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Tax on foreign employment income likely to change

It is common practice in many multinational organisations for employees to render services in more than one country. In the case of South African tax residents working abroad on long-term assignments, the recent announcement in the 2013 budget regarding proposed changes to the foreign earnings exemption may potentially affect their South African tax liability in relation to foreign-earned remuneration.

SARS catching up with the Mpisanes

The SA Revenue Service (SARS) has been granted permission to seize five properties belonging to Shauwn and Sbu Mpisane, it was reported.Mpisane’s firm had history with tax returns Mpisane’s firm had history with tax returns. Mpisane lawyers accuse prosecution of suppressing information Mpisane lawyers accuse prosecution of suppressing information The five properties were in a trust which would be held by SARS pending the outcome of an ongoing investigation into the couple’s business and personal financial affairs, The Mercury reported.

Draft Interpretation Note: Deduction of expenditure incurred on repairs

SARS recently published Draft Interpretation Note on in which it seeks to provide guidance on the interpretation and application of section 11(d) which allows a deduction for expenditure incurred on repairs for the purposes of trade. Expenditure on repairs to an asset not comprising trading stock is likely to be of a capital nature, particularly when it is not incurred at regular intervals.

Draft Interpretation Note: determining a 'group of companies' for purposes of the corporate rules

This Draft Note when published as final one will provides guidance on the interaction of the definitions of a “group of companies” contained in sections 1(1) and 41(1). The corporate rules contain, amongst other things, special provisions relating to the income tax consequences (including capital gains tax consequences) of transactions between companies forming part of a “group of companies”. Under qualifying circumstances, the corporate rules make it possible for companies in such a group of companies to transfer assets between each other without adverse tax consequences.

Draft Interpretation Note : Treatment of Tips

Over the years tax implications on tips received by waiters had always been a grey area, SARS published a draft note that discusses and clarifies the potential income tax, SDL and UIF implications in respect of the receipt of tips encountered in (but not limited to) the service industry. The Note will focus on a “tripartite” tipping relationship between the following three parties: The patron, The recipient and The owner.

PwC 2013 Tax Budget Comments

PwC 2013 Tax Budget Comments Personal Income Tax Higher income tax earners will have R231,25 less income tax to pay per month, assuming they have a basic annual taxable income of R700,000. Lower income tax earners will pay R86 less income tax annually, assuming they have an annual basic taxable income of R165, 600.The individual threshold for submitting a tax return was raised from R120,000 to R250,000 per year. This means that taxpayers that have taxable income of less than R250,000 annually will not be required to submit tax returns.

What are the steps in calculating the income tax owed?

What are the steps in calculating the income tax owed? The Income Tax Act No. 58 of 1962 sets out a series of steps to be followed in calculating a taxpayer’s “taxable income”. This then forms the foundation on which tax liability is calculated. These steps are briefly set out below and are tackled in greater detail in the explanations that follow. 1. Determine gross income