A recent decision in the Federal Court of Canada in the matter of Minister of National Revenue v BP Canada Energy Company 2015 FC 714 dealt with the Canadian law concerning the right of the Canadian Revenue Authority (‘CRA’) to demand information from taxpayers. In the preparation of its annual financial statements, BP Canada Energy Company (‘BP’) prepared workings in which it analysed tax positions that it had taken in which there might have been a difference between its interpretation of the law and the interpretation of the CRA. These working papers supported a reserve for tax contingencies. They also listed issues on which the interpretation was uncertain (‘issues list’).
Category: Tax Returns
Ex parte preservation orders: Krok v CSARS
This case was an appeal from the Gauteng Division of the High Court to the Supreme Court of Appeal (“SCA”) pertaining to the correctness of the granting of an ex parte preservation order applicationthat was brought against Mr Krok by the Commissioner of the South African Revenue Service (“SARS”) in terms of sections 163 and 185 of the Tax Administration Act No. 28 of 2011 (the “TAA”). The Court had to determine the question having regard to the application of the Double Taxation Agreement (“DTA” – as amended by a protocol) between South Africa and Australia.The DTA provided for the mutual assistance between the two jurisdictions for the collection of taxes.
Tax Court confirms importance of properly recording all matters relating to tax affairs
Author: Esther van Schalkwyk, Tax Consultant, BDO South Africa Section 102 of the Tax Administration Act places the burden of proving, amongst other things, that an amount or item is deductible or may be set-off, on the taxpayer. SARS, on the other hand, bears the onus in respect of, amongst other things, the facts on which SARS based the imposition of an understatement penalty. The Tax Court recently handed down judgment in VAT case no. 867, in which the Court once again confirmed the importance of the onus of proof in tax disputes.
Reduced tax assessments proposal only applicable for exceptional cases
Author: Erich Bell, Senior Tax Consultant at BDO SA Johannesburg, xx August 2015 – The 2015 Tax Administration Laws Amendment Bill (TALAB) proposes to amend the provisions regarding reduced assessments in the Tax Administration Act (TAA). If promulgated, this would affect taxpayers by reducing the time allowed for them to to request reduced assessments through the so-called ‘request for correction’ function on SARS’ eFiling to six months from date of assessment. A possible further six months’ extension could be granted in exceptional circumstances.
SARS: 2 MILLION INCOME TAX RETURNS SUBMITTED
The South African Revenue Service (SARS) is pleased to announce that it passed the 2 million mark of income tax returns by tax payers. This happened on Thursday, 20 August 2015 at 17:00. This indicates that 44.77% of taxpayers required to submit a tax return have already done so compared to 39.31% at the same time last year. The Tax Season began on 1 July 2015, when taxpayers could officially commence completing and submitting their 2015 tax returns. So far, 2 001 287 personal income tax returns have been submitted to SARS. Of the total submissions, 1 066 978 (53.31%) have been via eFiling while 933 527 (46.64%) of taxpayers opted to submit at our branches. A total of 783 (0.04%) taxpayers have submitted manually via post or a SARS drop box.
The tax free nature of a voluntary severance package
Loss of employment through retrenchment (forced or voluntary) is a reality many employees face in the current economic climate. Over the last number of years, various tax concessions have been made to ease the financial burden on employees facing retrenchment, mainly in the form of tax free thresholds which apply to certain lump sum employer payments. Navigating the tax pitfalls of retrenchment is important, as it is not necessarily guaranteed that all forms of payment upon retrenchment will qualify for preferential tax treatment.
Supreme Court of Appeal unconvinced by van der Merwe story
The Supreme Court of Appeal was approached to set aside a preservation order that had been granted in the Cape High Court. The appellant’s conduct in prosecuting the appeal was dilatory and the Court showed its displeasure. Non-compliance with legal processes and time limits in an appeal came to the fore in the recent litigation between SARS and Ms Candice-Jean van der Merwe. The latest judgment in this litigious saga involved an application by Ms van der Merwe to the Supreme Court of Appeal for condonation (a pardoning by the court) of her failure to timeously proceed with her appeal against a preservation order that had earlier been granted in favour of SARS by the Cape High Court in respect of certain of her assets.
‘Tax havens will chase out non-compliant taxpayers’ – As global efforts to close loopholes intensify.
Author: Ingé Lamprecht (Moneyweb) JOHANNESBURG – South Africans with unauthorised funds abroad better get their affairs in order because tighter regulation in tax havens will soon become a reality, a tax expert has warned. Speaking at a recent seminar hosted by The Wealth Corporation, Tony Davey, director at boutique consulting firm Tony Davey and Associates, said South Africans with offshore funds (foreign inheritances, foreign earnings pre-1998 or “schlep” funds like unspent travel allowances) that weren’t externalised in line with the R10 million offshore investment allowance or R1 million foreign discretionary allowance permitted by the South African Reserve Bank (Sarb) may soon bear the brunt of closer scrutiny.
Earning commission? This is what you can deduct
Author: Petro van Deventer (Unikone) In our previous article regarding income tax and deductions for individuals, the basic principles were discussed. This article focuses on individuals earning commission or other perks / benefits, as well as a fixed salary. We explain by example: John is a sales representative who earns an annual basic salary of R50 000. During the tax year he also earned commission income of R250 000, giving him a total taxable income of R300 000 for the year. John’s employer does not provide him with office space and he works from home. John travels extensively to see clients, using his car with a cost price of R150 000.
A “how to guide” for SARS objections and appeals
Author: Anton Lockem of Shepstone & Wylie Attorneys As a taxpayer, if you receive an assessment from the Commissioner of the South African Revenue Services (“SARS”) that you disagree with, you can lodge an objection in line with the Tax Administration Act, No. 28 of 2011 (“the Act”). Under section 96(2) of the Act, the Commissioner has to supply the taxpayer with the grounds of the assessment. It is often the case that the taxpayer needs to demand that the Commissioner comply with this statutory obligation, as there have been many cases where grounds have not been supplied. Thetaxpayer is required to submit a request for grounds within 30 days of receiving an assessment. Once grounds have been supplied, the taxpayer has 30 days to submit an objection to the assessment. Taxpayers need to submit the correct documentation for their objection in order for it to be valid: For personal income tax payers a notice of objection or form NOO is required via efiling; For corporate Read More …