Covid-19: TERS – 5 important updates

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.

Covid-19: How to manage ‘place of effective management’ tax risk during lockdown

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?

SARS and the fiscus may benefit when executives have to pay back

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.

Venture capital companies and trades in respect of immovable property

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.

Tax clearance certificates and tax compliance status: Changes on the tax and exchange control fronts

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.

Reportable arrangement: proposed reporting burden on mining companies and rehabilitation trusts

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.

SARS prescription only starts once tax return has been submitted

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.

Tax non-compliance status may be inaccurate

Authors: Joon Chong, a Tax Partner, Nina Keyser, a Tax Partner, Nirvasha Singh, a Tax Partner & Carryn Alexander, an Associate at Webber Wentzel. SARS replaced the Tax Clearance Certificate (TCC) system with the enhanced Tax Compliance Status (TCS) system on eFiling in April 2016. The new TCS system is aimed at improving tax compliance as taxpayers can better manage their TCS and remedy any non-compliance through the “My Compliance Profile” (MCP) function on eFiling.

Urgent reinstatement of tax compliance status granted

Author: Joon Chong, Tax Partner at Webber Wentzel. For certain taxpayers, a tax clearance certificate is of utmost importance in ensuring that it is able to receive payment and to tender for new services. In the recent Gauteng High Court decision (Red Ant Security Relocation and Eviction Services (Pty) Ltd v CSARS (2999/18)), the taxpayer applied for urgent interdictory relief for reinstatement of its tax compliance status in order to be able to generate a tax clearance certificate pending determination of review proceedings which it had instituted against CSARS.

SARS – Customs requirements for South African travellers

The South African Revenue Service (SARS) would like to clarify a recent confusion in the media about Customs requirements for travellers returning to South Africa with personal valuables. In terms of Customs legislation, South African residents travelling abroad are not required to declare their personal effects when leaving the country, nor upon return. Personal effects is defined in legislation as including items such as personal laptops, iPads, cellphones, golf clubs, cameras and/or other high value items forming part of the travellers possessions when leaving the country.