Tax News

South African Tax Court rules in favour of taxpayer in most favoured nation test case

Authors: Mareli Treurnicht and Emil Brincker. On 12 June 2019 the Cape Town Tax Court delivered its judgment in the dividends tax test case between ABC Pty Ltd (Taxpayer) and the South African Revenue Service (SARS). The case pertained to SARSs refusal to refund dividends tax overpaid by the Taxpayer following the Taxpayers interpretation of the most favoured nation provision (MFN clause) in the double taxation agreement (DTA) between South Africa (SA) and the Netherlands (SA/Netherlands DTA) (Dutch MFN clause), read with the MFN clause in the SA/Sweden DTA (Swedish MFN clause) and the SA/Kuwait DTA.

REIT regime now extended to new exchanges

Authors: Kelsey Biddulph and Tessmerica Moodley.The South African Real Estate Investment Trust (REIT) structure is a listed property investment vehicle, similar to internationally recognised REIT structures, where a tax dispensation ensures a flow through of net property income to investors. A REIT is essentially a company that owns and operates income-producing immovable property.

Legal professional privilege protection available to taxpayers too

Authors: Emil Brincker and Louise Kotze. In a litigious context, the doctrine of legal professional privilege provides that communications between an attorney and a client are protected from disclosure in litigious proceedings. The protection afforded to a litigant in terms of this doctrine is aimed at encouraging and protecting the full and honest disclosure of information by clients to their legal advisors when seeking legal advice, which is necessary for the proper functioning of the South African adversarial system of litigation.

A (quin)tessential consideration for the commercial property sector: Section 13quin of the Income Tax Act

Authors: Tsanga Mukumba and Louis Botha. Recently, the South African Property Owners Association (SAPOA) released its Office Vacancy Report for the first quarter of 2019. According to one of the key findings of the report, there has been a quarter on quarter decline in SAPOAs assessment of the square meterage of commercial property under development from 559,000 sqm to 404,000 sqm.

SARS issues binding class ruling regarding unbundling transaction

Authors: Tsanga Mukumba and Louis Botha. Section 46 of the Income Tax Act, No 58 of 1962 (Act) provides tax relief where a company (Unbundling Co) wishes to unbundle its shareholding in a subsidiary (Unbundled Co), to the companys own shareholders. The Unbundling Cos shareholders indirect shareholding in the Unbundled Co is converted to a direct shareholding, in proportion to their shareholding in the Unbundling Co.

Tax exemption is not a formality the Tax Court considers the PBO status of a non-profit company

Authors: Louise Kotze and Louis Botha. In terms of s30 of the Income Tax Act, No 58 of 1962 (Act), an entity can only become a public benefit organisation (PBO) if it meets the requirements in that section and is approved by the South African Revenue Service (SARS) as a PBO. In practice, to be approved as a PBO, an application must be submitted to SARSs Tax Exemption Unit (TEU).

SARS lifts tax return threshold from R350 000 to R500 000

The SA Revenue Service announced on Tuesday that it has lifted the tax return threshold from R350 000 to R500 000. This means that people who earn less than R500 000 per year, and meet certain other criteria, will not need need to file tax returns, commissioner Edward Kieswetter said at a media briefing in Pretoria. SARS explained that taxpayers who meet the following criteria will not need to file returns.

Travel e-log book- SARS Logbook used to claim a deduction on personaltax

When can you claim for travel? If you receive a travel allowance from an employer or principal, you can claim a deduction on assessment of your annual income tax return for the use of a private motor vehicle for business purposes. What do I need to do? Firstly, record your motor vehicles odometer reading on 1 March, i.e. on the first day of a tax year.