The South African Revenue Service (SARS) released Binding Private Ruling No 205 (Ruling) on 11 September 2015. The Ruling considers the meaning of ‘controlled group company’ and ‘equity share’. An approved venture capital company (VCC) in terms of section 12J of the Income Tax Act of 1962 (the Act), resident company A (Company A), and resident company B (Company B), proposed to incorporate a new company (RentalCo).
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Preservation orders – the court sets a high bar for SARS
In The Commissioner for the South African Revenue Service v Sunflower Distributors CC and Others (66077/2015) [2015] ZAGPPHC 896 (17 November 2015), the court had to decide whether a provisional preservation order granted in favour of the South African Revenue Service (SARS) should be made final. In this case, the ‘First Respondent’, Sunflower Distributors CC, was placed under a final winding-up order on 15 September 2015, after the provisional order was granted on 28 July 2015. The author of the SARS founding affidavit stated that the preservation order was applied for as an interim measure to preserve realisable assets until the final winding-up order is granted and until final liquidators have been appointed by the Master of the High Court, and them taking charge of the assets. The provisional preservation order was granted on 8 September 2015.
Ruling on third-party backed shares
Section 8EA of the Income Tax Act, No 58 of 1962 (Act) constitutes an anti-avoidance provision which, if applicable, has the effect that the amount of any dividend or foreign dividend received or accrued to the holder of a preference share, is deemed to be an amount of income as opposed to exempt income for tax purposes. In order for the provisions of s8EA of the Act to apply, the preference share in question must be regarded as a ‘third-party backed share’.
SARS Media Release: TAX RETURNS GIVE INSIGHT INTO ECONOMIC PERFORMANCE
Pretoria, 21 January 2016 – The National Treasury and South African Revenue Service will host a special workshop on the potential of tax administration records to provide insight into firm growth and performance, and hence economic growth. This will take place at the Linton House Auditorium at Brooklyn Bridge that houses SARS offices in Brooklyn, Pretoria from 9am. There is now a set of data for Corporate Income Tax (CIT), Personal Income Tax (PIT), Value-added Tax (VAT) and international trade spanning approximately six years that is being utilised for economic and policy research. The anonymous records hold information from more than 600 000 companies registered for various taxes. Some preliminary findings will be announced.
Gordhan’s SARS move in the nick of time
Author: Financial Mail The reappointment of Pravin Gordhan as finance minister has been welcomed, going some way to ease market jitters caused by President Jacob Zuma’s axing of Nhlanhla Nene. Gordhan’s appointment was, however, less well received in the executive corridors of the SA Revenue Service (SARS). This is predictable, considering that commissioner Tom Moyane, appointed by Zuma at the end of 2014, quickly took it upon himself to systematically unravel the work done by Gordhan during his own tenure at SARS.
SAA Airbus swap deal goes Nene’s way Agency Staff | 22 December, 2015 07:08 SAA informed the Treasury that the board approved the execution of the transaction as directed and a process is underway to conclude it within the next few days, Treasury said in a statement late on Monday. File photo Image by: Gallo Images/foto24/Yunus Mohame South African Airways (SAA) chairperson Dudu Myeni has officially lost her battle to reconfigure the airline’s Airbus swap deal, which could have threatened the financial stability of SAA. Save & Share Tweet Email Print Related News The secret memo SAA did not want you to see The secret memo SAA did not want you to see SAA, media slug it out in court SAA, media slug it out in court SAA pilots won’t be intimidated by claims of sabotage against black colleagues SAA pilots won’t be intimidated by claims of sabotage against black colleagues SAA on gag order: Publication doesn’t waive privilege SAA on gag order: Publication doesn’t waive privilege SAA clips media’s wings on leaked Mpshe memo SAA clips media’s wings on leaked Mpshe memo Sticking to former minister Nhlanhla Nene’s approved plan from July this year, the transaction will see SAA swap the purchase of ten A320 aircraft for a lease of five A330-300 aircraft from Airbus. The implementation of the deal in this manner will mean that SAA will no longer be required to pay additional pre-delivery payments to Airbus, which would have amounted to about R603m. The SAA board conceded defeat to Treasury on Monday after Finance Minister Pravin Gordhan directed it to conclude the swap transaction with Airbus in line with approval granted by Nene. After his appointment, Gordhan gave SAA an opportunity to make further representation, following which he decided that the airline must go ahead with executing the A320/A330 swap as had been approved by Nene, Treasury said. Treasury in contact with Airbus Treasury has also been in direct contact with Airbus to ensure that all the required actions are executed smoothly to conclude the deal, it said on Monday. “Airbus has indicated that they are amenable to the implementation of the transaction and have required that all legal documentation be in place by 28 December 2015,” said Treasury. “The National Treasury will work closely with Airbus and SAA to finalise the swap transaction.” “Also, as the airline takes delivery of each of the A330s, the pre-delivery payments that have already been paid, which total just more than $100m, will be refunded by Airbus. “SAA will not be required to recognise impairments, as it will no longer be acquiring aircraft. It had been estimated that such impairments could have totalled in excess of R1bn.” “The implementation of the transaction will therefore improve the airline’s financial position by alleviating the cash flow pressure and improving its profitability. Further measures will be taken next year to stabilise the airline,” Treasury said. Fallout from Airbus deal Nene fell out with Myeni over the deal, with the former minister adamant that the deal continue as approved in July. Myeni and the SAA board wanted to amend the transaction to allow SAA to purchase the A330-300 aircraft and enter into a sale and lease back deal with a local lessor/s. Having studied SAA’s proposal on the matter, Nene told SAA on December 3 to implement the transaction structure in line with the approval that had already been granted. The SAA board allegedly ignored this request and on December 9, President Jacob Zuma – Myeni’s close friend – fired Nene and replaced him with the somewhat unknown MP David van Rooyen. Four days later, that changed too, with Gordhan rescuing Zuma from an economic crisis. The Airbus deal was the first major test for Gordhan since returning to Treasury last week.
SAA informed the Treasury that the board approved the execution of the transaction as directed and a process is underway to conclude it within the next few days, Treasury said in a statement late on Monday. South African Airways (SAA) chairperson Dudu Myeni has officially lost her battle to reconfigure the airline’s Airbus swap deal, which could have threatened the financial stability of SAA.
David who? SA has new finance minister
Author: Mike Cohen and Rene Vollgraaff. Cape Town – If the appointment of South Africa’s new finance minister has alarmed investors, it may be because they’ve never heard of him. The rand plunged late on Wednesday after President Jacob Zuma announced that ruling party lawmaker David van Rooyen will replace Nhlanhla Nene, who held the post for less than two years. The currency fell as much as 5.4 percent against the dollar, hitting a record low of 15.3857. “I know nothing about the new man,” George Herman, head of South African investments at Cape Town-based Citadel Investment Services, said by phone. “I’ve never heard of him or dealt with him before. The markets are not going to like this.”
Meet David van Rooyen: The man who must fill Nene’s shoes
Cape Town – David Douglas Des van Rooyen, the man President Jacob Zuma named as Finance Minister Nhlanhla Nene’s successor in a shock announcement on Wednesday, has been described by economists as largely unknown, with little policy experience. But according to the ANC Van Rooyen holds a string of qualifications and has held a number of leadership positions in the ANC from 1994 to 2007. Prior to this he was an MK operative and soldier, and held various leadership positions in Cosas and Khutsong Student Congress. He was also a UDF representative and NUM member.
David van Rooyen the new finance minister
Johannesburg – President Jacob Zuma replaced Finance Minister Nhlanhla Nene with ANC MP David van Rooyen on Wednesday night. Van Rooyen is the whip of the standing committee on finance and whip of the economic transformation cluster. He was a former Umkhonto we Sizwe operative in the 1980s and has held a number of leadership positions in the ANC from 1994 to 2007. Van Rooyen is a former executive mayor of Merafong Municipality and a former North West provincial chairperson of the South African Local Government Association. He has an advance Business Management Diploma, a Diploma in Municipal Governance, a certificate in Municipal Governance, a certificate in Councillor Development, a certificate in Municipal Finance, a certificate in Economic and Public Finance and a Masters Degree in Public Development and Management.
Rand dives after Nene removal
Cape Town – The rand plummeted against major international currencies on Wednesday evening shortly after President Jacob Zuma removed Nhlanhla Nene as finance minister. By 21:20 the rand was trading at R16.34 to the euro, down 2.74%, and R22.5 against the pound, down 2.5%. The rand was down 1.39% against the greenback at R14.83/$. Zuma announced late on Wednesday the removal of Nene from the Finance Portfolio in Cabinet, saying Nene had been removed ahead of his “deployment to another strategic position”. Zuma has appointed ANC member of parliament, David van Rooyen, as the new Minister of Finance.