SARS issued the Binding Private Ruling 190 on 5 March 2015, which deals with the issue and repurchase of ordinary shares. The ruling deals with a proposed arrangement and the contractual rights and restrictions established separately from any class provisions applicable to those shares in terms of the Applicant Company’s memorandum of incorporation. The parties to the ruling include the Applicant, which is a company incorporated in and a resident of South Africa; and the Co-Applicant which is a company incorporated in and a resident of South Africa.
Author: Nyasha Musviba
SARS’ new list of ‘Reportable Arrangements’
SARS’ list of reportable arrangements, as envisaged by section 35 of the Tax Administration Act, 2011 (TAA), has been widened extensively. The arrangements, deemed reportable, were published on 16 March 2015 in a public notice (‘the Notice’) in the Government Gazette. Reportable arrangements must be reported to SARS within 45 business days after becoming a participant in a reportable arrangement or 45 business days after the date on which an arrangement qualifies as a reportable arrangement. Every participant has the duty to disclose the prescribed information regarding the arrangement to SARS unless the participant obtains a written statement from another participant that the other participant has disclosed the arrangement.
SARS' new list of ‘Reportable Arrangements'
SARS’ list of reportable arrangements, as envisaged by section 35 of the Tax Administration Act, 2011 (TAA), has been widened extensively. The arrangements, deemed reportable, were published on 16 March 2015 in a public notice (‘the Notice’) in the Government Gazette. Reportable arrangements must be reported to SARS within 45 business days after becoming a participant in a reportable arrangement or 45 business days after the date on which an arrangement qualifies as a reportable arrangement. Every participant has the duty to disclose the prescribed information regarding the arrangement to SARS unless the participant obtains a written statement from another participant that the other participant has disclosed the arrangement.
Corruption trial of former SARS official delayed
Author: Natasha Marrian (BDlive) The fraud and corruption case against former South African Revenue Service (SARS) official Mandisa Mokwena has again been shifted, this time to October 5. The case dates back to 2011. Ms Mokwena’s attorney, Johann Schafer, said on Monday that the National Prosecuting Authority (NPA) had asked for more time to decide whether to proceed with a corruption case against her. This was after she had made representations to the national director of public prosecutions on why the charges should be dropped.
High Court overrules tax court on input VAT claim on sponsorships
Author: Prof Peter Surtees (Norton Rose Fulbright South Africa) If a taxpayer receives money, goods and services from sponsors in return for providing branding and marketing services to the sponsors, output VAT is payable on the value of these receipts. And if the sponsors decline to furnish tax invoices for the money, goods and services they receive from the taxpayer in return, may the taxpayer infer an input claim from available evidence? The tax court ruled that, when output VAT was due on the value of the receipts; the taxpayer could claim no input credits in the absence of tax invoices. On 6 February 2015 in ABC (Pty) Ltd v CSARS Case No A 129/2014 the High Court of the Western Cape overruled the tax court’s decision.
Income protection tax change likely to affect your salary, benefits
Author: Laura du Preez (Personal Finance) Life assurance companies have responded differently to the change in how income protection policies are taxed, which took effect at the beginning of this month, and you should know how this could affect your finances. Income protection policies provide you with a monthly income if you become disabled.
Make the most of tax-free savings
Author: Lisa Steyn (Mail and Guardian) Finance houses have moved quickly to offer tax-free products made possible by the minister. Financial institutions have scrambled to provide the most attractive tax-free savings, ranging from simple bank deposits to investments exposed to the stock markets. At the beginning of this month, the government introduced tax-free investment regulations in a bid to boost household savings. Regardless of what form the tax-exempt investment takes, the regulations allow for contributions of up to R30 000 a year (an average of R2 500 a month) and no more than R500 000 over a lifetime.
Provisional tax penalties made simpler – and harsher
Author: Mark Bechard Some of the penalties imposed on provisional taxpayers who fail to meet their obligations have recently been simplified, but others have been made more onerous. The changes to the penalties were made in amendments to the Income Tax Act and the Tax Administration Act.
10 Questions to ask when setting your own salary
Author: Lisa Girard (Entrepreneur Magazine) Many people become entrepreneurs because they don’t feel they’re getting paid enough for the work they do in the corporate world. Ironically, they may find themselves even lower on the salary scale when they open their own business.
SARS clamps down on share buy backs followed by the issue of shares
In practice taxpayers often enter into arrangements in terms of which a company buys back its own shares held by certain shareholders, and immediately thereafter issues new shares to new shareholders. This practice has long caused tax avoidance concerns for the South African Revenue Service (SARS), as it could circumvent the payment of capital gains tax (CGT) by the shareholder whose shares are bought back.