The South African Income Tax Act 58 of 1962 defines a “spouse” in relation to any person as a person who is a partner of such person in a marriage, customary relationship or union recognised as a marriage under the laws of South Africa or any religion. The definition also includes a same-sex or heterosexual relationship which the Commissioner is satisfied is intended to be permanent. Spouses married out of community of property are taxed separately on their individual incomes.
Author: Nyasha Musviba
Malema trying to delay case – Sars lawyer
Pretoria – Julius Malema is seeking to delay a sequestration case brought against him by the SA Revenue Service (Sars), the High Court in Pretoria heard on Monday. Malema’s legal team brought an application asking for the matter to be postponed because he wanted to reverse an admission of liability, which he signed last year during negotiations with Sars.
Protecting your reputation: Deductibility of legal expenses
Authors: Nicole Paulsen and Danielle Botha (DLA Cliff Dekker Hofmeyer) The question of deductibility of legal expenses incurred to protect one’s reputation or the goodwill of a business seems to be a recent hot topic of conversation, especially when following the news. Interestingly, two international cases relating to the deductibility of legal expenses, both related to reducing reputational risk and challenging alleged unfounded allegations against the taxpayer, have recently been handed down in Australia and England, respectively.
On-charges and supplies subject to VAT
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 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.
Income Tax and VAT consequences of E-Tolls
Introduction The levying of tolls for the use of certain highways in Gauteng, the so called e-tolls, took effect on 3 December 2013. It is therefore appropriate to consider the income tax consequences arising from the payment of e-tolls in those cases where an employee is reimbursed for business travelling or is provided with a vehicle owned by their employer or where an employee receives a travelling allowance to finance the expenditure incurred whilst travelling on the employer’s business.
Customs bill gets escape clause to go back to old system
THE controversial Customs Control Bill adopted by Parliament’s finance committee on Wednesday includes a “fallback” provision allowing for a return to the current customs control system should the new one fail. A similar clause was included in the law that introduced value-added tax in 1991, allowing for a legal alternative to be implemented quickly if things do not work out as planned. The committee also adopted the Customs Duty Bill and the Customs and Excise Amendment Bill as part of a total revamp by the South African Revenue Service (SARS) of the customs system.
Taxing times ahead for Gordhan
The situation is likely to get tougher for consumers in the immediate future, economists warn, with tax increases being seen as one of the most obvious solutions open to Finance Minister Pravin Gordhan. They believe that finding more ways to cut back on government spending and raising taxes are the only immediate options open to Gordhan, who is presenting the annual budget at the end of this month. The South African consumer is already stressed, dealing with the side effects of a weakened rand, higher interest rates, inflation increases and now high petrol prices, which resulted in motorists rushing to fill tanks before the price hike to R13.96 a litre came into effect on February 5.
New tax treatment of medical expenses
Johannesburg – At present taxpayers aged under 65 years are on a hybrid system with regard to the income tax treatment of their medical expenses. While contributions to medical aids are subject to credit relief, medical expenses in excess of 7.5 % of taxable income are claimed as a deduction. On the other hand, taxpayers aged 65 years or older are on a deduction-only system. From 1 March 2014, all taxpayers, regardless of age, will be on a credit-only system. David Warneke of BDO SA explains what this means for taxpayers. Currently contributions to medical aids or medical expenses by the taxpayer’s employer are a taxable fringe benefit in the hands of the employee.
Applications to rescind a judgment secured by SARS by way of filing a statement with clerk
The judgment reported as Kakodia v CSARS (2013) 75 SATC 313 (KNHC) is a decision of the KwaZulu-Natal High Court in which the applicant taxpayer unsuccessfully applied to court for rescission of a “default judgment” granted against him in terms of section 114(1)(a)(ii) of the Customs and Excise Act 91 of 1964. The judgment was in respect of an alleged underpayment of customs duty and value-added tax amounting to R171 731.
Interpreting a judgment of the Supreme Court of Appeal – C:SARS v South African Custodial Services (Pty) Ltd 74 SATC 61 (SCA)
The South Gauteng Tax Court has recently had to make a determination of the effect of a direction given in a judgment handed down by the Supreme Court of Appeal in referring an assessment back to the Commissioner of the South African Revenue Service for correction. The matter that was heard by the SCA (C:SARS v South African Custodial Services (Pty) Ltd 74 SATC 61 (SCA)) had principally been concerned with whether improvements made to State property in terms of a public-private partnership constituted trading stock of the taxpayer. The costs incurred by the taxpayer had been claimed as a deduction on the basis that they were part of the cost of construction. Included in these costs were costs in respect of certain financial arrangements.