A major review of the taxation of alcoholic beverages is being undertaken by the Treasury as a contribution to the government’s fight against alcohol abuse and is likely to result in higher taxes and prices. The industry, faced with a deluge of regulatory proposals, is likely to resist the Treasury’s suggestions as it believes it is already over-taxed.It is also having to fight off a proposed ban on liquor advertising, which Health Minister Aaron Motsoaledi is pushing for, as well as restricted trading hours.
Author: Nyasha Musviba
BINDING RULING – COMMERCIAL BUILDING ALLOWANCE
1. Summary This ruling deals with the deduction of a commercial building allowance in respect of a unit, as contemplated in the Sectional Titles Act No. 95 of 1986 (the ST Act). 2. Relevant tax laws This is a binding private ruling issued in accordance with section 78(1) and published in accordance with section 87(2) of the Tax Administration Act No. 28 of 2011.
Policy proposing carbon offset scheme published
PRETORIA: The National Treasury has published a paper for public comment outlining proposals for a carbon offset scheme that will enable businesses to lower their carbon tax liability and make investments that will reduce greenhouse gas (GHG) emissions. The Carbon Offsets Paper, which was published on Tuesday, 29 April, is part of a set of measures to address climate change. South Africa has committed to reduce greenhouse gas emissions by 34 percent in 2020 and 42 percent in 2025.
Deductible Donations
By Doné Howell, Tax Partner Grant Thornton Johannesburg “Social responsibility is an ethical theory that an entity, be it an organisation or individual, has an obligation to act to benefit society at large.” When your moral compass and sense of social responsibility lead you to acts of benevolence, you could, in addition to the sense of wellbeing that comes from helping others, also qualify for a reduction in your tax bill.
The comparability challenge in South African transfer pricing
By AJ Jansen van Nieuwenhuizen A key aspect of transfer pricing is the determination of an arm’s length or market related price. A common approach is to establish a range of profit margins through benchmarking against comparable companies’ financial data and the profit margins that they earn. One of the challenges for taxpayers in South Africa (and other developing countries), is that besides for listed companies, there is very little publicly available
VAT and your residential levies
By Cliff Watson, Associate Tax Director, Grant Thornton Johannesburg The VAT Act was recently amended and changed the VAT implications of residential property levies paid to Home Owners Associations (HOAs). The history People living in residential complexes managed by sectional title body corporates were generally not required to pay VAT on the levies paid, as the services rendered by these body corporates to their members were generally exempted from VAT.
TAX CLEARANCE CERTIFICATES AND A TAXPAYER’S ONLY REMEDY
Tax clearance certificates play an important role in our economy and are, almost without exception, a requirement when a person submits a tender or bid for doing business with government. In this regard, tax clearance certificates had always been issued by the South African Revenue Service (SARS) in terms of internal policy. As there was no legislative framework governing the issue of tax clearance certificates, there was much uncertainty among taxpayers as to their entitlement to a tax
Reimbursing employees has VAT risks
Employers often reimburse staff for a variety of costs, most of which bear VAT. The VAT Act allows vendors as an input tax credit, any VAT incurred in respect of items acquired for the purposes of making taxable supplies. Deduction is also allowed where the supply was made to a person, acting on behalf of such vendor, who is the principal for the purposes of that supply, where the tax invoice is issued to such agent. Even in the absence of a valid agency agreement, SARS used to allow an input tax deduction in respect of reimbursed costs, presumably on the basis that it would be contrary to the spirit of the Act to have a cascading of tax. (Irrecoverable VAT forms part of cost of sales resulting on tax being levied on tax.)
Beware: You can be held liable for a company’s tax debts
Author: Erich Bell (SAIT Technical Advisor) Generally an individual may choose to run his business in the form of a company or close corporation for various commercial and other reasons. On the one hand it may be to ensure the continuity of the business should a key person pass on, or on the other hand to prevent personal liability in the event that business liquidate. There is a general perception that business owners think that their business (company) is totally separate from them – which in a legal sense is correct – and that
Note a change in requirement when issuing a VAT invoice
Author: David Warneke SARS recently issued a binding general ruling clarifying the requirement that the address of the recipient and supplier be reflected on a tax invoice, debit or credit note. The ruling is effective from 11 March 2014 and it applies for an indefinite period. In terms of the ruling, a businesses may elect to reflect either: The physical address from where the enterprise is being conducted; The postal address of the enterprise; or Both the physical and postal addresses of the enterprise.