During 2012 a number of significant amendments were made to the tax legislation in South Africa. This report provides a brief description of certain of these amendments which may be of interest to foreign companies that conduct business in South Africa as well as those seeking investment opportunities in South Africa.
Category: Tax Administration
Penalties as per Tax Adminstration Act
The Tax Administration Act No. 28 of 2011 (TAA) which (except for a few sections) came into effect on 1 October 2012, has introduced new rules governing reportable arrangements.
Sale of shares in a foreign company
South African residents are taxed on their worldwide income. Accordingly, a capital gain arising from the sale of shares in a foreign company will be subject to South African tax unless an exemption applies or a double tax agreement provides otherwise.
Tax Ombud: Another toothless entity?
By Ingé Lamprecht Questions abound on its independence, limited powers. JOHANNESBURG – The tax industry has been lobbying for an ombud system as a cost-effective remedy for taxpayers for some time. The Tax Ombud, it was envisaged, could offer a remedy for taxpayers to use in instances of failures in service delivery and enforcement of rights with regards to tax administration, without the need to escalate to court at great cost and time delay.
How the Mauritian tax treaty will affect business
Should foreigners invest directly into SA? The news* of the revised double tax agreement between South Africa and Mauritius (“the new DTA”) on Monday, 27 May, rang alarm bells for both Mauritian companies investing into South Africa as well as for South African companies expanding offshore via Mauritius.
South Africa, Mauritius DTA Revisions Could Catch Out Multinationals
by Lorys Charalambous, Tax-News.com, Cyprus According to Johan Hatting, PricewaterhouseCoopers’ senior international tax manager, the revised double taxation agreement (DTA) between South Africa and Mauritius, which was signed on May 17 this year and should, from January 1, 2015, replace the original treaty signed in July 1996, could prove problematic for South African multinationals.
Carbon tax to earn R8-billion a year
The treasury will earn at least R8-billion from a R120 per tonne tax on carbon emissions from industry. But most companies will get a 60% discount. The treasury will earn at least R8-billion from a R120 per tonne tax on carbon emissions from industry. (Reuters) South Africa committed in 2009 to reduce its carbon emissions by 34% by 2020. Every government department was then told to do its part, and treasury chose a carbon tax. In this year’s Budget speech, Pravin Gordhan said the tax would start on January 1 2015.
New tax form required for claiming relief for foreign taxes imposed or withheld on SA residents, says Deloitte
Issued by: Magna Carta (PR) Taxpayers claiming relief for foreign taxes improperly imposed or withheld should take note that they are now required to complete a new declaration form that must be completed before relief can be claimed, says Deloitte. “The form (‘FTW 01’) is applicable to South African residents seeking relief for improperly imposed or withheld foreign taxes in terms of Section 6quin of the Income Tax Act, which was introduced with the Tax Laws Amendment Bill of 2011,” says Louise Vosloo, Director in International Tax at Deloitte.
SA, Mauritius sign new tax treaty
South Africa has signed a new tax treaty with Mauritius, accounting firm PriceWaterhouse Cooper (PwC) said The abuse of the old, 1996 treaty was the main reason for the new treaty, said PwC international tax senior manager Johan Hatting (SUBS: CORR). Some had feared the SA Revenue Service and the National Treasury would simply terminate the treaty because it was being abused by South African multinationals, he said.
SARS: 15 years in jail a warning to rogue staff
SARS hopes a long jail sentence handed down to a former employee convicted of racketeering will deter staff from committing fraud. Yesterday (23 May 2013), the Cape Town High Court sentenced Edmund Fredericks and Aaron Carelse to 15 years in jail. Judge Daniel Dlodlo found that Fredericks, a former SARS employee, had been the key figure in several VAT and income tax scams. The two men were found guilty of fraud, forgery and “participating in an enterprise through a pattern of racketeering”.