The reportable arrangement provisions were established by the South African Revenue Service (SARS) with the objective of obtaining information on certain types of transactions. The circumstances under which a person should report an arrangement to SARS, as defined in section 34 of the Tax Administration Act, 2011 (the TAA), are contained in sections 34 to 39 of the TAA.
Author: Joon Chong, Tax Partner at Webber Wentzel. National Treasury has held a few workshops this year to engage with stakeholders on proposed amendments before the draft amendment bills are circulated for comment. At one of these workshops attended by the Webber Wentzel Tax Team, National Treasury indicated that there could be amendments in the draft bills which would affect resident beneficiaries and donors to foreign trusts, where these foreign trusts hold shares in foreign companies.
The South African Revenue Service (SARS) will host the tax experts and heads of tax administrations from BRICS member countries, namely Brazil, Russia, India China and South Africa, in Sandton next week. This will take place at the Hilton Hotel in Sandton from 18 to 21 June 2018. The BRICS Tax meetings follow on BRICS Customs meetings held in April this year, which contributed to creating an enabling framework for BRICS Customs cooperation.
The debt reduction provisions contained in section 19 of the Income Tax Act, 1962 (the Act) and paragraph 12A of the Eighth Schedule to the Act have been amended with effect from 1 January 2018 and are applicable to years of assessment commencing on or after that date. As a result of the changes, the ambit of these provisions has widened significantly, as discussed below, and the additional circumstances to the rules find application are worth noting.
Author: Jerome Brink (Associate at Cliffe Dekker Hofmeyr). The current s19 and paragraph 12A of the Eighth Schedule (Eighth Schedule) were introduced into the Income Tax Act, No 58 of 1962 (Act) with effect from years of assessment commencing on or after 1 January 2013. In essence, these provisions contain the debt reduction rules which attempt to create a uniform system that provides relief to persons under financial distress in certain circumstances. In simple terms, the relevant provisions set out the tax implications arising in respect of a debt that is reduced, cancelled, waived, or discharged by a creditor. The tax implications are dependent on what the debt originally funded, for instance trading stock, other deductible expenditure, allowance assets or capital assets.
Authors: Nandipha Mzizi and Louis Botha (Cliffe Dekker Hofmeyr). Alongside the 2017 Medium Term Budget Policy Statements, National Treasury released the revised version of the Taxation Laws Amendment Bill 27 of 2017 (Bill) on 25 October 2017. The Bill contains those proposals that were accepted by National Treasury and which were communicated to Parliaments Standing Committee on Finance, during the report-back hearings.
Author: Robert Gad, Nicolette Smit, Megan McCormack, Jo-Paula Roman(tax Directors at ENSAfrica). With virtual currencies such as Bitcoin becoming ever more popular and accessible, it is important that South African taxpayers carefully consider the tax and exchange control uncertainties that accompany the incorporation of these relatively new systems into businesses and/or investment portfolios. We highlight below some of the tax and exchange control consequences arising from transactions involving Bitcoin. We have not considered the tax and exchange control consequences of the mining of Bitcoin, as this will be considered in a separate article.
Author: Judith Becker (Tax Associate at ENSAfrica). In the 2017 South African Budget speech, the Minister of Finance raised governments concern that the current Controlled Foreign Company (CFC) rules do not capture foreign companies held by interposed trusts or foundations, and it was announced that countermeasures for the treatment of foreign companies held by trusts or foundations will be considered. Treasury, in an attempt to cover these loopholes, has introduced certain changes into the CFC legislation and a section that might have more disadvantages than Treasury intended.
Author: Roxanna Nyiri, Director, BDO Tax. Insurance in todays world is no longer limited to a single country and has over the last few decades seen interesting global developments. Reinsurance and cell captive insurance have become an integral part of enterprise risk management. Reinsurance and cell captive insurance not only provide business with tools to manage their risk, limit their cost of insurance, but also to hedge against currency fluctuations. These developments, of course, also have their own unique tax consequences, especially where they span jurisdictional borders. With the advent of the Organisation of Economic Cooperation and Developments (OECDs) Base Erosion and Profit Shifting (BEPS) initiatives, tax authorities across the globe are scrutinising insurance structures from a tax perspective, especially with regard to transfer pricing. This increased scrutiny often leads to the cross border pricing related to intercompany insurance related transactions being challenged.
Author: Katrina Mabika is Tax Director: Advisory Services for BDO Zambia. Africas enormous potential as an economic growth hub can be realised by consolidating the regions economic integration and facilitating trade and labour mobility across the continent. Double taxation treaties are one of the ways to do this, enhancing our continents attractiveness as a trade destination and protecting the interests of African professionals, who often travel across the region for work.