Author: Louis Botha Tax (Cliffe Dekker Hofmeyr). On 20 April 2017, the Tax Court handed down its decision in X Group (Pty) Ltd v The Commissioner for the South African Revenue Service (Case No: 13671) (as yet unreported). The case dealt with an amount of R90 million that X Group (Pty) Ltd (Taxpayer) had claimed as an expense or loss during the 2007 year of assessment, which deduction was disallowed by the South African Revenue Service (SARS).
Author: Nyasha Musviba
VAT rulingsHow and when to apply
Author: Varusha Moodaley (Senior Associate at Cliffe Dekker Hofmeyr). Human beings crave certainty even when it limits them. Robin S. Sharma. In practice, circumstances or proposed transactions may arise in terms of which the value-added tax (VAT) implications flowing therefrom are not always clear. It is a persons very desire for certainty that underlies the provisions of the Value-Added Tax Act, No 89 of 1991 (VAT Act) and the Tax Administration Act, No 28 of 2011 (TAA) that enables the Commissioner of the South African Revenue Service (SARS) to issue rulings regarding the VAT treatment of supplies made to or by a vendor in the course or furtherance of his enterprise.
Amendment in respect of foreign employment income exemption
Authors: Nandipha Mzizi and Louis Botha (Cliffe Dekker Hofmeyr). Alongside the 2017 Medium Term Budget Policy Statements, National Treasury released the revised version of the Taxation Laws Amendment Bill 27 of 2017 (Bill) on 25 October 2017. The Bill contains those proposals that were accepted by National Treasury and which were communicated to Parliaments Standing Committee on Finance, during the report-back hearings.
Buying a house and paying transfer duty Separate rights equals separate obligations
Author: Louis Botha (Associate at Cliffe Dekker Hofmeyr). In our recent Tax and Exchange Control Alert of 13 October 2017, we referred to the number of tax court judgments that were recently published by SARS on its website. One of these cases is the matter of Ms A and Mr B v The Commissioner for the South African Revenue Service (Case No IT13974 & 13993) (as yet unreported), handed down by the Tax Court on 24 March 2017. In this case Ms A and Mr B (Taxpayers) appealed against SARSs decision regarding the transfer duty payable on a property which they purchased in terms of a written sale agreement.
The power of prescription reinforced: The SCAs recent approach in respect of immovable property
The Supreme Court of Appeal recently delivered two pertinent judgments dealing with the issue of prescription in respect of immovable property claims. Read together, these decisions send a clear message to holders of real rights ostensibly created via registration of a mortgage bond or title deed conditions: Do not assume the luxury of an extended period within which such rights may be enforced.
TAX FREE INVESTMENTS
What is it? Tax Free Investments were introduced as an incentive to encourage household savings. This incentive is available from 1 March 2015. How will it work? The tax free investments may only be provided by a licenced bank, long-term insurers, a manager of registered collective schemes (with certain exceptions), the National Government, a mutual bank and a co-operative bank. Service providers must be designated by the Minister in the Gazette. As per the current Regulation, only the above are designated.
Taxation of Income from two sources
What to do if you receive income from two sources? Taxpayers who receive income from more than one source of employment or pension are reminded that the employees tax (PAYE) deducted by the respective employers or pension funds may not be enough to cover their final tax liability on assessment. The reason for this is the manner in which a taxpayers tax liability is calculated on assessment. The South African tax system is based on the principle of adding together all sources of income of a taxpayer into a single sum, and applying a progressive tax rate table to determine the final tax liability of the taxpayer on assessment. A progressive tax rate system means that the more income is earned, the higher is the marginal tax rate and more tax is paid on assessment.
How to complete your Retirement Annuity Fund Contributions on ITR12
If you receive the following error message on SARS eFiling, while completing the Retirement Annuity Fund Contributions section of your Income Tax Return (ITR12), please refer to the scenarios described below.
Africa Tax in Brief
CAMEROON: Treaty with South Africa enters into force On 13 July 2017, the Cameroon/South Africa Income Tax Treaty, 2015 entered into force and generally applies from 1 January 2018. GHANA: Value-added tax (VAT) on selected medical supplies abolished In terms of the VAT (Exemption of Active Ingredients, Selected Inputs and Selected Drugs or Pharmaceuticals) (Amendment) Regulations 2017, presented to Parliament on 1 August 2017, the 17.5% VAT/National Health Insurance Levy on selected imported medicines that are not produced locally, is abolished pursuant to the Budget for 2017.
The income tax implications of a return of capital
Author: Alexa Muller (Tax Associate at ENSAfrica). In terms of the South African Income Tax Act, 1962 (the Act), distributions received by or accrued to a shareholder of a company may constitute either a dividend or a return of capital each of which would give rise to different tax implications for the shareholder or company concerned. The term dividend, as defined in section 1 of the Act, excludes, inter alia, an amount distributed to the extent that the amount results in a reduction of the contributed tax capital of the company making the distribution. A return of capital, as defined in section 1 of the Act, means any amount transferred by a South African tax resident company for the benefit for or on behalf of any person in respect of any share in that company to the extent that that transfer results in a reduction of contributed tax capital of Read More …