Tax News

SARS – ​Medical Deductions Changes

Note: If the information pre-populated on your ITR12 does not match the information reflected on your medical scheme tax certificate(s) which you received from your medical scheme, please click on the Refresh Medical Data button to ensure that data from your latest medical scheme tax certificate(s) is populated onto your ITR12 return. We have introduced a few medical deduction changes to the ITR12 tax return from the 2017 year of assessment onwards. Below is a brief summary on how to complete your medical expenditure on your return:

SARS says pay up, but the court says no: An important case on taxpayers rights

Author: Louis Botha. In Nondabula v Commissioner: SARS and Another (4062/2016) [2017] ZAECMHC 21 (27 June 2017), heard by the Mthatha High Court, Nondabula (Taxpayer), brought an application to interdict the South African Revenue Service (SARS) from invoking the provisions of s179 of the Tax Administration Act, No 28 of 2011 (TAA) pending the final determination of the Taxpayers objection to an additional assessment of his income tax. Furthermore, the Taxpayer sought an order that SARS withdraw its third party notice, in terms of which SARS instructed Absa to withhold and pay over monies held in the Taxpayers bank account.

Transfer pricing and insurance structures in the BEPS Era

Author: Roxanna Nyiri, Director, BDO Tax. Insurance in todays world is no longer limited to a single country and has over the last few decades seen interesting global developments. Reinsurance and cell captive insurance have become an integral part of enterprise risk management. Reinsurance and cell captive insurance not only provide business with tools to manage their risk, limit their cost of insurance, but also to hedge against currency fluctuations. These developments, of course, also have their own unique tax consequences, especially where they span jurisdictional borders. With the advent of the Organisation of Economic Cooperation and Developments (OECDs) Base Erosion and Profit Shifting (BEPS) initiatives, tax authorities across the globe are scrutinising insurance structures from a tax perspective, especially with regard to transfer pricing. This increased scrutiny often leads to the cross border pricing related to intercompany insurance related transactions being challenged.

New double-taxation treaties coming in across Africa

Author: Katrina Mabika is Tax Director: Advisory Services for BDO Zambia. Africas enormous potential as an economic growth hub can be realised by consolidating the regions economic integration and facilitating trade and labour mobility across the continent.   Double taxation treaties are one of the ways to do this, enhancing our continents attractiveness as a trade destination and protecting the interests of African professionals, who often travel across the region for work.

MIRROR MIRROR ON THE WALL WHO HAS THE FAIREST TAX RATE OF THEM ALL?

Author: Roxanna Nyiri, National Head of Transfer Pricing and International Tax and Director BDO and Jolani Proxenos, International Tax & Transfer Pricing Consultant at BDO.   Developing countries (or capital-importing countries) are making strong efforts to attract foreign investments. South Africa and Mauritius are seen as developing countries and have adopted tax incentive regimes to increase their attractiveness for Multinationals to set-up locally.

South Africa signs the Multilateral BEPS Convention

Author: Roxanna Nyiri, National Head of Transfer Pricing and International Tax and Director BDO Johannesburg. The OECDs base erosion and profit shifting (BEPS) has been at the forefront of international tax discussions over the last number of years. Multinationals are concerned with how they will be affected and how tax authorities will be applying BEPS regulations.

Country-by-country reporting: Co-operation is the name of the game

Author: Roxanna Nyiri, Director: Transfer Pricing at BDO Tax Services. The ramping-up of country-by-country (CbC) reporting to regulate transfer pricing and combat cross-border tax evasion, heralds a new global tax landscape. It makes for different demands by tax authorities worldwide and requires the provision of information at a much finer level of detail. As a result, the risks associated with transfer pricing rises significantly and companies need to strategically manage this new policy environment, especially given that the first CbC reports are required to be filed with SARS from 31 December 2017.

Increase of provisional tax estimates by SARS

Authors: Annalie Pinch and David Marais. In terms of paragraph 19(1)(b) of the Fourth Schedule to the Income Tax Act, 5, 1962 (the Fourth Schedule), every company that is a provisional taxpayer shall, during every period within which provisional tax is or may be payable by it as provided in terms of the Fourth Schedule, submit to the Commissioner of the South African Revenue Service (SARS), a return of an estimate of the total taxable income which will be derived by the company in respect of the year of assessment in respect of which provisional tax is or may be payable by the company.

SARS publishes draft notice to submit country-by-country, master file and local file returns

Author: Scott Salusbury. On 2 June 2017, the South African Revenue Service (SARS) published a draft public notice requiring the submission of country-by-country (CbC), master file and local file returns. This marks an important step towards the finalisation of South Africas transfer pricing documentation requirements. As a result of the work on the base erosion and profit shifting (BEPS) project, the Organization for Economic Cooperation and Developments Transfer Pricing Guidelines for Multinational Enterprises and Tax Authorities now include recommendations for a three-tiered approach to transfer pricing documentation (ie CbC report, master file and local file), which South Africa is in the process of implementing.

Refunds subject to set-off under the Tax Administration Act

Author: Robert Gad and Jo-Paula Roman. In order to create a more uniform system for the administration of taxes in South Africa, section 191 of the Tax Administration Act, 2011 (the TAA) has effectively replaced various refund and set-off provisions which appeared in respective tax acts. Section 191 of the TAA now provides that all tax debts that are due must be set-off against refunds, including the interest thereon, due by the South African Revenue Service (SARS) to that taxpayer.