By Bruce Cameron Government uses the tax system to encourage you to save for retirement and to discourage you from cashing in your savings before you retire, Jenny Gordon, Alexander Forbes’s head of retail legal advice, says. This is the second article in a series of reports on the Personal Finance/Alexander Forbes Ready Set Retire conferences that were held around South Africa in March. You must take tax into consideration when you plan for retirement, but tax should not be the overriding consideration, Jenny Gordon says.
Author: Nyasha Musviba
Know the rules when hiring a tax practitioner
You are ultimately responsible for filing your income tax return, even if a tax practitioner submits the return on your behalf. And if the South African Revenue Service (SARS) levies a penalty and interest for the late or non-submission of your return, you – not the practitioner – are liable to pay it. However, Professor Sharon Smulders, the head of tax policy technical and research at the South African Institute of Tax Practitioners (Sait), says that if your return was filed late because of a failure on the part of a practitioner or accountant, such as neglecting to remind you to submit your paperwork in time, this constitutes unprofessional conduct and is a breach of the code of conduct prescribed by most professional bodies to which tax practitioners must belong.
Sars accepts Malema tax commitment
Economic Freedom Fighters leader Julius Malema’s acknowledgement that he failed to comply with past tax obligations was welcomed by the SA Revenue Service (Sars) on Monday. “The sentiments and apology expressed in the public statement released by Mr Malema are also welcomed,” spokesman Adrian Lackay said in a statement.
Full statement – Julius Malema on Sars deal
“I can confirm that I was informed by SARS today that it has accepted an offer of compromise I submitted in respect of my outstanding tax. This followed my making such an offer to SARS as provided for in the Tax Administration Act. I was informed that a governance committee considered my submission and found it to have complied with the requirements for such an offer.
Remedy for declined tax clearance certificate
On 18 February 2014 the North Gauteng High Court delivered a judgment on the remedies available when a tax clearance certificate (‘TCC’) is declined by SARS. What is clear from the judgment is that when a taxpayer is dependent on a TCC for financial or business purposes and it gets declined by SARS, the potential impending economic harm that may come to a taxpayer from such refusal does not entitle the taxpayer to a court order compelling SARS to issue such a TCC sought.
Discussion paper on the assumption of contingent liabilities in a going concern acquisition
SARS released the above discussion paper in December 2013 and it was open for comment to 31 March 2014. It deals with the treatment of so-called ‘free-standing’ contingent liabilities from the points of view of the seller as well as the purchaser, where the contingent liabilities are assumed by the purchaser as part settlement of the purchase price for the acquisition of the assets of a going concern.
Nowhere to hide – Convention is to increase the co-operation amongst tax authorities around the world
By Dr Beric Croome of ENSafrica On 21 February 2014 the Convention on Mutual Administrative Assistance in Tax Matters, (‘the Convention’) as amended, by the provisions of the Protocol amending the Convention on Mutual Administrative Assistance in Tax Matters which entered into force on 1 June 2011 was published in the Government Gazette.
Tax Court determines merit of tax assessments
The Tax Court is a specialist court specifically equipped to adjudicate on tax-related matters pertaining to the lawfulness and correctness of disputed assessments. Sections 104 to 107 of the Tax Administration Act, No 28 of 2011 (previously s81 to 88 of the Income Tax Act, No 58 of 1962 (Act)) together with the rules of the Tax Court, prescribe the procedures to be followed where a tax assessment is disputed and essentially entrusts the Tax Court with the power to determine the merits of a tax assessment.
Tax Prescription – when does it apply?
Authors: Peter Dachs and Bernard Du Plessis of ENSafrica Many taxpayers are generally aware that there is a prescription provision contained in our tax law. However it is not always understood that the prescription provisions apply only if certain statutory requirements are met. In this regard it is not uncommon for SARS to assess taxpayers beyond the prescription period of three years. It is therefore necessary for taxpayers to understand the circumstances in which prescription will apply and also the relevant statutory provisions dealing with prescription.
VAT – Non supplies and charges
For a transaction in South Africa to attract value-added tax (VAT), there should be a supply of goods or services by a vendor in the course or furtherance of an enterprise. Consider the following scenario: A and B, both vendors for VAT purposes, have a business arrangement whereby, for example, B provides consulting and management services to A. It transpires, in the course of their business arrangement, that A requires the use of a rented vehicle. B agrees to arrange for the vehicle. B enters into a rental agreement with C, also a VAT vendor, and the vehicle is made available for the benefit of A. C subsequently invoices B for R100 plus VAT of R14 and B pays C the R114. Naturally, B seeks to recover the cost from A. B does not wish to recover anything in excess of the cost from A because A is a good Read More …