Author: Piet Rampedi, Stephan Hofstatter and Mzilikazi wa Afrika (Times Live) Tax official Ivan Pillay has been handed a suspension notice, a day after he won a court bid on Thursday to be reinstated. Pillay was handed the notice on Friday, giving him until January 12 to show why he should not be suspended pending the outcome of an investigation. The notice, seen by Sunday Times reporters, said Pillay had to be suspended because of the danger that he could tamper with evidence during the investigation, as he had allegedly done before. Pillay faces a string of allegations, including that he: Established, recommended or was instrumental in setting up a covert intelligence unit within SARS;
Category: Tax Administration
SARS opened a new branch in MitChells Plain – Cape Town, Western Cape – South Africa
? Mitchells Plain is one of South Africa’s largest townships with a population of about 290,000 people. It is located about 32 km from the city of Cape Town, on the Cape Flats on the False Bay coast between Muizenberg and Khayelitsha. This is one of the reasons why SARS has decided to increase its reach in the area, by opening a new branch. Also making it easy for taxpayers to comply and assist in the facilitation of trade in the area.
Deferral of the implementation of the electronic Tax compliance status system
Tax clearance certificates (TCCs) are issued by the South African Revenue Service (SARS) to, inter alia, validate the status of a taxpayer and confirm that such taxpayer’s tax affairs are in order. TCCs are, almost without exception, required for tender or bid applications, to reflect good standing, foreign investment and for emigration purposes. A TCC is only valid for one year from the date of issue in respect of a tender and/or good standing, provided the taxpayer remains compliant with SARS requirements.
Professional tax advice vital in mitigation of penalties and interest
Author: Andrew Lewis – Tax Director (Cliffe Dekker Hofmeyr) Judgment was handed down in the Tax Court on 18 November 2014 in the case of Z v The Commissioner for for the South African Revenue Service (case number 13472), as yet unreported. The dispute concerned the calculation by the taxpayer of his capital gains tax liability arising pursuant to the disposal of shares. In 2007 the taxpayer disposed of his shares in a company for R841 million. In and around the time of the disposal of the shares, a company (A) instituted a damages claim against the taxpayer for an amount of R925 million which related to a transaction that took place in 2003. Shortly after the damages action was instituted, the taxpayer agreed to pay A an amount of almost R700 million in full and final settlement of its claim.
Interpretation of fiscal legislation
Author: Emil Brincker – Tax Director at DLA Cliffe Dekker Hofmeyr The judgment of the Supreme Court of Appeal in Commissioner SARS v Bosch (394/2013) [2014] ZASCA 171 (19 November 2014) (Bosch case) dealing with the fiscal consequences of a deferred delivery transaction is not only important in the context of the meaning of simulation, but also with reference to the way in which legislation should be interpreted. In the Bosch case the question arose as to the meaning of s8A of the Income Tax Act, No 58 of 1962, which read that there was to be included in a taxpayer’s income an amount of any gain made by him by the exercise, cession or release during a year of assessment of any right to acquire a marketable security.
Western Cape High Court rules on purpose of preservation orders
Author: Dr Beric Croome – ENSafrica Section 163 of the Tax Administration Act 28 of 2011 (“TAA”) provides that a senior SARS official may authorise an ex parte application to the High Court for an order for the preservation of any assets of a taxpayer, or other person prohibiting any person, subject to the conditions and exceptions as specified in the preservation order, from dealing in any manner with the assets to which the order relates.
The new tax court rules
Author: Alan Lewis (ACBS) This article considers some of the new rules, and their possible impact, on the future litigation process in the tax court. On 11 July 2014, the Minister of Finance promulgated new rules, governing the procedures to lodge an objection and appeal against an assessment, and related matters (“the new rules”). These rules replaced the previous rules, which had been promulgated on 1 April 2003.
Release of the 2014 Tax Statistics Bulletin
Joint Media Release by the National Treasury and the South African Revenue Service PRETORIA – The 2014 Tax Statistics bulletin was released today. This is the seventh edition of the publication. The objective of releasing the country’s Tax Statistics is to publicise available, comprehensive tax revenue data that can assist policy makers and provide insights on economic indicators to researchers, analysts, the media and the public in general. The 2014 Tax Statistics Bulletin provides an overview of tax revenue collection and tax return information for the 2009/10 to 2013/14 fiscal years, and the 2010 to 2013 tax years respectively.
Reportable arrangements – proposed replacement of the existing notices for purposes of sections 35(2) and 36(4) of the Tax Administration Act No. 28 of 2011
Authors: Robert Gad and Megan McCormack – ENSafrica Section 35(2) of the Tax Administration Act No. 28 of 2011 (the “TAA”) currently provides that an arrangement will be reportable, inter alia, if it is listed as such by the Commissioner for the South African Revenue Service (“Commissioner” or “SARS”) by public notice, and if the Commissioner is satisfied that the arrangement may lead to an undue tax benefit. Such inclusions are, however, subject to the provisions of section 36 of the TAA, which inter alia provides that the Commissioner may determine an arrangement to be an excluded arrangement by public notice if he is satisfied that the arrangement is not likely to lead to an undue tax benefit.
Small businesses owners can take a sigh of relief due to public participation by SAIT
Author: SAIT The Income Tax Act in its current form provides an array of tax incentives to incentivise the growth of small business corporations (‘SBC’). A small business corporation is basically, subject to certain exclusions, any close corporation, co-operative or private company of which all the shares are held by natural persons where the gross income of that close corporation, co-operative or private company does not exceed R20 million per year of assessment.