Author: Ingé Lamprecht (Moneyweb). President Jacob Zuma has moved to calm the waters after the Congress of South African Trade Unions (Cosatu) demanded that the new regulations that will compel provident fund members to annuitise be scrapped. Zuma signed the Tax Administration Laws Amendment Act and the Taxation Laws Amendment Act into law earlier this month. The regulations, which will harmonise the taxation of contributions to pension funds, retirement annuities and provident funds, will take effect on March 1.
Category: Taxation Laws Amendments
SARS explains 2015 Tax Administration Amendments
Author: Lorys Charalambous (Tax-News.com) On December 17, the South African Revenue Service (SARS) issued an explanatory memorandum on the 2015 Tax Administration Laws Amendment Bill (TALAB). In particular, the memorandum looks at the TALAB provisions giving effect to the collection of information from South African financial institutions (FIs), and the associated obligation on the FIs to register with SARS regarding the Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement (IGA) with the United States that was signed in July last year.
Changes that are Likely to Impact your Payroll
The much-anticipated legislation to give effect to the tax harmonisation reforms of retirement funds has finally been signed into law by the President. The changes will be implemented with effect from 1 March 2016, as was anticipated prior the official publication of the legislation in the Government Gazette on 8 January 2016. Below is a short summary highlighting certain aspects of the changes:
Treasury forges ahead with retirement reform – Tax harmonisation of retirement funds to be implemented March 1, 2016
Author: Ingé Lamprecht (Moneyweb). Tax harmonisation of retirement funds to be implemented March 1, 2016. JOHANNESBURG – National Treasury has confirmed that regulations to harmonise the taxation of contributions to pension funds, retirement annuities and provident funds will take effect on March 1 next year. This means that provident fund members will only be able to take one third of their pension benefit as a cash lump sum at retirement and that the remaining two thirds will have to be annuitised. However, this will only apply to contributions made after March 1, 2016 and for those below 55 years of age. Moreover, members will only be required to annuitise once their retirement savings exceed an increased amount of R247 500. The previously proposed threshold was R150 000.
Tax changes for retirement funds to be implemented from 2016
The tax harmonisation reforms for retirement funds will be implemented from 1 March 2016‚ the Treasury says. “This is in terms of the current law legislated in 2013‚ and amended in 2014 by shifting the effective date to 1 March 2016 (ie the Taxation Laws Amendment Act‚ No 39 of 2013‚ as amended by Act No 43 of 2014). The 2015 Taxation Laws Amendment Bill did not amend the scheduled implementation date‚ “but only amends the R150‚000 de minimis threshold to R247‚500; closes certain coverage gaps; and requires a review of the legislation after two years from the effective date‚ and to report this review to Parliament”‚ the Treasury said.
Proposed extension of existing prescription periods (section 99 of the Tax Administration Act)
Author: Mareli Treurnicht (Cliffe Dekker Hofmeyr). Section 99 of the Tax Administration Act, No 28 of 2011 (TAA) prescribes the period of limitations (ie prescription) for the issuance of assessments. Section 99 currently states that the South African Revenue Service (SARS) may not make an assessment in terms of Chapter 8 of the TAA, inter alia: three years after the date of assessment of an original assessment by SARS; (in the case of self-assessment for which a return is required) five years after the date of assessment of an original assessment by way of self-assessment by the taxpayer or, if no return is received, by SARS; or (in the case of a self-assessment for which no return is required) after the expiration of five years from either the date of the last payment of the tax for the tax period or the effective date, if no payment was made in respect Read More …
Corrections of tax assessments – what is readily apparent to SARS?
Author: David Warneke Director and Head of Tax Technical at BDO South Africa. The latest version of the Tax Administration Laws Amendment Bill of 2015, which is likely to be promulgated in its current form, proposes that in future SARS will not be permitted to entertain so-called ‘requests for correction’ of tax assessments, except if SARS is satisfied that there is a (currently undefined) ‘readily apparent’ undisputed error in the assessment. In my view, it is likely that taxpayers will be severely prejudiced by this amendment. What is ‘readily apparent’ to one person may not be so to another. The number of cases in which SARS is likely to grant requests for corrections is likely to drop dramatically and a lack of consistency in interpretation between SARS’ assessors may be taken as a given.
Notable reduction in employee’s take-home pay rectified in latest version of tax bill
The removal of a few words in the latest version of the Taxation Laws Amendment Bill, 2015, appears to have rectified a loophole contained in an earlier version of the Bill that would have resulted in a notable reduction in an employee’s take-home pay if they belonged to a retirement fund.
Draft Carbon Tax Bill for public comment
Author: National Treasury The National Treasury has publishes the Draft Carbon Tax Bill for public comment. Briefly, the carbon tax seeks to price carbon by obliging the polluter to internalise the external costs of emitting carbon, and contribute towards addressing the harm caused by such pollution. The publication of the Draft Carbon Tax Bill provides an opportunity for further comments on the design and technical details of the carbon tax policy and administration. Written comments should be submitted by the close of business on 15 December 2015 to Dr. Memory Machingambi, email: Memory.Machingambi@treasury.gov.za Please click here to view media statement, Draft Carbon Tax Bill for comment and Draft Explanatory Memorandum on the Carbon Tax Draft Bill
‘Interest’ for purposes of Withholding Tax on Interest (WTI)
Author: Lisa Brunton (Cliffe Dekker Hofmeyr). The Taxation Laws Amendment Bill 2015 (Bill) proposes the insertion of a definition for the term ‘interest’ in s50A of the Income Tax Act, No 58 of 1962 (Act) to clarify the meaning of interest for purposes of the WTI. ‘Interest’ is to be defined in s50A of the Act with reference to paragraphs (a) and (b) of the definition of ‘interest’ under s24J(1), meaning that for WTI purposes, ‘interest’ includes “the gross amount of any interest or related finance charges, discount or premium payable or receivable in terms of or in respect of a financial instrument;” or “the amount (or portion thereof) payable by the borrower to a lender in terms of a lending arrangement as represents compensation for any amount which the lender would, but for such lending arrangement, have been entitled”.