Almost 80% of South African business leaders who participated in the latest International Business Report survey conducted by Grant Thornton saw South Africa’s tax system as one that encourages tax compliance. The same survey showed that 64% of the participants would welcome more global co-operation and guidance from tax authorities on what was acceptable and unacceptable tax planning‚ even if this provided less opportunity to reduce tax liabilities across borders. The survey was conducted between November and December last year‚ and 3‚500 chief executives, managing directors and chairmen were interviewed globally.
Category: Tax Returns
Tax Administration Act – Understatement penalty changes
Current provisions of the Tax Administration Act The Tax Administration Act No. 28 of 2011 (the TAA) became effective on 1 October 2012 and introduced the understatement penalty regime. In terms of section 222 of the TAA, a taxpayer must pay an understatement penalty in addition to the tax payable for the relevant tax period in the event of an “understatement”. What constitutes an “understatement”? An “understatement” is defined as any prejudice to the South African Revenue Service (SARS) or the fiscus in respect of a tax period as a result of:
SARS shortens time between date of assessment and 'second date'
In order to avoid interest on the late payment of assessed income tax, taxpayers have to pay outstanding tax by the ‘second date’ indicated on the income tax assessment. We are finding that SARS has shortened the number of days between the date of assessment and the second date in many cases, to only a few days. If your income tax calculation indicated that you will have to make a payment to SARS, please be aware that you may have to make the payment within a few days of submission of your return, in order to avoid interest.
Tax Administration Act – Criminal investigation in relation to a serious tax offence
The Tax Administration Act, No. 28 of 2011 (the TAA) took effect on 1 October 2012. In light of SARS’s strong emphasis on compliance, this article considers the procedures SARS should follow where it believes that a serious tax offence might have been committed. A “serious tax offence” is defined as “a tax offence for which a person may be liable on conviction to imprisonment for a period exceeding two years without the option of a fine or to a fine exceeding the equivalent amount of a fine under the Adjustment of Fines Act, 1991 (Act No. 101 of 1991).”
Malema trying to delay case – Sars lawyer
Pretoria – Julius Malema is seeking to delay a sequestration case brought against him by the SA Revenue Service (Sars), the High Court in Pretoria heard on Monday. Malema’s legal team brought an application asking for the matter to be postponed because he wanted to reverse an admission of liability, which he signed last year during negotiations with Sars.
New tax treatment of medical expenses
Johannesburg – At present taxpayers aged under 65 years are on a hybrid system with regard to the income tax treatment of their medical expenses. While contributions to medical aids are subject to credit relief, medical expenses in excess of 7.5 % of taxable income are claimed as a deduction. On the other hand, taxpayers aged 65 years or older are on a deduction-only system. From 1 March 2014, all taxpayers, regardless of age, will be on a credit-only system. David Warneke of BDO SA explains what this means for taxpayers. Currently contributions to medical aids or medical expenses by the taxpayer’s employer are a taxable fringe benefit in the hands of the employee.
FAQ – What are available options for a lump sum earned offshore?
I am not sure what to do with his money earned while working offshore. He writes: I work offshore and, therefore, my income is not taxable in SA. I have resigned from my company to move to another. The new company does not have a retirement/saving plan that I have been contributing into. It is Fidelity in the UK. As it was a company plan, I cannot continue with it and I am now going to get paid out this lump sum of $170 000. I want to invest this for retirement. What is the best way? Bring it into SA due to current favourable exchange rates and pay off my house, because it is about the same amount that is owed on the house?
On South African tax compliance, tax morality and taxpayers’ freedom to do tax planning – Canada, Ireland and South Africa are not worlds apart
The upcoming Budget Speech comes against the backdrop of a depressing South African growth rate, stubbornly high unemployment, a depreciating Rand (with more US tapering still to come), continued strikes in the mining sector, deadly service delivery protests and declining tax revenues. On a more positive note: In November 2013 Minister Gordhan pointed to the continued growth in tax compliance by South Africans and said: “… the ability to collect tax revenue …to finance the provision of public services and socioeconomic infrastructure has been a cornerstone of our democracy these 20 years.”
Shauwn Mpisane: More than 100 tax fraud charges withdrawn
Durban tender queen Shauwn Mpisane has walked out of the Durban Regional Court a free woman after the state withdrew more than 100 tax fraud charges against her. Mpisane, the owner of Zikhulise Cleaning, Maintenance and Transport, was charged with defrauding the SA Revenue Service of R4.7 million by submitting false VAT invoices, but applied to National Director of Public Prosecutions Advocate Mxolisi Nxasana to have the case withdrawn over prosecutorial misconduct. This morning Nxasana was at court for the hearing, at which prosecutor Arno Rossouw told Magistrate Blessing Msane that he had been instructed to withdraw the case in terms of Section 6 (b) of the Criminal Procedure Act.
2014 – The South African “Tax Year” Ahead In Perspective
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.