Currently South Africa does not impose a withholding tax in respect of interest paid to any offshore investors. However as from 1 July 2013, the Income Tax Act (58 of 1962) will impose a new withholding tax on interest paid by a resident person to or for the benefit of any foreign person.
Category: Budget 2013/14
Tax Ombud: Another toothless entity?
By Ingé Lamprecht Questions abound on its independence, limited powers. JOHANNESBURG – The tax industry has been lobbying for an ombud system as a cost-effective remedy for taxpayers for some time. The Tax Ombud, it was envisaged, could offer a remedy for taxpayers to use in instances of failures in service delivery and enforcement of rights with regards to tax administration, without the need to escalate to court at great cost and time delay.
Carbon tax to earn R8-billion a year
The treasury will earn at least R8-billion from a R120 per tonne tax on carbon emissions from industry. But most companies will get a 60% discount. The treasury will earn at least R8-billion from a R120 per tonne tax on carbon emissions from industry. (Reuters) South Africa committed in 2009 to reduce its carbon emissions by 34% by 2020. Every government department was then told to do its part, and treasury chose a carbon tax. In this year’s Budget speech, Pravin Gordhan said the tax would start on January 1 2015.
Rationalisation of Withholding Taxes on Payments Made to Foreign Persons
Posted by: Chris Basson There has been a lot of uncertainty among foreign investors as well as South African persons with regard to withholding taxes. These taxes are usually withheld and paid over to SARS when foreign persons receive investment proceeds from South Africa. The Explanatory Memorandum on the Taxation Laws Amendment Bill 2012 proposes some changes which might be of benefit to the uncertain souls among us.
Pravin’s big retirement changes on track
You need to gear up your retirement planning to meet T-Day and P-Day, when government will implement major changes to the R3-trillion retirement savings industry. T-Day and P-Day are days when retirement fund reforms are scheduled to be implemented in or after 2015, with legislation based on government’s latest proposals for retirement reform being put before Parliament this year. The proposals are outlined in a discussion paper titled “2013 Retirement reform proposals for further consultations”.
Reforming the taxation of trusts: a long time coming
By Johan van der Walt High Net Worth Individuals (HNWI’s) and their use of trusts for tax and estate planning purposes go hand in hand. A trust is often praised for its “flexibility”. Open any financial planning periodical and there’s bound to be an article on the virtue of trusts.
Changes in tax interest announced
As part of his 2013 Budget proposals, Minister Gordhan announced various changes to the tax treatment of interest. Firstly, as announced last year, the tax treatment of so-called ‘hybrid debt’ will be amended so as to re-characterise such debt as dividends. The main concerns in this area appear to be debt instruments that do not have a realistic possibility of being repaid in 30 years, or debt that is convertible into shares at the option of the issuer. Banks and insurers will be excluded from this re-characterisation treatment.
The continued attack on the trust structure
It is not news that the fiscus has been bearing down on the use of Trusts by taxpayers in recent years. Finance Minister, Pravin Gordhan, has made this abundantly clear on numerous occasions and his sentiment seems to be echoed by Oupa Magashule, the Commissioner for the South African Revenue Service.
Tax could jettison attempts at business rescue
Business rescue will not be a viable option for companies in distress, until amendments are made to the Income Tax Act and VAT requirements. Any benefit that financially distressed companies could potentially derive from business rescue might be nullified by the tax implications of certain common business rescue processes. “In fact, unless amendments are made to the Income Tax Act and VAT requirements, successful business rescue will often not be possible,” says Dawid van der Berg of tax, auditing and business advisory company BDO.
PwC 2013 Tax Budget Comments
PwC 2013 Tax Budget Comments Personal Income Tax Higher income tax earners will have R231,25 less income tax to pay per month, assuming they have a basic annual taxable income of R700,000. Lower income tax earners will pay R86 less income tax annually, assuming they have an annual basic taxable income of R165, 600.The individual threshold for submitting a tax return was raised from R120,000 to R250,000 per year. This means that taxpayers that have taxable income of less than R250,000 annually will not be required to submit tax returns.