Introduction South African companies are increasingly looking to global expansion to build their capabilities and expand their operations into foreign jurisdictions. Where South Africans serve on the boards of foreign companies and render services to foreign entities, they typically do so in terms of split employment contracts in respect of their services rendered within and outside of South Africa. In addition to the remuneration, they may also receive directors’ fees for services rendered to the boards. Their employment contracts with the foreign company and the requirement that such services must be rendered outside of South Africa, are essential to ensure that these foreign entities are effectively managed in the countries where they are registered, and not in South Africa.
Author: Nyasha Musviba
Claiming VAT inputs
Commissioner for the South African Revenue Service v De Beers Consolidated Mines Limited 74 SATC 330, the current policy of the South African Revenue Service (SARS) is for a vendor to claim an input tax credit in respect of any Value-added Tax (VAT) paid on an expense, a direct or immediate link must exist between that expense and a taxable supply made by that vendor. The ultimate purpose for incurring the expense is ignored.
Limiting Interest Deductions
In the 2013 Budget Speech, the Minister of Finance announced that restricting the deduction of excessive interest expenditure claimed by taxpayers in debt financing schemes has been on the tax policy agenda for a number of years and accordingly, legislative steps are now being taken to limit the interest deductions claimed by taxpayers in such schemes.
VAT Registration of Foreign Business
Author: Carmen Moss Holdstock (Cliffe Dekker Hofmeyr) The draft Taxation Laws Amendment Bill 2013 (TLAB) was released for public comment on 5 July 2013. Among other things, the TLAB proposes that, in order to curtail foreign businesses that supply goods and services in ‘cyber space’ from escaping the VAT net, all foreign businesses supplying digital goods and services will be required to register as VAT vendors in South Africa.
Tax Strategy Needs to be Linked to Corporate Reputation
Author: Paul de Chalain (PwC) Hardly a day has gone by in the last 3 months that we have not seen comment in the marketplace on taxation. Politicians, tax administrations, NGO’s and supra-national organisations like the EU, G-8, G-20 or OECD have committed themselves to fighting tax evasion and tax fraud. It is noteworthy that in some initiatives perfectly legal and acceptable structures are placed on a par with fraud.
A Departure From ‘Adequate Reasons’ and Common Sense
Author: Daniel Areias & Johan Kotze (Bowman Gilfillan) All taxation , in one way or another, may impact upon fundamental human rights. However, to ensure that the imposition is not absolute, section 5 of the Promotion of Administrative Justice Act provides that every person, whose rights may have been materially and adversely affected by administrative action, may request written reasons for that action from the administrator responsible.
Beware: Tax scammers out phishing
Author: Fin24 The new tax season has opened and fraudsters are having a ball, conjuring up emails which look very professional and could fool many taxpayers. In their emails to unsuspecting taxpayers the “Sars scammers” are starting to mention refund amounts that make sense to the individuals they target.
SARS audits and taxpayers’ rights
Authors: Beric Croome & Jerome Brink (ENS) The Tax Administration Act, Act 28 of 2011 (‘the TAA’) came into effect on 1 October 2012. Its promulgation brought with it many changes to not only taxpayers’ rights and obligations but the reciprocal rights and obligations on the part of the South African Revenue Service (‘SARS’) in its continuous busines
Anomalies in new REIT regime could result in unforeseen tax implications
Property companies urged to get familiar with legislation before making the move to list. The Real Estate Investment Trust (REIT) regime is set to usher in a new era for the listed property sector by affording certain tax advantages to qualifying entities and providing certainty in respect of the
Krok heir faces R228m tax bill
Pretoria – Mark Krok, billionaire heir to an apartheid-era skin-lightening company, will be about R228m poorer if the SA Revenue Service (Sars) and the Australian Tax Office (ATO) have their way. The Sunday Times reported that Sars, on behalf of the ATO, is seeking an order to ring-fence Krok’s local assets – including a R37.5m mansion in Clifton, Cape Town, as well as vast chunks of pharmaceutical company Aspen and casino company Tsogo Sun. In 2006, Australia kicked off Operation Wickenby, targeting high-profile tax evaders – and their lawyers and accountants – who have set up shell companies and trusts in tax havens to evade the Australian tax office. Maxim Krok, Mark’s estranged half-brother, has also come under the spotlight. In 2010, the ATO unleashed investigators to scrutinise his tax records.