Prior to the enactment of the Tax Administration Act No. 28 of 2011 (“TAA”), the Commissioner: South African Revenue Service (“Commissioner”) was required to apply for a preservation order under the common law, as the Income Tax Act did not itself contain a mechanism whereby the Commissioner could apply for a preservation order under the fiscal statutes to ensure the preservation of assets where there was a concern that a taxpayer may dissipate assets and frustrate SARS’ attempts to recover the tax due.
Author: Nyasha Musviba
New VAT Regulations open Africa for SA business
Author: Diane Seccombe (Mazars) South African VAT vendors involved in the export of goods will warmly welcome new VAT regulations, which became effective on the 2nd of May 2014. South African legislation seeks to increase exports by incentivising exporters in many forms, and the Value-Added Tax Act (the Vat Act) is no exception. Where goods have been “exported” (as defined in section 1 of the Vat Act) by a vendor the supply is regarded as zero rated. A zero rated supply is beneficial as, despite
Where is tax dispute resolution and controversy heading?
Author: Johan van der Walt (KPMG) The tax world has changed globally (mainly OECD and G20 driven), in Africa (especially through African Tax Administration Forum initiatives) as well as locally (SARS becoming a world-class revenue authority with substantial technology and resource investment). Sharon Katz-Perlman, KPMG’s Head of Global Tax Dispute Resolution and Controversy recently observed: “Around the world, levels of tax disputes have reached record heights, and the rise in tax controversy shows no signs of abating.”
Preservation Order Assists SARS in Tax Action
Author: Beric Croome (ENSafrica) Prior to the enactment of the Tax Administration Act No. 28 of 2011 (“TAA”), the Commissioner: South African Revenue Service (“Commissioner”) was required to apply for a preservation order under the common law, as the Income Tax Act did not itself contain a mechanism whereby the Commissioner could apply for a preservation order under the fiscal statutes to ensure the preservation of assets where there was a concern that a taxpayer may dissipate assets and frustrate SARS’ attempts to recover the tax due.
Taxation working well but can be more efficient, says Judge Dennis Davis
Author: Amanda Visser (BDlive) South Africa was performing far better than any of the other developing countries that formed part of a recent World Bank study, it said. However, the country would experience “extraordinary instability” without social spending by the government and unless the system was made more efficient, said committee chairman Judge Dennis Davis. He said the committee was not looking for more money, but wanted to ensure the system worked at optimal levels.
Squeeze on personal taxpayer has reached its limits, SA warned
Author: Amanda Visser (BDlive) South Africa relies too heavily on personal income tax and on value added tax (VAT) in its overall tax mix. The tax system is “at full stretch”, and any further demands will distort economic activity and the behaviour of taxpayers. These warnings were sounded by Chris Evans, professor at the school of taxation and business law at the Australian School of Business. He said the scope for extracting tax in South Africa has been “fully utilised”.
African continent is complex and challenging to regulate tax legislation, according to PwC VAT guide
Africa, with its 54 countries, presents a complex and challenging environment to administer tax legislation. “Africa’s rapidly growing economy, complex consumer tax needs and increasingly complex tax regimes means that managing the tax burden for multinationals is a daunting task” says Charles de Wet, PwC Head of Indirect Tax for Africa. “Businesses entering African markets are faced with imprecise challenges of having to adapt to the various countries’ tax regulations. They can even suffer harsh consequences if they are not ‘Africa ready’,” says de Wet.
The taxation of risk policies – throw away existing principles
The National Treasury released the first batch of fiscal amendments on 10 June 2014. One of the most significant amendments relates to the way in which risk policies will be taxed in the hands of long-term insurance companies (“Insurers“). By way of background, the business of an insurer has to date been divided into four separate funds for tax purposes, being – the individual policyholder fund relating to policies owned by individuals; the company policyholder fund relating to policies owned by corporates; the untaxed policyholder fund relating to policies owned by untaxed entities and annuity contracts; and the corporate fund which reflected the remaining assets of the insurer.
The fine line between a restricted and unrestricted equity instrument
The complex tax legislation applicable to share incentive schemes has resulted in a number of taxpayers requesting advance tax rulings from the South African Revenue Service (SARS). On 30 May 2014, Binding Private Ruling No. 170 (Ruling) was released by SARS, which dealt with the question of whether the conditions imposed on an employee in respect of an employee share scheme would result in the shares constituting ‘restricted equity instruments’ for purposes of s8C of the Income Tax Act, No. 58 of 1962 (Act). It is clear from the Ruling that there is often a fine line between whether or not one is dealing with a ‘restricted equity instrument’.
Value Added Tax – Barter transactions
The fundamental governing principle of value-added tax (VAT) is that it is levied on the supply of goods and services by a vendor, and that the vendor can claim input tax in respect of goods and services received. It can be difficult enough dealing with the administrative aspects of VAT and determining the correct VAT treatment of transactions – imagine the additional frustration created when the South African Revenue Service (SARS)