SARS : Basic Guide to Income Tax for PBO and Donations deductions

In South Africa, an organisation that has a non-profit motive or is established or registered as a non-profit organisation does not automatically qualify for preferential tax treatment. An organisation will only enjoy preferential tax treatment after it has applied for and been granted approval as a Public Benefit Organisation (PBO).

Draft Interpretation Note: Deduction of expenditure incurred on repairs

SARS recently published Draft Interpretation Note on in which it seeks to provide guidance on the interpretation and application of section 11(d) which allows a deduction for expenditure incurred on repairs for the purposes of trade. Expenditure on repairs to an asset not comprising trading stock is likely to be of a capital nature, particularly when it is not incurred at regular intervals.

Draft Interpretation Note: determining a 'group of companies' for purposes of the corporate rules

This Draft Note when published as final one will provides guidance on the interaction of the definitions of a “group of companies” contained in sections 1(1) and 41(1). The corporate rules contain, amongst other things, special provisions relating to the income tax consequences (including capital gains tax consequences) of transactions between companies forming part of a “group of companies”. Under qualifying circumstances, the corporate rules make it possible for companies in such a group of companies to transfer assets between each other without adverse tax consequences.

Draft Interpretation Note : Treatment of Tips

Over the years tax implications on tips received by waiters had always been a grey area, SARS published a draft note that discusses and clarifies the potential income tax, SDL and UIF implications in respect of the receipt of tips encountered in (but not limited to) the service industry. The Note will focus on a “tripartite” tipping relationship between the following three parties: The patron, The recipient and The owner.