Tax authorities across the globe are working aggressively to collect taxes which they believe are collectable in their respective jurisdictions. States are entering into bilateral and multilateral agreements aimed at assisting each other in the collection of information and taxes. South Africa has actively taken part and in some respects been a regional leader in issues relating to the gathering of information and sharing thereof with other states to
Author: Nyasha Musviba
Securities transfer tax and earnout provisions
Introduction Often the parties to a sale of shares agreement agree to an earnout clause – a provision that part of the price will be paid in future if certain conditions are met. For example, the parties may agree that while the seller must transfer ownership of all the shares to the purchaser at the time of the sale, the purchaser will pay part of the purchase price only if the company reaches specified financial targets in future.
Contentious international corporate restructuring ruling
Author: Andrew Lewis (Cliffe Dekker Hofmeyr) The corporate tax rollover relief provisions contained in section 41 to section 47 of the Income Tax Act, No 58 of 1962 (Act) were recently expanded to cater for international corporate restructurings. The South African Revenue Service (SARS) released Binding Private Ruling 178 (BPR 178) on 14 August 2014 where the applicant sought clarity on the tax consequences of an international corporate restructuring in terms of section 42 (asset-for-share transactions) and s45 (intra-group transactions).
How to calculate your medical tax credit
Author: Ingé Lamprecht (Moneyweb) New system less beneficial to higher income earners. JOHANNESBURG – In an effort to improve the fairness and equity of the tax system, tax deductions for medical aid contributions and expenses have gradually been replaced with a tax credit system over the last few years.
Potential tools in a well-structured estate plan
Author: Anton Maskowitz (Moneyweb) Offshore trusts and companies could be essential. Although recent statistics have shown a steady decrease in the volume of offshore trusts and companies being established by South Africans for tax planning purposes, their value is just as relevant today for estate planning purposes as it had been in years gone by.
Nine things to know about tax-free savings
Author: Ingé Lamprecht (Moneyweb) JOHANNESBURG – Over the past six months, Moneyweb has published a number of articles about National Treasury’s proposal to introduce tax-free savings accounts from March 1 next year. Each time we have been flooded with e-mails asking for more information. This column gives an overview of these accounts and tries to answer a couple of these questions.
Which medical expenses are tax deductible?
Author: Ingé Lamprecht (Moneyweb) Deductions soon to be replaced by credits. JOHANNESBURG – The current tax filing season, which covers the 2014 tax year, marks the last time individuals will be able to claim a tax deduction for qualifying medical expenses.( From next year, this deduction will be replaced with a medical tax credit, similar to the one already applicable to medical aid contributions for taxpayers below the age of 65.
Proposed changes to reportable arrangements
The concept of reportable arrangements was introduced in 2005 to require early disclosure to the South African Revenue Service (SARS) of certain types of transaction that may give rise to tax avoidance concerns so as to enable SARS to investigate them timeously. Fewer than 150 transactions were reported by 2008, causing significant amendments to the reportable arrangement legislation to ensure a greater response. The draft Taxation Laws Amendment Bill of 2014, published in July for public comment, contains several proposed changes to the reportable arrangement legislation. Some of the main proposals are:
Refundable compliance rebate – revision of small business corporation tax relief
One of the important proposals relates to the revision of the Small Business Corporation (SBC) tax regime. An SBC is defined in s12E(4)(a) of the Income Tax Act, No 58 of 1962 as any close corporation or cooperative or any private company as defined in the Companies Act, No 71 of 2008 (thus excluding trusts, sole proprietors and partnerships), all shareholders of which are at all times during the year of assessment natural persons, where the gross income for the year of assessment does not exceed R20 million per annum. A number of other limitations with regard to shareholding and professional service businesses are included in the definition.
South Africa: transfer pricing legislation to be amended again
The draft Taxation Laws Amendment Bill (“DTLAB”), released for public comment on 17 July 2014, proposes certain changes to the transfer pricing secondary adjustment mechanism in terms of which the amount of the secondary adjustment will now be deemed to be a dividend in specie paid by the South African taxpayer to the non-resident connected person.