By Webber Wentzel No surprises in the “first batch” 2014 draft Taxation Laws Amendment Bill What National Treasury have dubbed the “first batch” of the draft Taxation Laws Amendment Bill (TLAB) proposes two main sets of amendments, namely changes to the tax treatment of the risk businesses of long-term insurers, and clarification of the fringe benefit valuation rules with regards to defined benefit funds in terms of the suite of reforms to retirement savings coming into effect on 1 March 2015.
Category: Budget 2014/15
Public benefit organisations – lowering the distribution requirement
Author: Nicole Paulsen and Gigi Nyanin (DLACliffeDekkerHofmeyr) On 17 July 2014 the National Treasury (Treasury) released the draft Taxation Laws Amendment Bill (TLAB) which aims to give effect to the various tax proposals announced in the 2014 Budget. One of the proposals relates to the control measures, and more specifically the distribution requirement, prescribed for a defined conduit public benefit organisation (PBO).
Recent exchange control developments in relation to "domestic treasury management companies"
During 2013, a treasury management company regime was introduced for exchange control purposes to encourage the establishment of group treasury management functions in South Africa and to further enhance South Africa’s position as a “gateway into Africa”.
National Treasury Released Draft Bills for Public Comment
National Treasury published the 2014 Rates and Monetary Amounts and Amendment of Revenue Laws Bill (‘Rates Bill’), the First Batch of the 2014 draft Taxation Laws Amendment Bill and Regulations (‘TLAB’) for public comment. This was announced via a media statement from National Treasury on 10 June 2014.
Secondary Adjustment for Thin Capitalisation Purposes
The 2014 Budget review proposes that the ‘deemed loan’ secondary adjustment contained in section 31(3) of the Income Tax Act be scrapped. It was proposed that an alternative treatment be followed where the secondary adjustment will be deemed a dividend or ‘capital contribution’ which in turn would be subject to dividends tax. This seems to be closer to the STC regime of the old transfer pricing legislation prior to the change with effect of years of assessment commencing on or after 1 April 2012.
An update on the streamlining of the VAT registration process
The Taxation Laws Amendment Act, No. 31 of 2013 (TLAA) introduced legislative amendments aimed at streamlining the Value-Added Tax (VAT) registration process as contained in the Value-Added Tax Act, No. 89 of 1991 (VAT Act). In the 2013 Budget, the Minister of Finance, Pravin Gordhan (Minister) indicated that there would be efforts to reorganise the VAT registration process to ease the burden of complying with the requirements for registration. This culminated in amendments being made to s23(3)(b)(ii) and s23(3)(d) of the VAT Act, respectively.
Venture capital companies: part 1 – overview
Author: Mansoor Parker of ENSafrica Introduction This is the first in a series of articles on venture capital companies, a tax-favoured investment vehicle regulated by section 12J of the Income Tax Act, 1962 (“ITA 1962”). The venture capital company (“VCC”) scheme, introduced in 2009, is a tax-based scheme designed to encourage individual and corporate investors to invest in a range of smaller, higher-risk trading companies by investing through the VCCs.
Tax collection remains buoyant
Finance Minister Pravin Gordhan says tax revenue remains “buoyant” despite a global economic turmoil that has tested South Africa’s finances. Announcing the preliminary outcomes of revenue collection for the 2013/14 fiscal year, Gordhan said the overall revenue collected by SA Revenue Service as of midnight on Monday March 31, was R899.7bn. This is R0.7bn more than the revised estimate in the 2014 Budget.
Budget 2014 – Budget's impact on personal finance
Johannesburg – The 2014 National Bugdet will have an impact on consumers’ tax and retirement and Michelle Dubois, legal marketing specialist at Liberty explains its impacts on personal financial planning for the short and long term future. Will I save tax this year? There was the usual inflationary adjustment to the tax tables to reduce the effect of the so called “bracket creep”. It effectively means that an inflationary linked salary increase will not push your income into the next tax bracket, which would increase your tax payable. The tax relief will be seen in your end of March payslip, and whilst it may not be a lot of money, this is money that you never had before so make sure that it is put to good use.
Budget 2014 – 'Deemed loan' secondary transfer pricing adjustment to be scrapped
By David Warneke, BDO South Africa One of the tax proposals contained in the 2014 Budget review is the scrapping of the ‘deemed loan’ secondary transfer pricing adjustment contained in section 31(3) of the Income Tax Act, in favour of such an adjustment being treated as a dividend subject to the dividends tax or a ‘capital contribution depending on the facts and circumstances’. The scrapping of the deemed loan treatment is generally to be welcomed although scant detail regarding the proposal was provided in the Budget Review.