Author: Sophia Brink (University of Stellenbosch) This article highlights principles that might be used for the tax treatment of client loyalty programme transactions in the hands of the supplier. Function and types of client loyalty programmes A client loyalty programme is a programme through which the clientele and loyalty of members is retained by awarding them points or miles (usually accumulated on membership cards) as reward for the acquisition of goods or services from qualifying suppliers participating in the loyalty programme. These points or miles can accumulate on a membership card or a cash back reward is issued for a predetermined number of points or miles. The points, miles or cash back rewards are linked to a specific rand value and may later be exchanged for goods, services or a discounton the future acquisition of goods or services from the same qualifying suppliers. The supplier will incur an expense in supplying Read More …
Tax News
Why SARS should consider transfer pricing safe harbours
Author: Jonathan Sweidan (KPMG) Jonathan Sweidan argues that bilateral or multilateral safe harbours should be considered by SARS seeing as they can mitigate the major problem of double taxation. The South African Revenue Service (“SARS”) has declared that transfer pricing is one of the highest priorities in terms of revenue and enforcement.
Farmers are out of the woods – at least for a year
Author: SAIT Earlier this year, most farmers had quite a shock when they’ve heard that National Treasury, through the draft Taxation Laws Amendment Bill, 2014, proposed to remove the zero-rating for VAT purposes that they receive when they buy goods that are consumed for agricultural purposes. A simple showing of a VAT 103 certificate, indicating that the farmer qualifies for the zero-rating was all that it took to ensure that the goods are received at selling price less 14 per cent VAT.
The relevance of relevant material in terms of the draft Tax Administration Laws Amendment Act, 2014
Author: SAIT In the course of carrying out their mandate of assessing and collecting taxes owed to the government, the South African Revenue Services (SARS) frequently has to request “relevant material” from taxpayers. Currently, relevant material is defined as “any information, document or thing that is foreseeably relevant for the administration of a tax Act…” This definition, however, has caused practical challenges for SARS.
SARS must choose its remedies
The decision of Rogers J, in Commissioner for the South African Revenue Service v Tradex (Pty) Ltd and others (9 September 2014, case no 12949/2013, as yet unreported) has raised a number of issues pertaining to the circumstances under which the South African Revenue Service (SARS) is entitled to obtain a preservation order against a taxpayer in terms of s163 of the Tax Administration Act, No 28 of 2011 (TAA). Ultimately it was found that SARS was not entitled to a preservation order as it was not ‘required’ to secure the collection of the taxes that could have become due in that instance.
The OECD/G20 Base Erosion and profit shifting project leaders shed light on the future of the international tax landscape
Author: Lisa Brunton (DLA Cliffe Dekker Hofmeyr) The Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Sharing (BEPS) Action Plan, approved by the OECD Committee of Fiscal Affairs (CFA) in June 2013 and endorsed by the G20 Heads of Government in September 2013, was formulated to combat international tax avoidance by multinational enterprises (MNEs) through artificially shifting profits to low tax jurisdictions and eroding the tax bases of their primary high tax jurisdictions of operation.
BEPS: the OECD releases the first round of recommendations that are intended to bring about the most significant reform of the international tax system since the 1950s
The Base Erosion and Profit Shifting (BEPS) Project is high on the agenda of the South African Government. Senior government officials, including Deputy President Cyril Ramaphosa, political parties and senior South African Revenue Service (SARS) officials have all publically indicated that BEPS remains a matter of concern. In response, the Davis Tax Review Committee has been tasked to evaluate the South African tax system against internationally accepted tax practices and specifically the OECD’s BEPS project. The committee is expected to produce a report later this year.
Big decisions: Executives rely more on experience and advice than data to make business-defining choices: EIU/PwC report finds
· Highly data-driven companies are three times more likely to report significant improvement in making big decisions, but only 1 in 3 executives say their organisation is highly data-driven · Many executives sceptical or frustrated by the practical application of data and analytics for big decisions, especially in emerging markets
SA expected to continue its support of OECD Action Plan to address BEPS, says PwC Tax
In June 2012, the G20 leaders explicitly referred to “the need to prevent base erosion and profit shifting” (“BEPS”) in their meeting’s final declaration. In February 2013 the Organisation for Economic Cooperation and Development (OECD) issued a progress report ahead of that month’s G20 meeting and in July 2013 released its comprehensive Action Plan to address BEPS, containing 15 separate actions and work streams. The BEPS project marks the most significant change to international tax in decades and the fact that the first set of 7 deliverables have been issued by the OECD on time, as promised, in September 2014, is reflective of the global political consensus that is driving the momentum for change in the way international transactions are taxed.
MEDIA STATEMENT – Revised Draft Taxation Laws Amendment Bill, 2014, Revised Draft Tax Administration Laws Amendment Bill, 2014, and Response Document
The National Treasury today publishes the revised draft Taxation Laws Amendment Bill, 2014, (TLAB) revised draft Tax Administration Laws Amendment Bill 2014, (TALAB) and the draft Response Document that was presented to the Standing Committee on Finance (SCOF) in Parliament yesterday (15 October 2014).