Authors: Robert Gad, Anneke Meiring and Jadyne Devnarain The purpose of the Tax Administration Act No. 28 of 2011 (“the TAA”), is to ensure the effective and efficient collection of tax, by aligning the administration of the tax Acts to the extent practically possible, prescribing the rights and obligations of taxpayers and other persons to whom the TAA applies, prescribing the powers and duties of persons engaged in the administration of a tax Act, and generally giving effect to the objects and purposes of tax administration.
Category: Taxation Laws Amendments
South African tax legislation: proposed amendments in an international tax context
Authors: Lavina Daya and Yani van der Merwe and Liesl Visser This article sets out a brief summary of some of the proposed amendments introduced by recent South African draft Tax Bills. The article focuses on amendments in the context of international taxation. The draft Taxation Laws Amendment Bill, 2015 (“draft TLAB”) and the draft Tax Administration Laws Amendment Bill, 2015 (“draft TALAB”) were released by National Treasury on July 22, 2015. These draft Bills aim to provide the necessary legislative amendments required to implement most of the tax proposals outlined in the 2015 Budget Review. Specifically, the draft TLAB deals with more substantive changes to tax legislation and the draft TALAB deals with administrative provisions of tax legislation currently administered by the South African Revenue Service (“SARS”). We consider proposed amendments in an international tax context below.
New tax changes mean new tax schemes
Consumers and businesses by now have had a few months to assess the impact of tax changes indicated by the Finance Minister in his most recent Budget Speech. ‘’Be wary though that with these changes also come charlatans who pounce on uninformed business owners and individuals with offers ranging from sophisticated tax avoidance schemes to offers of services or products to ensure compliance,” warns BDO Pretoria Consultant and ex-Managing Partner, Roy Edge. “This is nothing new, we see it all the time where individuals or groups lure unsuspecting people into parting with hard-earned money by investing in new and creative tax schemes.”
Proposed amendments to the Tax Administration Act No. 28 of 2011 in relation to legal privilege
Authors: Robert Gad and Megan McCormack (ENSafrica) The draft Tax Administration Laws Amendment Bill of 2015 (“TALAB”), published for public comment on 22 July 2015, proposes the introduction of a new section 42A into the Tax Administration Act No. 28 of 2011 (“TAA”), dealing with the procedures to be followed where legal professional privilege (“Privilege”) is asserted by a taxpayer. These procedures are particularly onerous on the taxpayer and may result in undue delays in the tax dispute resolution process, particularly in relation to discovery proceedings.
New tax changes mean new tax schemes
Consumers and businesses by now have had a few months to assess the impact of tax changes indicated by the Finance Minister in his most recent Budget Speech. “Be wary though that with these changes also come charlatans who pounce on uninformed business owners and individuals with offers ranging from sophisticated tax avoidance schemes to offers of products or services to ensure compliance,” warns BDO Pretoria Consultant and ex-Managing Partner, Roy Edge. “This is nothing new, we see it all the time where individuals or groups lure unsuspecting people into parting with hard-earned money by investing in new and creative tax schemes.”
Proposed updates to the existing customs legislation
The major talking point within the South African Customs environment was the recent promulgation of the Customs Control Act, 2014 and Customs Duty Act, 2014 (“the Acts”) by parliament. There remains a lot of work outstanding before the Acts can be fully implemented and SARS are currently conducting extensive work surrounding the drafting of the Rules to the Acts and have published several batches for comment. The first phase of implementation is expected to “go live” in 2016 and will deal with Registration and Licensing. In terms of Section 931 and 933 of the Customs Control Act, an existing customs license and registration lapses 30 days after the “effective date”, unless the holder of that registration before the expiry thereof has submitted an application to the customs authority for a new registration. If the holder of the customs registration or license applies for a new license before the expiry, then the existing registration and license will continue until dispensed with. The “effective Read More …
Reduced tax assessments proposal only applicable for exceptional cases
Author: Erich Bell, Senior Tax Consultant at BDO SA Johannesburg, xx August 2015 – The 2015 Tax Administration Laws Amendment Bill (TALAB) proposes to amend the provisions regarding reduced assessments in the Tax Administration Act (TAA). If promulgated, this would affect taxpayers by reducing the time allowed for them to to request reduced assessments through the so-called ‘request for correction’ function on SARS’ eFiling to six months from date of assessment. A possible further six months’ extension could be granted in exceptional circumstances.
A review of section 6quin
Author: Pieter van der Zwan (NWU) Pieter van der Zwan revisits the economic reasons for the introduction of section 6quin. Section 6quin was introduced into the Income Tax Act by the 2011 Taxation Laws Amendment Act as a measure to enable entities to provide services into Africa in a manner that such services were commercially viable. With the section having been in effect for more than 3 years now, it was indicated in the 2015 Budget Review that the concession contained in section 6quin would be withdrawn due to the significant compliance burden that it places on SARS and taxpayers as well as the fact that it is being exploited by some taxpayers.
Improved tax allowance for photo voltaic power plants
The 2015 Taxation Laws Amendment Bill (TLAB) proposes an amendment to s12B of the Income Tax Act, No 58 of 1962 (Act) in respect of the accelerated tax allowance available to photo voltaic (PV) power plants. The proposal, which comes into operation on 1 January 2016, allows for a 100% accelerated tax allowance in respect of embedded PV power plants, generating up to 1MW for self-consumption. As a general principle and provided the requirements of s12B of the Act are met, a taxpayer is permitted to deduct the cost of qualifying assets (including structures of a permanent nature), used in the generation of electricity from renewable resources, on a 50 / 30 / 20 basis (ie over a three year period). As s12B of the Act currently stands, solar power is classified as a single concept without distinguishing between the sub-categories of photo voltaic and concentrated solar power (CSP). The Read More …
Scope of capital gains tax liability broadened
In order to provide the necessary legislative amendments required to implement the tax proposals that were announced in the 2015 National Budget on 25 February 2015, the National Treasury published the Draft Taxation Laws Amendment Bill (TLAB), 2015, on 22 July 2015 for public comment. One of the proposed amendments relates to the definition of ‘immovable property’ as provided in paragraph 2 of the Eighth Schedule to the Income Tax Act, No 58 of 1862 (Act).