Author: Linda Ensor (BDlive) Pressure is mounting both within and outside Parliament for the government to introduce dedicated legislation to ban transfer pricing when it is used as a tax-avoidance measure to shift profit offshore. South Africa is estimated to lose tens of billions of rand annually from the abuse of transfer pricing by multinational groups, but South African Revenue Service (SARS) large business centre group executive Sunita Manik said on Wednesday that transfer pricing itself was accepted practice globally and could not be banned.
Author: Nyasha Musviba
Binding Private Ruling 166 – A change of domicile by a controlled foreign company
Author: BDO South Africa Binding Private Ruling 166, issued by SARS on 1 April 2014, involved an issue of concern to many holding companies in South Africa that have non-resident subsidiaries which hold their off-shore investments. The issue is whether a South African holding company will be deemed, for the purposes of para 11 of the Eighth Schedule to the Income Tax Act 58 of 1962, to have incurred a ‘disposal’ of assets if its controlled foreign subsidiary changes its domicile, even where its place of effective management remains outside South Africa.
The Cape Tax Court interprets the statutory criteria for approval by SARS as a tax-exempt PBO
Author: BDO South Africa The decision of the Cape Town Tax Court in ITC 1872 (2014) 76 SATC 225 brings long-awaited clarity to the interpretation of the statutory criteria that a public benefit organisation (PBO) needs to satisfy in order to qualify for tax exemption in terms of s 10(1)(cN) of the Income Tax Act 58 of 1962, read with the provisions of the Ninth Schedule to the Act.
Tax consequences arising from the writing off of loans
Author: Peter Dachs of ENSafricaWe are often spoken of as an economy with high levels of debt. Even when interest rates are high, we have never been scared of gearing ourselves so that we can buy that expensive car or holiday house in Hermanus. Companies too often have high levels of debt.
SARS appoints an external Committee of Investigation on complaints against its CEO
PRETORIA, 3 September 2014 – The South African Revenue Service (SARS) is a crucial fiscal institution in a democratic South Africa. It is an institution whose very foundations are built on the trust and the credibility that South African taxpayers confer on it.
Employer interim reconcilation open between 1 September and 31 October 2014
The employer interim reconciliation for the transaction period 1 March to 31 August 2014 is open between 1 September and 31 October 2014. During this period you should submit your interim reconciliation declaration to SARS.
Electronic communication with SARS
The South African Revenue Service (SARS) recently released the new rules for dispute resolution prescribed under section 103 of the Tax Administration Act No 28 of 2011 (TAA). Among the many new features, it is interesting to note the provisions relating to the delivery of documents by a taxpayer to SARS, and specifically with reference to the delivery of documents by electronic means.
Sale of shares by special purpose vehicle
Author: Heinrich Louw – DLA Cliffe Dekker Hofmeyr Author page » Judgment was handed down by a full bench of the High Court, Western Cape Division, in the matter of Capstone 556 (Pty) Ltd v Commissioner for the South African Revenue Service, on 26 August 2014. The matter was on appeal from the Tax Court (ITC 1867 75 SATC 273), on which we reported in our Tax Alert of 5 July 2013.
Debt restructuring – practical considerations
With effect from 1 January 2013, new rules were introduced in the Income Tax Act No. 58 of 1962 (‘the Act’) governing the tax consequences flowing from the reduction or waiver of debts. According to the Explanatory Memorandum, the amendments were prompted in response to the global financial crisis and the unusually large number of companies facing financial distress. The intention was therefore to establish a mechanism which facilitated debt reductions without creating an additional obligation to pay further tax.
The importance of documentation in tax disputes highlighted in the new dispute resolution rules
Authors: Stephen Lavetan and Taryn Solomon of ENSafrica With effect from 1 January 2013, new rules were introduced in the Income Tax Act No. 58 of 1962 (‘the Act’) governing the tax consequences flowing from the reduction or waiver of debts. According to the Explanatory Memorandum, the amendments were prompted in response to the global financial crisis and the unusually large number of companies facing financial distress. The intention was therefore to establish a mechanism which facilitated debt reductions without creating an additional obligation to pay further tax.