Author: Stephan Spamer & Mareli Treurnicht (ENS) As a general rule, subject to certain exceptions, local dividends received and accrued to a South African tax resident are exempt from normal tax in terms of section 10(1)(k) of the Income Tax Act, 1962 (“ITA”). One such exception applies to employee share schemes by virtue of the application of section 10(1)(k)(i)(dd).
Author: Nyasha Musviba
Pool of Compliant Tax Payers in SA is Growing, says SARS
Author: Amanda Visser (BusinessDay) Almost 92% of taxpayers who are obliged to submit a tax return this year made Friday’s deadline, which represents an increase of 5.5% from the previous year. South African Revenue Service (SARS) spokesman Adrian Lackay said more than 6-million returns were submitted by the deadline for nonprovisional taxpayers on Friday. These included 1.55-million outstanding tax returns from previous years. Overall, 13% more returns were submitted this year by the deadline than in 2012.
‘Unemotional data’ Show SA’s Tax Rate Compares Well With World Average
Author: Amanda Visser (BusinessDay) South Africa has improved its ranking in the ease of paying taxes for a typical small and medium-sized company from 32nd to 24th, a position it last held in 2011, mainly due to the success of the electronic filing system for individuals and companies and the reduction in the total tax rate. South Africa’s total tax rate of 30% compares favourably with the world average of 43% and Africa’s 52.9%, placing it in the 53rd position out of 189 economies that were measured in the Paying Taxes 2014 report released by the World Bank and professional services firm PwC.
Gaertner & Others (including Orion Cold Storage) v the Minister of Finance & Others
Background to the case Orion Cold Storage (Pty) Ltd (‘OCS’), the third applicant in this case, is involved in the importation and distribution of frozen foods. When a Canadian supplier instituted motion-proceedings against OCS, it came to SARS’s attention that the prices according to the supplier’s invoices were substantially higher than those on the invoices submitted to SARS for custom duty purposes. SARS suspected that OCS fraudulently manipulated these invoices in order to pay less duty and consequently a search was conducted on OCS’s premises in Muizenberg.
VAT Registration of Foreign e-commerce Suppliers
National Treasury released a tax bill in October 2013, following the Budget Speech in February and draft tax legislation on 4 July 2013, proposing changes to the VAT Act to require VAT registration of certain local and foreign suppliers of electronic services where consumption takes place in South Africa. In terms of the tax bill, local and foreign suppliers of electronic services will be required to register for VAT purposes where the services are supplied from a place in an export country and where a SA resident receives these services.
A Custom(ised) VAT Analysis
Author: Ross Robertson (Norton Rose Fulbright) A recent decision of the Supreme Court of Appeal has attracted a significant amount of attention. The court dismissed an appeal by a licensed foreign exchange dealer, Master Currency, against a revised value-added tax (VAT) assessment for two of its branches in the duty-free area at OR Tambo International Airport. Historically, the company had assumed that no VAT was chargeable as it was operating the branches in the duty-free area of the airport, which it considered to be located outside the Republic. The South African Revenue Service (SARS) disagreed with the taxpayer’s interpretation of a “duty-free area”, stating that the fees received by the two branches
A Conundrum? The VAT Consequences of a PBO Entering into a Joint Venture with a Third Party
Author: Prof Daniel Erasmus (TRM Services) A public benefit organisation (“PBO”) is a nonprofit company with members that includes the following objects as set out in its Memorandum of Incorporation: “… to develop technology and materials in support of such objectives…”. The PBO wants to enter into a Joint Venture arrangement with a company (“the Company”) that is able to contribute the skills and expertise “… to develop technology and materials in support of such objectives…”. But it only wants to do so if there are no adverse value-added tax (“VAT”) consequences.
Czech-mate: Sars closes in on Krejcir
Czech businessman Radovan Krejcir. File photo: Thobile Mathonsi Johannesburg – Twelve people dead, two on trial and one fighting extradition. They all have one thing in common: convicted Czech fugitive, Radovan Krejcir. But South African law enforcement haven’t been able to nail him for violent crime yet, so they went after him Al Capone style – for tax evasion. Around 4pm on Friday, the SA Revenue Service served Krejcir with a preservation order which stated that all his assets had been placed under the control of a curator.
SARS warns about ‘guaranteed refunds’
By Angelique Arde Beware of anyone who “guarantees” you a tax refund on submission of your tax return.This week, the South African Revenue Service (SARS) warned taxpayers of an increase in fraud involving “tax consultants” or intermediaries who promise clients substantial refunds in return for a 50-percent cut of the refund.
SA model has to explain expensive gifts to SARS
Cape Town – A South African swimwear model, Candice van der Merwe, may be summoned to the Cape High Court to explain the origins of $15.3m (R155m) she claims was a gift from an unnamed Arab admirer. Van der Merwe says the astounding sum was a gift from “a companion” she met at a private Seychelles resort.