Author: Lorys Charalambous (Tax-News.com) On December 17, the South African Revenue Service (SARS) issued an explanatory memorandum on the 2015 Tax Administration Laws Amendment Bill (TALAB). In particular, the memorandum looks at the TALAB provisions giving effect to the collection of information from South African financial institutions (FIs), and the associated obligation on the FIs to register with SARS regarding the Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement (IGA) with the United States that was signed in July last year.
Category: Tax Returns
Proposed extension of existing prescription periods (section 99 of the Tax Administration Act)
Author: Mareli Treurnicht (Cliffe Dekker Hofmeyr). Section 99 of the Tax Administration Act, No 28 of 2011 (TAA) prescribes the period of limitations (ie prescription) for the issuance of assessments. Section 99 currently states that the South African Revenue Service (SARS) may not make an assessment in terms of Chapter 8 of the TAA, inter alia: three years after the date of assessment of an original assessment by SARS; (in the case of self-assessment for which a return is required) five years after the date of assessment of an original assessment by way of self-assessment by the taxpayer or, if no return is received, by SARS; or (in the case of a self-assessment for which no return is required) after the expiration of five years from either the date of the last payment of the tax for the tax period or the effective date, if no payment was made in respect Read More …
Delayed VAT refunds ‘causing cash flow woes for small business’
Author: Amanda Visser (BDlive). Delayed refunds on Value-Added Tax (VAT) have increased significantly, causing cash flow problems for especially small and medium-sized enterprises. This is according to tax practitioners interviewed this week, who said it was also increasing the cost of doing business as businesses need to pay professionals to get back what had been rightfully theirs in the first place. Victor Terblanche, chairman of the South African Institute of Tax Professionals’ (SAIT’s) VAT committee, said the VAT Act did not provide for a timeframe for the payment of VAT refunds, or a timeframe for the finalisation of audits.
SARS introduces electronic ‘suspension of payment’ applications
Taxpayers lodging a dispute with SARS can now electronically request that SARS suspend the payment of tax. However, please be aware that the suspension of payment should be requested at a branch if it is accompanying an objection or appeal. It must not be done via eFiling as eFiling only supports “suspension of payments” that do not accompany an objection or appeal. What if I don’t agree? What’s New? From 4 December 2015 for Income Tax, taxpayers will be able to electronically at a SARS branch and via eFiling:
OVER 5.94 MILLION MEET TAX DEADLINE
Pretoria, 29 November 2015 – The South African Revenue Service (SARS) Acting Commissioner, Jonas Makwakwa announced that SARS received 5.94 million tax returns at the end of the Tax Season for non-provisional taxpayers which ended on Friday, 27 November. Announcing the preliminary results Makwakwa paid tribute to taxpayers that met their responsibility. “No doubt this is a significant achievement. We are proud of the high level of fiscal citizenship demonstrated by taxpayers. Thank you South Africa, this Tax Season belongs to the millions of taxpayers that submitted their tax returns on time”. The 5.94 million submissions received were 11,52% higher than in 2014. This number includes individuals, trusts and prior year submissions. Compliance for taxpayers filing on time exceeded 90% for the third consecutive year.
Corrections of tax assessments – what is readily apparent to SARS?
Author: David Warneke Director and Head of Tax Technical at BDO South Africa. The latest version of the Tax Administration Laws Amendment Bill of 2015, which is likely to be promulgated in its current form, proposes that in future SARS will not be permitted to entertain so-called ‘requests for correction’ of tax assessments, except if SARS is satisfied that there is a (currently undefined) ‘readily apparent’ undisputed error in the assessment. In my view, it is likely that taxpayers will be severely prejudiced by this amendment. What is ‘readily apparent’ to one person may not be so to another. The number of cases in which SARS is likely to grant requests for corrections is likely to drop dramatically and a lack of consistency in interpretation between SARS’ assessors may be taken as a given.
The onus of proof rule for the imposition of understatement penalties
Author: Ruaan van Eeden As a basic principle, under s102(1) of the Tax Administration Act, No 28 of 2011 (TAA), the onus of proof that an amount is not taxable or that an amount is deductible, rests on the taxpayer, whereas under s102(2) of the TAA, the onus of proof pertaining to the facts upon which an understatement penalty is imposed, is upon the South African Revenue Service (SARS).
How must SARS issue a notice in terms of s172(1) of the Tax Administration Act?
One of the interesting Tax Administration cases of 2015 was Lifman and Others v The Commissioner of the South African Revenue Services and others (unreported), where the Western Cape High Court took a purposive approach to the interpretation of section 172(1) of the Tax Administration Act, No 28 of 2011 (“the Act”) i.e.: in light of the purpose for which it was enacted. The facts of the case are that during an inquiry in terms of section 50 of the Act into notorious Cape Town underground boss, Mark Lifman’s affairs, SARS found that Lifman and a number of close corporations (“CC’s”) of which he was the sole member, owed approximately R13 million in taxes.
Six ways to spend your tax rebate responsibly
Figuring out how you want to spend your tax rebate will be easier if you already have a list of financial goals. Whenever you get a pay-out, it helps enormously in resisting those impulses if it is already ‘mentally allocated’. You may be tempted, but the refund is less likely to be wasted. This is according to Lisa Griffith, Associate Director at BDO Wealth Advisers, who recommends that those who receive a tax refund must ask themselves what they are wanting to achieve in the forthcoming year? “Do you want to save for a deposit on a house? Or perhaps save for retirement? Maybe you are trying to pay off debt,” she says. Griffiths gives some guidance on key objectives that you should consider putting your tax rebate toward:
Disclosure to SARS and the treatment of pay-as-you-earn
Authors: Nicole Paulsen and Gigi Nyanin The disclosure to the South African Revenue Service (SARS) of potential tax defaults can be addressed in various ways. However, the formal Voluntary Disclosure Programme (VDP), as contemplated in the Tax Administration Act, No 28 of 2011 (TAA), is the preferred and recommended option. The VDP is a formal statutory process, regulated under Part B of Chapter 16 of the TAA, in terms of which a taxpayer can approach SARS voluntarily to regularise its tax affairs with the prospect of obtaining various forms of relief. It is important to note that upon a successful VDP application, the VDP process does provide relief in respect of understatement penalties (which could be up to 200% in severe cases), 100% relief from administrative non-compliance penalties and in addition thereto, SARS will not pursue criminal prosecution.