Author: Laura du Preez (Personal Finance) Life assurance companies have responded differently to the change in how income protection policies are taxed, which took effect at the beginning of this month, and you should know how this could affect your finances. Income protection policies provide you with a monthly income if you become disabled.
Category: Income Tax
Provisional tax penalties made simpler – and harsher
Author: Mark Bechard Some of the penalties imposed on provisional taxpayers who fail to meet their obligations have recently been simplified, but others have been made more onerous. The changes to the penalties were made in amendments to the Income Tax Act and the Tax Administration Act.
10 Questions to ask when setting your own salary
Author: Lisa Girard (Entrepreneur Magazine) Many people become entrepreneurs because they don’t feel they’re getting paid enough for the work they do in the corporate world. Ironically, they may find themselves even lower on the salary scale when they open their own business.
SARS extends the list of reportable arrangements
The Commissioner for the South African Revenue Service (SARS) issued an important notice (SARS Notice) on 16 March 2015. The SARS Notice was published in terms of s35(2) and s36(4) of the Tax Administration Act, No 28 of 2011 (TAA). Sections 34 to 39 of the TAA deal with so-called ‘reportable arrangements’. Essentially, if an arrangement has certain characteristics (as listed in s35(1) of the TAA) or if SARS has listed the arrangement in a public notice (in terms of s35(2) of the TAA), then the person who promotes the arrangement (called a promoter) and the person who may derive a tax benefit from the arrangement (called the participant) must report the arrangement to SARS.
Binding Ruling on notional funding arrangement
The degree to which black people participate in the ownership of an entity is an important measure of an entity’s compliance with the black economic empowerment (BEE) legislation and the amended codes. The difficultly with many BEE transactions is that the participants do not have the funding available to acquire ownership (shares) in the measured entity. Historically, where the participants have used third party funding (eg preference shares) to finance the acquisition of shares in the measured entity, the funding has proved too costly, leaving the participants with no meaningful ownership in the measured entity.
Binding Ruling – Conversion of a PBO to a for-profit Company
In Binding Private Ruling 188 (‘BPR’) SARS recently dealt with the conversion of a tax exempt Public Benefit Organisation (‘PBO’) to a for-profit company. Parties to the proposed transaction were a company incorporated in a foreign country and limited by guarantee, which is registered in South Africa as an external company (the ‘Applicant’ or ‘Applicant PBO’) under section 23(1)(a) of the Companies Act, 2008, and a PBO under section 30 or the Income Tax Act (‘the Act’). Section 30 governs PBOs in the Act.
Binding Ruling – Waiver of an Intra-Group Loan that Funded the Acquisition of a Mining Operation
SARS recently released Binding Private Ruling 187 (‘BPR’) which deals with the waiver of a loan that funded the acquisition of a mining operation as a going concern under an intra-group transaction, as contemplated in section 45 of the Income Tax Act (the ‘Act’). Parties to the proposed transaction were a company incorporated in and a resident of South Africa (the ‘Applicant’), and a second company incorporated in and a resident of South Africa (the ‘Co-Applicant’).
Budget 2015 – Highlights
Highlights of Finance Minister Nhlanhla Nene’s 2015/16 main budget include: — A budget deficit of 3.9% of GDP is expected for 2014/15, narrowing to 2.5 percent in 2017/18; — Debt stock as a percentage of GDP is expected to stabilise at 43.7 percent in 2017/18; — The main budget non-interest expenditure ceiling has been reduced by R25 billion over the next two years;
Securities lending arrangements
A securities lending arrangement entails a lender advancing shares to a borrower to enable such borrower to on-deliver the marketable security in terms of a sale or on-lending transaction. The borrower is obliged to deliver the equivalent marketable security (in kind, quality and quantity) to the lender within a specified period of the original advance and to compensate the lender for any distributions to which he would have been entitled to during such period.
Waiver of an Intra-Group Loan that Funded the Acquisition of a Mining Operation
SARS recently released Binding Private Ruling 187 (‘BPR’) which deals with the waiver of a loan that funded the acquisition of a mining operation as a going concern under an intra-group transaction, as contemplated in section 45 of the Income Tax Act (the ‘Act’). Parties to the proposed transaction were a company incorporated in and a resident of South Africa (the ‘Applicant’), and a second company incorporated in and a resident of South Africa (the ‘Co-Applicant’).