Aurthor: Hugo Van Zyl (Cross Border Tax and Exchange Control Specialist) The first and very important note to make, in dealing with South African tax issues: tax year 2014 ends on the last day of FEBRUARY 2014. The South African tax year for most individuals, are 1 March until the last day of February in the next calendar year. Corporates can change their tax year-end to align with the last day of their financial year-end, yet Trusts partners in a JV or partnership, are obliged to file assuming a tax year-end on the last day of February, despite their financial year-end being the last day of another month. Yes, sadly this date, Friday 28th 2014, is not even listed on the SARS webpage on important dates, yet is an extremely important tax deadline.
Category: Tax Administration
Employee Tax – Employment tax incentive
The Employment Tax Incentive Act, 2013 (the ETIA) was published in the Gazette on 18 December 2013 and gives effect to the proposals to subsidise the cost of hiring younger workers as first announced by Government in 2010. According to the Media Statement on the Draft Employment Tax Incentive Bill, this new incentive is aimed at encouraging employers to hire young and less experienced work seekers, as stated in the National Development Plan. The ETIA represents the first phase of the incentive and after a review of the effectiveness of the incentive, a second phase which could include additional policy features and possible refinement may be implemented after two years. In this article we discuss the legislative provisions of the first phase of the employment tax incentive.
Plan for Tax on Foreign Services Questioned
The proposed introduction of a 15% withholding tax on consultancy, management and technical fees for services rendered by a foreign consultant or company to a South African firm has been described as “unworkable”. The tax was proposed in the Taxation Laws Amendment Bill at the end of last year and was aimed at protecting the tax base, as the fees generated local deductions and thereby gave rise to a potential erosion of the tax base, the Treasury said in its explanatory memorandum to the bill.
Youth Wage Subsidy Comes into Effect Youth Wage Subsidy Comes into Effect
The Employment Tax Incentive Act, commonly known as the youth wage subsidy, came into effect at midnight, SABC news reported on Wednesday. The government hopes the law will promote employment for young people and create jobs in special economic zones once legislation providing for them has been promulgated. In terms of the act, employers will receive a tax incentive to employ young workers for a maximum of two years under certain conditions
How SA’s tax system stacks up
By Ingé Lamprecht Worldwide ranking improves from 32nd to 24th position –World Bank & PwC report. JOHANNESBURG – South Africa’s worldwide paying tax ranking has improved over the past year due to the success of the eFiling system and the abolishment of secondary tax on companies (STC). According to the Paying Taxes 2014 report,
Tax Administration Act – Suspension of payment of tax
Any taxpayer who wishes to object to or appeal against an assessment issued by the South African Revenue Service (SARS) must be aware that their obligation to pay any tax under that assessment is not automatically suspended by virtue of the submission of the objection or appeal itself. Any taxpayer who wishes for an objection or appeal to first be concluded before paying the tax due under an assessment would have to lodge a separate request for suspension of payment of tax in terms of section 164 of the Tax Administration Act No. 28 of 2011 (the TAA).
Ringo’s R1.5m ‘tax fraud’
Afro soul musician Ringo Madlingozi could face up to 15 years in jail or a hefty fine if he is found guilty of tax fraud and theft, said a tax lawyer on Sunday. Madlingozi allegedly hasn’t been paying his employees’ Pay As You Earn (PAYE) to SARS, but has been deducting it from their salaries since 1999. He reportedly owes SARS R1.5m in PAYE and R421693 in VAT. A charge sheet, which The New Age has seen, shows that the star has been hit with more than 40 charges of theft by SARS. He appeared in the Johannesburg Magistrate’s Court on Wednesday and is expected to be back in court on 9 January 2014.
Sars’ bizarre decision in Shauwn Mpisane case
Tender queen’s company given a tax-clearance certificate by taxman despite state charges of tax fraud Shauwn Mpisane, Durban’s tender queen, has won a major battle to keep her business empire intact. She’s been awarded tax clearance by the SA Revenue Service (Sars). Mpisane is due back in court on Wednesday on tax fraud charges – charges brought against her by Sars. City Press can reveal that Mpisane’s Zikhulise Cleaning, Maintenance and Transport was awarded tax clearance on September 20, despite the court case, after repeated applications were refused by Sars officials in Durban. The clearance, which City Press has seen, is valid for a year. It states that Mpisane is in “good standing” with Sars and had not, as at that date, contravened the Income Tax Act or the Value Added Tax Act.
Employment Tax Bill is signed into law
The long-awaited Employment Tax Incentive Bill, to create jobs and provide relevant skills for young, unemployed South Africans has been signed into law. Employers will receive a tax incentive to employ young workers in special economic zones for a maximum of two years, under certain conditions. The law takes effect on January 1. Employers will be able to claim the incentive on a sliding scale for any employee between 18 and 29 who was hired on or after October 1 this year and is receiving a monthly salary that is above the relevant minimum wage and less than R6000 a month.
The taxation of employer-provided low cost housing: A step in the right direction, but not yet a leap for mankind…
Introduction As part of Government’s anti-poverty objectives, Government is seeking to provide low-income South African’s with low cost housing and more specifically, ownership of residential property. In this regard, Government appears to be supportive of employers who provide low cost housing to low-income employees with the aim of enabling these employees with the opportunity to acquire ownership of the housing.