Where there’s smoke there’s fire (and carbon tax) – National Treasury releases the Draft Regulations: Carbon Offsets

In November 2015, the Draft Carbon Tax Bill (Draft Bill) was published by National Treasury, setting out the framework within which carbon tax would be levied. We reported on the main tenets of the Draft Bill in our Tax Alert of 20 November 2015 (Carbon tax in South Africa). On 20 June 2016, flesh was given to this framework with the release of the Draft Regulations: Carbon Offsets (Draft Regulations), which were published in terms of clause 20(b) of the Draft Bill. The Explanatory Note for the Draft Regulations on Carbon Offset (Explanatory Note) was released at the same time. Section 4 of the Draft Bill states that carbon tax will be levied in respect of greenhouse gas (GHG) emissions resulting from:

SARS issues important tax ruling for renewable energy financing structures

Author: Mansoor Parker (ENSAfrica). On 13 April 2016, the South African Revenue Service (“SARS”) issued Binding Private Ruling 228 (“BPR 228”), which dealt with the issue whereby a project company becomes an operating company for the purpose of s8EA of the Income Tax Act, No 58 of 1962 (“ITA 1962”). This question is an important one in the context of financing the activities of renewable energy project companies but its relevance stretches further to many other infrastructure-related project companies.

Draft Carbon Tax Bill – Liable entities

The South African National Treasury has published a Draft Carbon Tax Bill (the Bill) for public comment. This article explores the aspects of the carbon tax regime that will feel out-of-the-ordinary for professional tax practitioners. Like the phenomenon to which it is intended to respond, namely climate change (as much an economic challenge as an environmental one), a comprehensive response to the carbon tax will require tax professionals to look beyond their usual sphere of operations and to cooperate with professionals from a range of other disciplines. This is also a function of the tax design which encompasses elements of tax law, carbon markets law, environmental law and financial and operational strategy. This article considers a fundamental connection established by the Bill between tax law and environmental law.

Carbon Tax Draft Bill published for comment

On Monday, 2 November 2015, the South African National Treasury published a Draft Carbon Tax Bill (the “Bill”) for public comment by 15 December 2015. At first glance, the Bill does not stray too far from the carbon tax design that Treasury has been proposing since 2010 in various discussion papers, national budget speeches and their associated explanatory memoranda and responses to stakeholder commentary on the design. Whilst the Bill does not change the essentials, it does progress certain of the detail while providing only a tantalising glimpse of some of the more interesting aspects of the design. While the proposed tax is vaunted as thecarbon tax, this is not the only or the first carbon tax imposed in South Africa. Emissions on new vehicles are subject to emissions taxation and approximately five years ago, the fossil fuel electricity levy was introduced. These are both taxes on greenhouse gas emissions, … Continue reading

Draft bill on carbon tax released

Author: Heinrich Louw (International Law Office). Having been the subject of various discussion papers since 2011, the introduction of a carbon tax in South Africa is becoming a reality with the release of a draft carbon tax bill earlier this month. It has been clear since at least 2013 that South Africa would opt for a carbon tax in order to price carbon, as opposed to an emissions-trading scheme. The draft bill sets out the mechanics of the carbon tax. Greenhouse gas levy Essentially, the carbon tax will be levied in respect of the greenhouse gases that result from:

Room for improvement in SA Carbon Tax Bill, says Centre for Environmental Rights

Author: Chantelle Kotze (Mining Review). At the start of December, the Centre for Environmental Rights (CER) submitted comments on the Carbon Tax Bill, 2015, which was published for public comment on 2 November by National Treasury. The Bill, which is intended to take effect in January 2017, aims to put a price on carbon by levying a tax of R120 per each ton of carbon dioxide equivalent (CO2e) emitted.

Carbon Tax – Liable Entities

Author: Mansoor Parker and Andrew Gilder (ENSafrica) On Monday 2 November 2015, the South African National Treasury published a Draft Carbon Tax Bill (the “Bill”) for public comment, with the comment period commencing immediately and continuing until 15 December 2015. Among the themes that we will be exploring in this series of articles on the Bill are the aspects of the carbon tax regime that will feel out-of-the-ordinary for professional tax practitioners. Like the phenomenon to which it is intended to respond, namely climate change (as much an economic challenge as an environmental one), a comprehensive response to the carbon tax will require tax professionals to look beyond their usual sphere of operations and to cooperate with professionals from a range of other disciplines. This is also a function of the tax design which encompasses elements of tax law, carbon markets law, environmental law and financial and operational strategy. While … Continue reading

Carbon tax in South Africa

Author: Heinrich Louw. After having been the subject of various discussion papers since 2011, the introduction of a carbon tax in South Africa is becoming a reality with the release of the Draft Carbon Tax Bill (Draft Bill) earlier this month. It has been clear since at least 2013 that South Africa would opt for a carbon tax in order to price carbon, as opposed to an emissions trading scheme. The Draft Bill now sets out the mechanics of the carbon tax.

Calculating a capital gain: current case law

Capital Gains Tax (CGT) is payable on the disposal of capital assets that were in the seller’s possession on, or were acquired after, 1 October 2001. In the recent Supreme Court of Appeal (“SCA”) judgement of The Commissioner for the South African Revenue Service v Stepney Investments (Pty) Ltd, the SCA considered the various valuation methods available in determining the value of a capital gain, namely the discount cash flow method (“DCF”) and the net asset value method (“NAV”).

National Treasury forges ahead with carbon tax plans

 Author: Ingé Lamprecht (Moneyweb). National Treasury has signaled its intention to forge ahead with the introduction of a controversial carbon tax, with the publication of a draft bill on Monday. It said however that it has taken the current state of mining and other distressed sectors into account. The combined effect of the exemptions in the carbon tax and the reduction in the electricity levy “will be designed to ensure that such sectors are not adversely affected when the carbon tax is implemented”. “The tax and revenue recycling measures are also designed to be revenue neutral from a macroeconomic perspective, but will not necessarily be neutral for (scope one) companies with significant emissions.”