of 1962 (Act) allows taxpayers to transfer assets to a company free of immediate tax consequences, provided certain requirements are met; there is a roll-over for tax purposes. However, certain anti-avoidance provisions may be triggered if the company that acquired the assets, disposes of the assets within 18 months of acquisition.
Residential property developers face cash flow crunch due to VAT on temporary letting of units
Author: Gerhard Badenhorst (Director at Cliffe Dekker Hofmeyr). Many residential property developers will kick off 2018 with a major cash flow challenge as a result of a substantial value added tax (VAT) liability which they may face in respect of the temporary letting of residential units which have been developed for resale.