Tax News

SARS prescription only starts once tax return has been submitted

Author: Eric Madumo, a Candidate Attorney and Joon Chong, a Partner at Webber Wentzel. In the recent case of CSARS v Char Trade, the Supreme Court of Appeal (SCA) that prescription begins to run against CSARS when a return for secondary tax on companies (STC) is submitted to SARS by a taxpayer. In the Char Trade case, a return for STC had not been submitted by the taxpayer. Due to this, prescription had not begun to run against CSARS. The result of this is that CSARS was able to make an assessment in 2012 of the taxpayer’s liability amounting to ZAR 1,812,609 for the 2007 cycle.

Potential amendments affecting foreign trusts holding shares in foreign companies

Author: Joon Chong, Tax Partner at Webber Wentzel. National Treasury has held a few workshops this year to engage with stakeholders on proposed amendments before the draft amendment bills are circulated for comment. At one of these workshops attended by the Webber Wentzel Tax Team, National Treasury indicated that there could be amendments in the draft bills which would affect resident beneficiaries and donors to foreign trusts, where these foreign trusts hold shares in foreign companies.

Tax non-compliance status may be inaccurate

Authors: Joon Chong, a Tax Partner, Nina Keyser, a Tax Partner, Nirvasha Singh, a Tax Partner & Carryn Alexander, an Associate at Webber Wentzel. SARS replaced the Tax Clearance Certificate (TCC) system with the enhanced Tax Compliance Status (TCS) system on eFiling in April 2016. The new TCS system is aimed at improving tax compliance as taxpayers can better manage their TCS and remedy any non-compliance through the “My Compliance Profile” (MCP) function on eFiling.

Urgent reinstatement of tax compliance status granted

Author: Joon Chong, Tax Partner at Webber Wentzel. For certain taxpayers, a tax clearance certificate is of utmost importance in ensuring that it is able to receive payment and to tender for new services. In the recent Gauteng High Court decision (Red Ant Security Relocation and Eviction Services (Pty) Ltd v CSARS (2999/18)), the taxpayer applied for urgent interdictory relief for reinstatement of its tax compliance status in order to be able to generate a tax clearance certificate pending determination of review proceedings which it had instituted against CSARS.

Efficient or inept? South Africas corporate income tax rate and restructuring rules

Author: Candice Gibson. The Davis Tax Committee (DTC) released a media statement on 12 April 2018 in which it announced the publication of four additional final reports and conclusion of its work based on its Terms of Reference. For purposes of this alert, certain aspects from the report on the efficiency of South Africas corporate income tax (CIT) system (CIT Report) will be expanded upon, with particular reference to the reviews undertaken in respect of: the efficiency of the CIT rate; and the efficiency of the corporate restructuring rules (CRRs).

The capital v revenue question in the context of government grants: The SCA decides in favour of the motor manufacturing industry

Author: Louis Botha and Louise Kotze. In the recent case of Volkswagen South Africa (Pty) Ltd v Commissioner for South African Revenue Service 80 SATC 179, the age-old question of whether a receipt is capital or revenue in nature was addressed by the Supreme Court of Appeal (SCA), in the context of government grants paid to motor vehicle manufacturers.

Taxation of deceased estates – How to register a DECEASED ESTATE

Changesin legislation from 1 March 2016 Deaths prior to 1 March 2016: Post death income is taxable in the hands of the beneficiary. There is a deemed capital gain tax (CGT) event on date of death of the deceased. During the liquidation process, accounting for CGT on the disposal of assets is by way of aSpecial Trust registered at SARS. A Special Trust still applies for deaths prior to 1 March 2016 which are still currently being administered.

SARS – Customs requirements for South African travellers

The South African Revenue Service (SARS) would like to clarify a recent confusion in the media about Customs requirements for travellers returning to South Africa with personal valuables. In terms of Customs legislation, South African residents travelling abroad are not required to declare their personal effects when leaving the country, nor upon return. Personal effects is defined in legislation as including items such as personal laptops, iPads, cellphones, golf clubs, cameras and/or other high value items forming part of the travellers possessions when leaving the country.

STATEMENT BY ACTING COMMISSIONER, MARK KINGON – TAX SEASON 2018

MEDIA BRIEFING ON 04 JUNE 2018. We have been hard at work taking stock of how we can be more efficient and improve service to taxpayers. This requires that we make better use of our resources and technology, while factoring in feedback from taxpayers on what their pain-points are. Our main objective is to make tax compliance a simple and routine experience for the taxpayer. This is a work in progress, and we will be refining our initiatives with every tax season, over the next two years, taking on board the lessons learned.