Author: Heinrich Louw (CliffeDekkerHofmeyr) Following the release on 12 September 2012 of a proposed framework for the regulation of hedge funds, the National Treasury and the Financial Services Board released draft regulations (Draft Regulations), together with an explanatory memorandum (Memorandum), on 16 April 2014.
Author: Nyasha Musviba
Raise tobacco tax to save lives
Author: Wilma Stassen (All Africa) As the globe marks world no-tobacco Day today, experts say it is time for South Africa to hike up tobacco taxes to save lives. “Higher taxes both increase government revenues and reduce consumption, making it the most cost-effective tobacco control measure available to governments,” says Dr Yussuf Saloojee from the National Council Against Smoking (NCAS). “Despite this, tobacco tax is comparatively low in South Africa.”
UK Court decision on corporate tax residency
Author: Justin Liebenberg (CliffeDekkerHofmeyr) A company incorporated outside South Africa can be tax resident here if its place of effective management (POEM) is located in South Africa. POEM is also often used as the tie-breaker to finally determine corporate tax residency under double tax agreements. A recent court decision in the UK sheds further light on POEM especially in the context of a double tax agreement.
BINDING PRIVATE RULING – DEFINITION OF UNRESTRICTED EQUITY INSTRUMENT
BINDING PRIVATE RULING: BPR 170 DATE: 30 May 2014 ACT : INCOME TAX ACT NO. 58 OF 1962 (the Act) SECTION : SECTION 8C(7) SUBJECT : DEFINITION OF UNRESTRICTED EQUITY INSTRUMENT
An update on the streamlining of the VAT registration process
The Taxation Laws Amendment Act, No. 31 of 2013 (TLAA) introduced legislative amendments aimed at streamlining the Value-Added Tax (VAT) registration process as contained in the Value-Added Tax Act, No. 89 of 1991 (VAT Act). In the 2013 Budget, the Minister of Finance, Pravin Gordhan (Minister) indicated that there would be efforts to reorganise the VAT registration process to ease the burden of complying with the requirements for registration. This culminated in amendments being made to s23(3)(b)(ii) and s23(3)(d) of the VAT Act, respectively.
Demystifying adequate delivery of a section 129 notice
A few weeks ago the Constitutional Court (CC) handed down judgment in the case of Kubyana v Standard Bank of South Africa Ltd (CCT 65/13) (Kubyana) regarding the interpretation of s129(1) of the National Credit Act, No 34 of 2005 (Act). S129 of the Act deals with the required procedures to be followed by a credit provider before debt enforcement can take place. This section provides that if a consumer is in default under a credit agreement the credit provider:
When is a company an operating company for tax purposes?
This is an important question in the context of preference share funding in renewable energy transactions, particularly in determining whether the funding is for a qualifying purpose and therefore exempt from the clutches of s8E and 8EA of the Income Tax Act, No 58 of 1962 (Income Tax Act).
Successive corporate reorganisation transactions
A number of advance tax rulings have recently been released by the South African Revenue Service (SARS) relating to the corporate tax roll- over relief rules contained in s41 to 47 of the Income Tax Act, No 58 of 1962 (Act). The most recent ruling in this regard is Binding Private Ruling No 168 (BPR 168), which was released on 17 April 2014. The facts in BPR 168 are relatively simple. Company A had acquired assets from company B in exchange for the issue of equity shares in company A in terms of an ‘asset-for-share transaction’ as defined in s42 of the Act.
VAT – Tax invoices: the address confusion
Author: Varusha Moodaley VAT vendors who make taxable supplies of goods or services are obliged to issue tax invoices to the recipients of such supplies within 21 days of having made such a supply. A valid tax invoice is of utmost importance because without such a document a vendor, being the recipient of a supply, is not entitled to claim any input tax deductions in respect of goods or services acquired in the course or furtherance of making taxable supplies.
Forum shopping – who decides on legal status of assessments?
The Tax Court is a specialist court equipped to adjudicate on tax-related matters pertaining to the legality and correctness of disputed assessments. Sections 104 to 107 of the Tax Administration Act(1) together with the rules of the Tax Court, prescribe the procedures to be followed where a tax assessment is disputed and essentially entrust the Tax Court with the power to determine the merits of a tax assessment. In Medox Limited v The Commissioner for the South African Revenue Service(2) the North Gauteng High Court was recently faced with the question of whether the High Court has the necessary jurisdiction to rule on the legal status of income tax assessments.