Tax Season starts 1 July and for eFilers the process is even easier this year. Here are a few tips that will help you complete and submit your return easily, honestly and on time:
Category: Income Tax
Tax break offers opportunity to reduce under-insurance
Author: Kristy Jooste (Cape Business News) From March 2015, an amendment to the Income Tax Act will standardise the tax treatment of insurance policies that offer protection against death and disability. Currently, premiums on policies that pay out a lump sum on disability are not tax-deductible, but lump sums paid are tax-free. However, premiums on income-protection policies are tax-deductible, but monthly income on payout is taxed.
Deductibility of audit fees
Author: Beric Croome (Tax ENSight) On 7th March 2014 the Supreme Court of Appeal delivered judgment in the as yet unreported case of Commissioner for the South African Revenue Service v Mobile Telephone Networks Holdings (Pty) Ltd, (966/2012) [2014] ZASCA 4 (7 March 2014) which dealt with the deductibility of audit fees incurred for a dual or mixed purpose and the apportionment thereof for tax purposes in the light of section 11(a) of the Income Tax Act 58 of 1962, as amended (‘the Act’) read with sections 23(f) and 23(g) of the Act.
The political correctness of tax myths
Is South Africa being fairly compared? JOHANNESBURG – There is a perception that South Africa has a low tax to gross domestic product (GDP) ratio. A recent article stated that South Africa has an average tax rate of 25%, which ranks us at number 130 in the world.
Tax exemption on foreign employment income
In terms of current practice, remuneration derived from services rendered outside of South Africa is, subject to certain requirements, exempt from normal tax in South Africa in terms of s10(1)(o)(ii) of the Income Tax Act, No 58 of 1962 (Act).
Squeeze on personal taxpayer has reached its limits, SA warned
Author: Amanda Visser (BDlive) South Africa relies too heavily on personal income tax and on value added tax (VAT) in its overall tax mix. The tax system is “at full stretch”, and any further demands will distort economic activity and the behaviour of taxpayers. These warnings were sounded by Chris Evans, professor at the school of taxation and business law at the Australian School of Business. He said the scope for extracting tax in South Africa has been “fully utilised”.
Severance tax benefits – threshold increase
Tax on severance is an important aspect of the law for employers and employees to understand. The Basic Conditions of Employment Act, No. 75 of 1997 (BCEA) provides that an employer who dismisses an employee for ‘operational requirements’ must pay severance of one week’s remuneration for every completed year of service. However, this does not prohibit an employer from providing more than the statutory minimum in terms of a contract of employment, company policy, collective agreement or an agreement reached in terms of s189 of the Labour Relations Act, No. 66 of 1995 (LRA).
Taxation of hedge funds
Author: Heinrich Louw (CliffeDekkerHofmeyr) Following the release on 12 September 2012 of a proposed framework for the regulation of hedge funds, the National Treasury and the Financial Services Board released draft regulations (Draft Regulations), together with an explanatory memorandum (Memorandum), on 16 April 2014.
When is a company an operating company for tax purposes?
This is an important question in the context of preference share funding in renewable energy transactions, particularly in determining whether the funding is for a qualifying purpose and therefore exempt from the clutches of s8E and 8EA of the Income Tax Act, No 58 of 1962 (Income Tax Act).
Successive corporate reorganisation transactions
A number of advance tax rulings have recently been released by the South African Revenue Service (SARS) relating to the corporate tax roll- over relief rules contained in s41 to 47 of the Income Tax Act, No 58 of 1962 (Act). The most recent ruling in this regard is Binding Private Ruling No 168 (BPR 168), which was released on 17 April 2014. The facts in BPR 168 are relatively simple. Company A had acquired assets from company B in exchange for the issue of equity shares in company A in terms of an ‘asset-for-share transaction’ as defined in s42 of the Act.