SA Budget 2023 – Does your controlled foreign company have real substance?

An offshore company which meets the definition of a controlled foreign company (CFC) will have substance if it has a foreign business establishment (FBE) as contemplated. Usually, if the income of your CFC is attributable to an FBE, such income will not be taxed in the South African shareholders hands. Conversely if there is no FBE such income may be taxed in the SA shareholders hands. Earlier this month the Supreme Court of Appeal delivered its judgement in CSARS v Coronation Investment Management on whether the CFC in question had an FBE. The court ruled in favour of SARS.

SA Budget 2023 – Proposed Changes to the Tax Treatment of Non-Resident Beneficiaries of Trusts

The income tax provisions governing the tax treatment of amounts vested in beneficiaries of trusts are contained in section 25B of the Income Tax Act and paragraph 80 of the Eighth Schedule to that Act. Section 25B deals with amounts which are not of a capital nature, such as interest income or rental income, whereas paragraph 80 deals with vested capital gains. Currently capital gains vested in non-resident beneficiaries remain subject to capital gains tax in the trust. The implication is that capital gains vested in non-resident beneficiaries face a higher flat tax rate of 36%, compared to capital gains vested in resident beneficiaries which incur a maximum effective tax rate of 18%.

SA Budget 2023 – Home Office Expenses

On 22 February 2023, the Minister of Finance announced in his Budget Speech for 2023, that National Treasury and SARS will be committed to a multi-year review of allowances which shall seek to explore the effect of remote working on the personal income tax regime. It was announced that a discussion document shall be released during 2023 which shall outline workplace practices and policies, changes in the current environment and how different workplaces are affected by home office and travel allowance policies.

Solar incentive for businesses expanded but the solar incentive for individuals is a farce

It is no secret that South Africa is currently going through an electricity crisis and much was hoped from Minister Enoch Godongwana on this topic in delivering his Budget Speech today. This on the back of South Africa having experienced loadshedding for 207 days in 2022 compared to 75 days in 2021. In response to the crisis, National Treasury proposes tax incentives for businesses and individuals who produce renewable energy. This is aimed at bringing additional energy capacity onto the grid and achieving energy security in the long-term. In addition, the bounce-back scheme that was initially developed to assist small and medium businesses (SMEs) cope with financial distress during the COVID pandemic will be reviewed and amended to provide for Government loan guarantees to SMEs investing in solar-related projects.

SA Budget 2023: Solar panel tax incentive

In brief The 2023 Budget proposes a solar panel tax incentive (available for a period of one year) for individuals installing solar panels at private residences. Budget proposal Budget 2023 proposes an incentive to encourage households to invest in clean electricity generation capacity which can supplement electricity supply. Individuals who pay personal income tax and install new and unused solar photovoltaic (PV) panels can claim a rebate to the value of 25% of the cost of these panels, up to a maximum of R15,000, against their tax liability. The rebate applies to qualifying solar PV panels that are brought into use for the first time in the period from 1 March 2023 to 29 February 2024.

Budget 2023 gives relief to hard pressed South African taxpayers

By Joon Chong, Partner & Cor Kraamwinkel, Partner at Webber Wentzel. The proposals in South Africas 2023 National Budget include welcome moves on boosting energy generation, relief for consumers and businesses, and improving the efficiency of tax collection The National Budget delivered today by South Africas Minister of Finance, Enoch Godongwana, showed that the government is making some significant financial commitments to restore Eskom to viability and maintain social grants. But with GDP growth projected at 1.4% on average from 2023 to 2025, and a potential tapering-off of the commodities boom over the medium term, how will the government fund these commitments? Below we analyse some of the key proposals on energy and other relief, as well as steps to protect the tax base, foster economic growth and ensure efficient tax collection.   Energy We were pleased that government is taking steps to address the current electricity crisis, which the Read More …

Budget 2023 – Govt is so desperate to end load shedding it’s happy to slash your taxes

Government, which is desperate to end load shedding, will reward households and businesses with tax deductions if they opt for renewables. On Wednesday, Finance Minister Enoch Godongwana, during the tabling of the Budget, announced two tax measures to support the rollout of renewables by businesses and households and thereby relieve pressure on the national grid to reduce load shedding. Individuals from 1 March 2023 will be able to claim 25% in tax deductions on the cost of solar PV panels for rooftop installations. The incentive is capped at R15 000 and is available for one year, Godongwana said. So if an individual were to purchase 10 solar panels at the cost of R40 000, their personal income tax liability would be reduced by R10 000 for the 2023/24 financial year. The condition of the tax rebate for households is that the solar panels must be purchased and installed at a Read More …

Budget 2023 – Tax Proposals

Government proposes tax relief totalling R13 billion in 2023/24 to support the clean energytransition, increase the electricity supply and limit the impact of consistently high fuel prices. R4 billion in relief is provided for individuals that install solar panels, and R5 billion tocompanies through an expansion of the renewable energy tax incentive. Inflation-related adjustments to the personal income tax tables, the retirement tax tables,and transfer duties are provided. Excise duties on alcohol and tobacco will increase in line with expected inflation of 4.9 percent. The rate for sparkling wine is pegged at 3.2 times that of natural unfortified wine. As in the 2022 Budget, government again proposes no changes to the general fuel levy orthe Road Accident Fund levy. To limit the impact of the energy crisis on food prices, the diesel fuel levy refund will beextended to manufacturers of foodstuffs for a period of 2 years, from 1 April Read More …

Budget 2024 – Rates of Tax for Individuals

On this page you will see Individuals tax table, as well as the Tax Rebates and Tax Thresholds scroll down. 2024 tax year (1 March 2023 29 February 2024) 22 February 2023 See changes from last year: ​Taxable income (R) ​Rates of tax (R) 1 237 100 18% of taxable income 237 101 370 500 42 678 + 26% of taxable income above 237 100 370 501 512 800 77 362 + 31% of taxable income above 370 500 512 801 673 000 121 475 + 36% of taxable income above 512 800 673 001 857 900 179 147 + 39% of taxable income above 673 000 857 901 1 817 000 251 258 + 41% of taxable income above 857 900 1 817 001 and above 644 489 + 45% of taxable income above 1 817 000 2023 tax year (1 March 2022 28 February 2023) 23 February 2022 Read More …