Author: Roxanna Nyiri, National Head of Transfer Pricing and International Tax and Director BDO Johannesburg. The OECDs base erosion and profit shifting (BEPS) has been at the forefront of international tax discussions over the last number of years. Multinationals are concerned with how they will be affected and how tax authorities will be applying BEPS regulations.
Author: Nyasha Musviba
Country-by-country reporting: Co-operation is the name of the game
Author: Roxanna Nyiri, Director: Transfer Pricing at BDO Tax Services. The ramping-up of country-by-country (CbC) reporting to regulate transfer pricing and combat cross-border tax evasion, heralds a new global tax landscape. It makes for different demands by tax authorities worldwide and requires the provision of information at a much finer level of detail. As a result, the risks associated with transfer pricing rises significantly and companies need to strategically manage this new policy environment, especially given that the first CbC reports are required to be filed with SARS from 31 December 2017.
Increase of provisional tax estimates by SARS
Authors: Annalie Pinch and David Marais. In terms of paragraph 19(1)(b) of the Fourth Schedule to the Income Tax Act, 5, 1962 (the Fourth Schedule), every company that is a provisional taxpayer shall, during every period within which provisional tax is or may be payable by it as provided in terms of the Fourth Schedule, submit to the Commissioner of the South African Revenue Service (SARS), a return of an estimate of the total taxable income which will be derived by the company in respect of the year of assessment in respect of which provisional tax is or may be payable by the company.
SARS publishes draft notice to submit country-by-country, master file and local file returns
Author: Scott Salusbury. On 2 June 2017, the South African Revenue Service (SARS) published a draft public notice requiring the submission of country-by-country (CbC), master file and local file returns. This marks an important step towards the finalisation of South Africas transfer pricing documentation requirements. As a result of the work on the base erosion and profit shifting (BEPS) project, the Organization for Economic Cooperation and Developments Transfer Pricing Guidelines for Multinational Enterprises and Tax Authorities now include recommendations for a three-tiered approach to transfer pricing documentation (ie CbC report, master file and local file), which South Africa is in the process of implementing.
Refunds subject to set-off under the Tax Administration Act
Author: Robert Gad and Jo-Paula Roman. In order to create a more uniform system for the administration of taxes in South Africa, section 191 of the Tax Administration Act, 2011 (the TAA) has effectively replaced various refund and set-off provisions which appeared in respective tax acts. Section 191 of the TAA now provides that all tax debts that are due must be set-off against refunds, including the interest thereon, due by the South African Revenue Service (SARS) to that taxpayer.
The lawfulness of retrospective amendments in tax law
Author: Beric Croome. On 29 May 2017, Judge Fabricius delivered judgment in the Gauteng High Court in the case of Pienaar Brothers (Pty) Ltd vs Commissioner for the South African Revenue Service and the Minister of Finance, in a case dealing with the Taxation Laws Amendment Act, 2007 (the Amending Act) which inserted section 44(9A) into the Income Tax Act, 1962 (the Act). The taxpayer sought an order declaring that section 34(2) of the Amending Act is inconsistent with the Constitution, and invalid to the extent that it provides that section 44 (9A) of the Act shall be deemed to have come into operation on 21 February 2007 and to be applicable to any reduction or redemption of the share capital or share premium of a resultant in company, including the acquisition by that company of its shares in terms of section 85 of the Companies Act, on or after Read More …
SARS issues a further ruling on venture capital companies
Authors: Mansoor Parker and Anuschka Wischnewski. On 6 June 2017, the South African Revenue Service (SARS) issued binding private ruling 274 (BPR 274). BPR 274 deals with a venture capital company (VCC) investing in a company providing and expanding plants for the generation of solar electricity. This brings the number of binding private rulings that SARS has issued in respect of venture capital companies to four. Below, we compare the rulings in this matter with prior rulings issued by SARS to determine whether there are any trends with regard to rulings issued by SARS in respect of venture capital companies.
BEPS Action 8 on Hard-to-Value Intangibles: is this the last piece of the puzzle required by SARS to issue its updated Transfer Pricing Practice Note?
Author: Lavina Daya. One of the main action items identified by South Africas National Treasury in its summary of the countrys position on the G20/Organisation for Economic Co-operation and Development (OECD) action plan on base erosion and profit shifting (BEPS), is the requirement for the South African Revenue Service (SARS) to update the Transfer Pricing Practice Note in line with the OECD Transfer Pricing Guidelines to include new guidance on the arms length principle and an agreed approach to ensure appropriate pricing on intangibles that are difficult to value.
Africa Tax in Brief
Author: Celia Becker. GHANA: Customs duty on spare parts abolished On 14 June 2017, pursuant to the measures proposed in the 2017 Budget, Parliament passed the Customs Amendment Bill, 2017, which amends the Customs Act, 2015 by abolishing customs duties on the importation of vehicular (including motorcycles and bicycles) spare parts.
Ubi ius, ubi remedium: Proposed amendments to the Tax Administration Act
Author: Louis Botha (Associate at Cliffe Dekker Hofmeyr). Currently, in terms of section 9 of the Tax Administration Act, No 28 of 2011 (TAA) a decision made by a South African Revenue Services (SARS) official and a notice to a specific person issued by SARS, excluding a decision given effect to in an assessment or notice of assessment is regarded as made by a SARS official, authorised to do so or duly issued by SARS, until proven to the contrary. Furthermore, s9 makes provision for such a decision to be withdrawn or amended by the SARS official, a SARS official to whom the SARS official reports or a senior SARS official, at the request of the relevant person.