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Author: Candice Gibson (Senior Associate at Cliffe Dekker Hofmeyr). On 6 April 2018, the South African Revenue Service (SARS) announced that it will continue to apply normal income tax rules to cryptocurrencies and will expect affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income.

Authors: Heinrich Louw and Louise Kotze (Cliffe Dekker Hofmeyr). Where a taxpayer is dissatisfied with the decision taken by the South African Revenue Services (SARS) regarding an objection made by the taxpayer to an assessment, the taxpayer is entitled to appeal against such decision to the Tax Court. The Rules of the Tax Court, promulgated under s103 of the Tax Administration Act, No 28 of 2011 (TAA), prescribe the procedure to be followed when proceedings are instituted in the Tax Court.

The final reports can be downloaded below: 20180329 DTC Closing Report(2) 20180417 BD Article on DTC wealth tax report 20180412 DTC Note on Territorial Taxation 20180412 DTC Media Statement – 4 Reports, Closing 20180412 Article on residence and source taxation 20180411 Final DTC CIT Report – to Minister 20180329 Final DTC Wealth Tax Report – To Minister 20180329 Final DTC VAT Report to the Minister 20180329 Final DTC PBO Report to the Minister 20180329 DTC Closing Report(2)

Authors: Joon Chong, Partner and Karen Miller, Consultant – Webber Wentzel. Malusi Gigaba stated in the Budget Review 2018 (Budget) that: “The deductibility of interest payments on debt acts as an incentive to use debt rather than equity funding, and can be used to strip profits from high tax countries.” He goes further by stating that “[a] discussion document inviting comments will soon be published to facilitate public consultation”. This is a welcome development as it is approximately five years since the South African Revenue Service (SARS) issued its draft interpretation note (IN) into acceptable levels of debt. Taxpayers and foreign investors will therefore welcome the prospect of getting closer to greater clarification on what constitutes an arm’s length acceptable level of debt and interest rate.

The Supreme Court of Appeal recently delivered two pertinent judgments dealing with the issue of prescription in respect of immovable property claims. Read together, these decisions send a clear message to holders of real rights ostensibly created via registration of a mortgage bond or title deed conditions: Do not assume the luxury of an extended period within which such rights may be enforced.

Author: Alexa Muller (Tax Associate at ENSAfrica). In terms of the South African Income Tax Act, 1962 (the Act), distributions received by or accrued to a shareholder of a company may constitute either a dividend or a return of capital each of which would give rise to different tax implications for the shareholder or company concerned. The term dividend, as defined in section 1 of the Act, excludes, inter alia, an amount distributed to the extent that the amount results in a reduction of the contributed tax capital of the company making the distribution. A return of capital, as defined in section 1 of the Act, means any amount transferred by a South African tax resident company for the benefit for or on behalf of any person in respect of any share in that company to the extent that that transfer results in a reduction of contributed tax capital of Read More …

Author: Magda Snyckers (Tax Director at ENSafrica). Before 1 April 2015, hedge funds were unregulated and were constituted (broadly speaking) as limited liability partnerships or trusts. For tax purposes, these structures functioned as flow-through entities with investors being responsible for the disclosure and payment of tax resulting from investment activities. As such, fund managers were not typically involved in the disclosure of and accounting for the tax resulting from investment activities.

Before we delve into the first Customs and Excise instalment of 2017, we would like to wish you a happy and prosperous new year. Without further ado, please find the selected highlights from the Customs and Excise environment below: FTW reported that SARS aims to launch the new customs legislation during the first half of 2017. The process is planned to be phased in over a two year period and will commence with the registration, licensing and accreditation process, of which the first deliverable will be Customs Sufficient Knowledge. We remind readers that all current registration and licenses will have to be re-applied for under the new legislation. We will use this Alert to advise you as to when the process will commence. Should you wish us to inform you of the commencement via email, please send a request to petr.erasmus@cdhlegal.com. Naturally, we remain available to assist with such re-registration Read More …

Membership based organisations are fundamental to the sustainability and development of the economy of South Africa as they provide vital industry and professional support services to a wide range of important occupations and trades ranging from accountants, lawyers and doctors to artisans and engineers. The majority of these organisations operate on a non-profit basis for the benefit of their members and ultimately play an important role in increasing employment in South Africa and uplifting poor communities.