In support of the Presidents call to the Covid-19 pandemic, that Social Distancing be observed at all times and that we should at most stay indoors and limit movement, SARS is responding by rapidly enhancing its efforts to further simplify the tax return filing requirements for individual taxpayers and removing the need to travel to our Branches in 2020. Through the increased use of third-party data, SARS will be completing your tax return for you more accurately than ever. Where we have the required information we will provide you with a proposed assessment without the need to file a tax return. This enables you to view, accept or edit your proposed assessment from the comfort of your home or place of work using eFiling or SARS MobiApp.
Authors: Heinrich Louw and Ndzalama Dumisa. In the recent case of SIP Project Managers (Pty) Ltd v The Commissioner for the South African Revenue Service (Case Number 11521/2020) (as yet unreported), the High Court set aside a notice by the South African Revenue Service (SARS) to a bank to debit a taxpayers bank account in terms of section 179 of the Tax Administration Act 28 of 2011 (TAA), and ordered SARS to repay the amount to the taxpayer.
Author: Ben Strauss. Businesses and individuals may well ask themselves what practical, day-to-day tax consequences the COVID-19 pandemic now holds for them. For example, a company operating a financial services business may be obliged to incur expenditure which it would not incur in the ordinary course, such as sanitizers, gloves, masks and temperature measuring equipment for screening employees and customers. A taxpayer is entitled to deduct expenditure provided certain requirements are met. Notably, to be deductible, the expenditure must be actually incurred in the production of income as contemplated in section 11(a) of the Income Tax Act, 58 of 1962 (Act).
Authors: Joon Chong,Dhevarsha Ramjettan,Johan Olivier,Shane Johnson,Bianca Viljoen,Zipho Tile. Since the launch of TERS, there has been (almost) daily changes introduced by the Unemployment Insurance Fund. Important amendments to TERS were gazetted on 8 April 2020. Following those amendments, the Minister of Employment & Labour signed off on further amendments and corrections on 16 and 20 April 2020, respectively. In addition to these changes, the UIF has also publicly released the method of calculation for TERS benefits. We highlight 5 important updates on TERS for employers below.
Authors: Anne Bennett, Donald Fisher-Jeffes and Neo Penn from Webber Wentzel. Covid-19 is only anticipated to peak in South Africa (SA) in September 2020, with international air travel only being permitted once the current lockdown restrictions are reduced to Level 1. This may result in some chief executive officers, or other senior executives/board members of foreign companies being unable to travel from SA to attend board meetings or conduct business in the country where the company is tax resident. Could this put the foreign company at risk of becoming South African tax resident?
Author: Craig Miller, a Director at Webber Wentzel. On occasions when company executives have to pay back a portion of their remuneration, the fiscus may unjustifiably benefit at the expense of employers from the tax previously paid on these amounts. This situation could be made fairer by adding a simple provision to the Income Tax Act. Company executives may sometimes have to pay back some of their remuneration to their former employers. This could arise either from current economic volatility impacting incentive arrangements, or the various corporate financial scandals which have engulfed SA over the last few years.
Author: Ben Strauss. In terms of section 12J of the Income Tax Act 58 of 1962 (Act), put simply, a person who invests in an approved venture capital company may claim an immediate income tax deduction equal to the amount invested (subject to limitations). A venture capital company will only be approved as such if, among other requirements, the sole object of the company is the management of investments in companies that are qualifying companies.
Author: Louis Botha. Recently, the South African Revenue Service (SARS) announced that it would no longer be issuing printed tax clearance certificates (TCCs). The announcement was not unexpected as SARS had already indicated in 2015 when the tax compliance status (TCS) system was implemented, that it would cease issuing printed TCCs at a future date.
The reportable arrangement provisions were established by the South African Revenue Service (SARS) with the objective of obtaining information on certain types of transactions. The circumstances under which a person should report an arrangement to SARS, as defined in section 34 of the Tax Administration Act, 2011 (the TAA), are contained in sections 34 to 39 of the TAA.
Author: Eric Madumo, a Candidate Attorney and Joon Chong, a Partner at Webber Wentzel. In the recent case of CSARS v Char Trade, the Supreme Court of Appeal (SCA) that prescription begins to run against CSARS when a return for secondary tax on companies (STC) is submitted to SARS by a taxpayer. In the Char Trade case, a return for STC had not been submitted by the taxpayer. Due to this, prescription had not begun to run against CSARS. The result of this is that CSARS was able to make an assessment in 2012 of the taxpayer’s liability amounting to ZAR 1,812,609 for the 2007 cycle.