Author: Natasha Marrian (BDlive) The fraud and corruption case against former South African Revenue Service (SARS) official Mandisa Mokwena has again been shifted, this time to October 5. The case dates back to 2011. Ms Mokwena’s attorney, Johann Schafer, said on Monday that the National Prosecuting Authority (NPA) had asked for more time to decide whether to proceed with a corruption case against her. This was after she had made representations to the national director of public prosecutions on why the charges should be dropped.
Tax News
High Court overrules tax court on input VAT claim on sponsorships
Author: Prof Peter Surtees (Norton Rose Fulbright South Africa) If a taxpayer receives money, goods and services from sponsors in return for providing branding and marketing services to the sponsors, output VAT is payable on the value of these receipts. And if the sponsors decline to furnish tax invoices for the money, goods and services they receive from the taxpayer in return, may the taxpayer infer an input claim from available evidence? The tax court ruled that, when output VAT was due on the value of the receipts; the taxpayer could claim no input credits in the absence of tax invoices. On 6 February 2015 in ABC (Pty) Ltd v CSARS Case No A 129/2014 the High Court of the Western Cape overruled the tax court’s decision.
Income protection tax change likely to affect your salary, benefits
Author: Laura du Preez (Personal Finance) Life assurance companies have responded differently to the change in how income protection policies are taxed, which took effect at the beginning of this month, and you should know how this could affect your finances. Income protection policies provide you with a monthly income if you become disabled.
Make the most of tax-free savings
Author: Lisa Steyn (Mail and Guardian) Finance houses have moved quickly to offer tax-free products made possible by the minister. Financial institutions have scrambled to provide the most attractive tax-free savings, ranging from simple bank deposits to investments exposed to the stock markets. At the beginning of this month, the government introduced tax-free investment regulations in a bid to boost household savings. Regardless of what form the tax-exempt investment takes, the regulations allow for contributions of up to R30 000 a year (an average of R2 500 a month) and no more than R500 000 over a lifetime.
Provisional tax penalties made simpler – and harsher
Author: Mark Bechard Some of the penalties imposed on provisional taxpayers who fail to meet their obligations have recently been simplified, but others have been made more onerous. The changes to the penalties were made in amendments to the Income Tax Act and the Tax Administration Act.
10 Questions to ask when setting your own salary
Author: Lisa Girard (Entrepreneur Magazine) Many people become entrepreneurs because they don’t feel they’re getting paid enough for the work they do in the corporate world. Ironically, they may find themselves even lower on the salary scale when they open their own business.
SARS clamps down on share buy backs followed by the issue of shares
In practice taxpayers often enter into arrangements in terms of which a company buys back its own shares held by certain shareholders, and immediately thereafter issues new shares to new shareholders. This practice has long caused tax avoidance concerns for the South African Revenue Service (SARS), as it could circumvent the payment of capital gains tax (CGT) by the shareholder whose shares are bought back.
SARS extends the list of reportable arrangements
The Commissioner for the South African Revenue Service (SARS) issued an important notice (SARS Notice) on 16 March 2015. The SARS Notice was published in terms of s35(2) and s36(4) of the Tax Administration Act, No 28 of 2011 (TAA). Sections 34 to 39 of the TAA deal with so-called ‘reportable arrangements’. Essentially, if an arrangement has certain characteristics (as listed in s35(1) of the TAA) or if SARS has listed the arrangement in a public notice (in terms of s35(2) of the TAA), then the person who promotes the arrangement (called a promoter) and the person who may derive a tax benefit from the arrangement (called the participant) must report the arrangement to SARS.
Transfer Pricing Reportable arrangements – Notice published in Government Gazette
A public notice (the “Notice”) was issued in the Government Gazette dated 16 March 2015 in terms of which the Commissioner for the South African Revenue Service lists arrangements which are listed as reportable arrangements in terms of section 35(2) of the Tax Administration Act No 28 of 2011 (“TAA”), and excluded arrangements in terms of section 36(4) of the TAA. The effective date of the Notice is 16 March 2015.
Budget 2015: VAT untouched
Author: Deborah Tickle, Partner International Corporate Tax KPMG. Taxpayers were warned as far back as October 2014 that Budget 2015 would not be a happy one for them. Finance Minister, Nhlanhla Nene made it abundantly clear that more tax revenue was needed in the 2015/2016 year to cover the country’s budget deficit or “gap” between expenditure and revenue. The only question was which taxes would increase to “mind” this gap.