Author: Gerhard Badenhorst (Tax Executive at ENSafrica). The rules regarding the levying of interest on the late payment of value added tax (“VAT”) are often confusing, and the introduction of the Tax Administration Act, 28 of 2011 (the “TAA”) has contributed to the uncertainty as to the rules that apply. Levying of interest The TAA introduced a new interest regime for the levying of interest on unpaid taxes to ensure that the levying of interest is aligned across all taxes.
Tax News
Estate duty implications for non-resident individual investors in South African assets
Author: Heinrich Louw. On 21 January 2016, the South African Revenue Service (SARS) issued Binding Private Ruling 217 (Ruling). The Ruling deals with the estate duty implications for non-resident individual investors (Investors), specifically where such an Investor, who is a resident in Country X, purchases a linked investment plan from a company incorporated and resident in Country X, which carries on the business of life insurance (the Company). The key issue was how certain sections of the Estate Duty Act, No 45 of 1955 (EDA), would apply.
Interpretation of the term ‘substantially the whole’
Authors: Nicole Paulsen and Gigi Nyanin. The South African Revenue Service (SARS) released Binding General Ruling No. 20 (issue 2) (BGR 20) on 20 January 2016, which provides clarity on the interpretation of the term ‘substantially the whole’ as referred to in specific sections of the Income Tax Act, No 58 of 1962 (Act).
SARS Income Tax Rates for Companies, trusts and Small Business Corporations (SBC)
SARS Media Release: TAX RETURNS GIVE INSIGHT INTO ECONOMIC PERFORMANCE
Pretoria, 21 January 2016 – The National Treasury and South African Revenue Service will host a special workshop on the potential of tax administration records to provide insight into firm growth and performance, and hence economic growth. This will take place at the Linton House Auditorium at Brooklyn Bridge that houses SARS offices in Brooklyn, Pretoria from 9am. There is now a set of data for Corporate Income Tax (CIT), Personal Income Tax (PIT), Value-added Tax (VAT) and international trade spanning approximately six years that is being utilised for economic and policy research. The anonymous records hold information from more than 600 000 companies registered for various taxes. Some preliminary findings will be announced.
Exemption from Security Transfer Tax for collateral
Authors: Magda Snyckers and Kelle Gagné (ENSafrica). For years, the South African securities lending industry has been lobbying for an exemption from securities transfer tax (“STT”) for the outright transfer of listed equity securities as collateral. On 8 January 2016, the Taxation Laws Amendment Act 25 of 2015 was promulgated, which includes the long-awaited introduction to the Securities Transfer Tax Act 25 of 2007 (the “STT Act”) of such an exemption. This is very good news for the South African securities lending market and others, but parties will need to clear a few hurdles before availing themselves of the exemption.
South African Tax Tables 2012 to 2016 – rates of tax for individuals
2016 tax year (1 March 2015 – 29 February 2016) ?Taxable income (R) ?Rates of tax (R) ?0 – 181 900 ?18% of each R1 ?181 901 – 284 100 ?32 742 + 26% of the amount above 181 900 ?284 101 – 393 200 ?59 314 + 31% of the amount above 284 100 ?393 201 – 550 100 ?93 135 + 36% of the amount above 393 200 ?550 101 – 701 300 ?149 619 + 39% of the amount above 550 100 ?701 301 and above ?208 587 + 41% of the amount above 701 300
Nene’s budget booted
Authors: Andisiwe Makinana, Setumo Stone and Hlengiwe Nhlabathi (News24). Government is set to take the drastic step of revising ousted finance minister Nhlanhla Nene’s medium-term expenditure plans, as the economic situation has become a lot more dire since he presented it in October. This unprecedented move was revealed by ministers after an extraordinary ministers’ meeting on the economy this week.
GEPF not affected by new tax legislation
Author: BDlive. The Government Employees Pension Fund (GEPF) has assured its members and pensioners that the new Taxation Laws Amendment Act will not affect their pensions or benefits. The fund is SA’s largest pension fund and investor, with about 1.2-million members and more than R1-trillion in assets under management. It pointed out on Monday that as a defined benefit pension fund‚ the benefits of the fund were already taken as a one-third lump sum gratuity and the remaining two-thirds were taken as a pension.
The ins and outs of retirement reform
Author: Michelle Acton. A Q&A for provident fund and pension fund members As the reforms related to tax harmonisation of retirement funds is set to become a reality on1 March – or T-day, as it has become known – it is vital members are communicated with in order to avoid hasty, and potentially damaging actions. There has been much uncertainty from members as to how they will be impacted. The below Q&A aims to assist provident fund and pension fund members understand the latest amendments and to what extent they are impacted by the changes.