Author: Laura du Preez You will be penalised if your contributions to government’s proposed tax-free savings accounts are higher than the annual or lifetime limits. National Treasury plans to introduce the products on March 1, 2015.
Category: Income Tax
Venture Capital regime needs overhaul
In the 2014 Budget Speech, the Minister of Finance noted the importance of small business and entrepreneurship in facilitating the creation of jobs in the private sector. In this regard, specific mention was made of proposed amendments to the venture capital company (“VCC”) tax regime in order to enhance support for entrepreneurial development.
Confusion over pension fund contributions
Author: Evan Pinkworth (BDLive) Most companies are in the dark on how to amend payrolls to accommodate the retirement fund and tax reforms coming in March next year, according to experts at a “Do or Die” pensions conference on Friday. The risk is that the new system may reduce take-home pay, and add fuel to existing threats from unions to go on strike over proposed pension changes.From March 1 next year, employer contributions to retirement funds will be included in employees’ salary packages and taxed as a fringe benefit.
Companies feel the pinch from changes to tax act
Author: Amanda Visser (BDLive) Some local companies are starting to feel the pinch following changes to the Income Tax Act which reclassify debt to equity when certain characteristics are present. Tax experts said last week the changes caught companies — whose loans from their multinational holding companies were subordinated in favour of creditors when they
SARS must not bully audited taxpayers
Authors: Andrew Wellsted and Rivalani Mutshinya (NortonRoseFulbright) A recent appeal case South African Revenue Service v Pretoria East Motors (Pty) Ltd, sets out the standard that SARS is expected to uphold when auditing taxpayers. SARS must try to understand the systems used by taxpayers before raising additional assessments and imposing penalties for incorrect tax treatment. The court criticised SARS for employing bullying tactics when dealing with taxpayers.
South African Tax and investment incentive
Basis of taxation South African residents are taxed on their worldwide income. Non-South African residents are taxed on their South African sourced income. A company will be a South African resident if it is incorporated in South Africa or if it has its place of effective management in South Africa. An individual will be a South African resident if he or she is ordinarily resident here or is physically present here for a specified number of days over a five year period. Any person who is deemed to be a resident of another state through the application of a double tax agreement will not be treated as a South African resident.
Bribe tycoon Hathurani hit with R1.2bn tax bill
Author: Loni Prinsloo (BDLive) The SA Revenue Service (SARS) has swooped on Edrees Hathurani, the controversial cash-and-carry tycoon at the centre of a bribery scandal involving the regulator, the Financial Services Board (FSB). On Friday morning, SARS officials served a court order on Hathurani’s Africa Cash ‘n Carry, a warehouse-style business in southern Johannesburg which sells 15 000 products from cosmetics to electronics, effectively freezing its assets.
Launch of 2014 Tax Season
The South African Revenue Service (SARS) launches the 2014 Tax Season. This annual campaign has evolved into an important partnership between government and taxpayers who make a vital contribution to our country’s tax system.
Understatement Penalties in hindsight
Some 20 months after the introduction of Understatement Penalties, it is worth taking stock of where taxpayers find themselves following their introduction, and highlighting some of the challenges they are experiencing. Many taxpayers have become all too familiar with this Understatement Penalty Percentage Table (fig. 1 below) contained in section 223 of the Tax Administration Act No 28 of 2011 (“the TAA”), which was mercifully amended earlier this year by the reduction of some of the penalty percentages:
SARS targets R1 trillion in tax collections
The SA Revenue Service intends collecting nearly R1 trillion during the 2014/15 tax season, which began on Tuesday. Tax revenue was expected to grow by 10.4% to R993.6 billion, with R899.8 billion collected last year, after refunds, Finance Minister Nhlanhla Nene told reporters in Pretoria. Nene said Sars’s ability to collect revenue had been one of the cornerstones of South Africa’s 20-year-old democracy as it affected government’s ability to deliver public services.