The South African Revenue Service (SARS) published a Public Notice, Notice No. 140 in the Government Gazette (No 39650) on 3 February 2016, in terms of section 35(2) and 36(4) the Tax Administration Act, 2011 (TAA). Among other things, the notice lists an additional reportable arrangement that was not included in previous notices. The following arrangement is now a reportable arrangement: An arrangement for the rendering of consultancy, construction, engineering, installation, logistical, managerial, supervisory, technical or training services to a person that is a:
Author: Nyasha Musviba
All in one: another ruling regarding an amalgamation transaction
Author: Dries Hoek and Louis Botha (Cleffe Dekker Hofmeyr). In our Tax and Exchange Control Alert of 20 May 2016, we discussed Binding Private Ruling 231 (Overruled: SARS expresses an interesting view on be an amalgamation transaction), in which the South African Revenue Service (SARS) ruled on whether the roll-over relief provisions in s44 of the Income Tax Act, No 58 of 1962 (Act) could be applied. In this article, we discuss Binding Private Ruling 232 (Ruling),
SARS rules again on the capitalisation of loan accounts
Author: Ben Strauss (Director at Cliffe Dekker Hofmeyr). The South African Revenue Service (SARS) has now issued a number of rulings on the matter of the “conversion” of debt to equity. We have discussed previous rulings on this topic in our Tax Alerts of 15 January 2016 and 9 October 2015. On 31 May 2016 SARS issued Binding Private Ruling 236 (Ruling) which again deals with the issue.
Automatic Exchange of Information – FATCA, CRS, UK CDOT and other ominous acronyms
Author: Lisa Brunton (Senior Associate at Cleffe Dekker Hofmeyr). By now, we’re all familiar with the term, Automatic Exchange of Information (AEOI), otherwise referred to as ‘routine exchange’, but do we really appreciate what it means? From a South African fiscal perspective, AEOI involves the systematic and periodic transmission of taxpayer information by the source jurisdiction to the residence jurisdiction. This may also include instances where tax residence is based on differing criteria (eg domicile in the United Kingdom (UK); citizenship in the United States of America (USA)) or where an entity or person has tax obligations in several jurisdictions.
Overruled: SARS expresses an interesting view on an amalgamation transaction
The South African Revenue Service (SARS) has traditionally adopted a conservative approach in issuing rulings which approve a tenuous interpretation of provisions of the Income Tax Act, No 58 of 1962 (Act), in favour of the taxpayer. However, in Binding Private Ruling 231 (Ruling), which was issued by SARS on 10 May 2016, SARS adopted an interesting interpretation of the corporate roll-over relief provisions in s44 of the Act, which raises a number of questions. The Ruling is quite long and therefore we will only discuss the manner in which SARS applied the provisions of s44, relating to corporate roll-over relief in the case of so-called amalgamation transactions (s44 transaction).
Set-off of customs debt against amounts refundable
Author: Petr Erasmus (Director at Cleffe Dekker Hofmeyr). South African Revenue Service (SARS): Customs (Customs) sets off amounts owed to Customs against amounts refundable to clients. Section 76C of the Customs and Excise Act, No 91 of 1964 (Act) provides for set-off as follows: “Set-off of refund against amounts owing – Where any refund of duty is in terms of this Act due to any person who has failed to pay any amount of tax,
Criticism on SARS’s approach to the interpretation of legislation
Author: Mareli Treurnicht (Senior Associate at Cliffe Dekker Hofmeyr). On 29 April 2016 the High Court of South Africa (Gauteng Division, Pretoria) handed down judgment in an application brought by Julius Malema (Applicant) against the Commissioner for the South African Revenue Service (SARS). The matter concerned a compromise agreement concluded between them in terms of s205 of the Tax Administration Act, No 28 of 2011 (TAA).
An uncompromising stance – the dispute between SARS and Julius Malema continues
The High Court (Gauteng Division, Pretoria) recently handed down judgment in the case of Malema v Commissioner for the South African Revenue Service (76306/2015) [2016] ZAGPPHC 263 (29 April 2016). The issue before the court was whether the South African Revenue Service (SARS) was bound to a compromise agreement entered into between the Malema (Applicant) and SARS as a result of alleged non-disclosures and misstatements made by the Applicant, who expressly warranted the truth of the facts furnished by him. The compromise agreement was concluded in accordance with the provisions of s205 of the Tax Administration Act, No 28 of 2011 (TAA).
The evolution of the “foreign partnership” definition in South Africa
Author: Refilwe Mashale (Tax Consultant at ENSAfrica). In South Africa, the determination of whether a foreign entity is a company or partnership is an important one, as it subsequently determines the applicable tax treatment of the foreign entity. The issue of whether foreign entities should be recognised as foreign companies or foreign partnerships in South Africa was recently brought into the spotlight once again by the Taxation Laws Amendment Act No. 25 of 2015 (the “2015 Amendment Act”).
Extension of the period to submit an objection: what constitutes exceptional circumstances?
Author: Chris de Bruyn(Candidate attorney at ENSAfrica). In the matter of ABC (Pty) Ltd v Commissioner for the South African Revenue Service (ITC 0038/2015) (“ABC case”), the Tax Court had to consider whether the taxpayer discharged the onus to prove that “exceptional circumstances” existed for an extension of the period allowed for the taxpayer to object to an assessment, in terms of section 104 of the Tax Administration Act, 28 of 2011 (“TAA”).