Author: Tarryn Spearman(Grant Thornton) Significant changes were introduced to the way foreign dividends, received by South African residents, are treated for tax purposes. The purpose of these changes is to eliminate the disparity between the tax treatment of domestic and foreign dividends.
Category: Interpretation Notes
Limiting Interest Deductions
In the 2013 Budget Speech, the Minister of Finance announced that restricting the deduction of excessive interest expenditure claimed by taxpayers in debt financing schemes has been on the tax policy agenda for a number of years and accordingly, legislative steps are now being taken to limit the interest deductions claimed by taxpayers in such schemes.
A Departure From ‘Adequate Reasons’ and Common Sense
Author: Daniel Areias & Johan Kotze (Bowman Gilfillan) All taxation , in one way or another, may impact upon fundamental human rights. However, to ensure that the imposition is not absolute, section 5 of the Promotion of Administrative Justice Act provides that every person, whose rights may have been materially and adversely affected by administrative action, may request written reasons for that action from the administrator responsible.
SARS audits and taxpayers’ rights
Authors: Beric Croome & Jerome Brink (ENS) The Tax Administration Act, Act 28 of 2011 (‘the TAA’) came into effect on 1 October 2012. Its promulgation brought with it many changes to not only taxpayers’ rights and obligations but the reciprocal rights and obligations on the part of the South African Revenue Service (‘SARS’) in its continuous busines
Primary Residence Exclusion
Is it true that globally mobile employees can sell their homes and not pay capital gains tax even if they rented it out for a number of years? It is true in most cases. The general rule is that when you sell your home, the capital gain realised on the sale is excluded from capital gains tax up to a limit. Based on the Income Tax Act No. 58 of 1962 (the Act), you will pay no capital gains tax on the first R2,000,000 you make when you sell your home. There are, however, some restrictions on this exclusion.
Thin Capitalisation – SARS’ New Interpretation
Author: AJ Jansen van Nieuwenhuizen (Grant Thornton) Earlier this year, SARS released a draft Interpretation Note (IN) on how they would determine a taxpayer’s taxable income from certain international transactions. The draft IN provides taxpayers with guidance on how to apply the arm’s length principle when determining whether a taxpayer is thinly capitalised
Receiver Throws Information Net Wider
On 5th April 2013, the Commissioner: South African Revenue Service issued Government Notice number 260, which appeared in Government Gazette number 36346 on 5th April 2013, setting out returns of information which must be submitted by third parties in terms of section 26 of the Tax Administration Act, No 28 of 2011.
Sars has increased powers under the Tax Administration Act
An overview The recently promulgated Tax Administration Act, No. 28 of 2011 (TAA) contains provisions that grant some dramatically increased powers to the South African Revenue Service (Sars). Tax recovery on behalf of foreign governments Section 185 of the TAA contains the measures available to Sars to recover tax on behalf of foreign governments. Broadly defined, the provisions of section 185 provide that revenue authorities of a foreign country (with which South Africa has a tax treaty) can request Sars to assist in the collection of foreign taxes due by a person to that country.
Tax on foreign employment income likely to change
It is common practice in many multinational organisations for employees to render services in more than one country. In the case of South African tax residents working abroad on long-term assignments, the recent announcement in the 2013 budget regarding proposed changes to the foreign earnings exemption may potentially affect their South African tax liability in relation to foreign-earned remuneration.
Tax act could be subject to litigation
Source: Evan Pickworth (BusinessDay live) It may take a long time to bed down what the new Tax Administration Act means because there are a host of sections which could be subject to litigation, according to high court judge and government tax review head Dennis Davis.