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.
Tag: Income tax
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.
Do your objections and appeals to Sars correctly
Do your objections and appeals to Sars correctly ..… or else it could become very costly. The taxpayer in H R Computek (Pty) Ltd v CSars (830/2011) [2012] ZASCA 178 learnt a painful and expensive lesson about the importance of adhering to the rules and provisions relating to objection and appeal. In particular, this judgement reminds taxpayers, not for the first time, that the grounds of your objection are extremely important because you are stuck with them all the way through the judicial process.
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.
MTN International (Mauritius) v CSARS – HC23203/11
JUDICIAL REVIEW AND RAISING ASSESSMENTS By Heinrich Louw, Cliffe Dikker Hofmeyr On 31 January 2013, judgment was handed down in the North Gauteng High Court in the case of MTN International (Mauritius) Limited v Commissioner for the South African Revenue Service (as yet unreported, case no 23203/11). The facts were briefly as follows. The taxpayer was a Mauritian company, registered as a taxpayer with the South African Revenue Service (SARS), and a subsidiary of a South African holding company. The taxpayer acquired various interests, notably in Nigeria and the Middle East, through loans obtained from its South African holding company.
UK Court decision on corporate tax residency
Written by: Justin Liebenberg, Director Cliffe Dekker Hofmeyr Tax A company incorporated outside South Africa can be tax resident here if its place of effective management (POEM) is located in South Africa. POEM is also often used as the tie-breaker to finally determine corporate tax residency under double tax agreements. A recent court decision in the UK sheds further light on POEM especially in the context of a double tax agreement.
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
Budget 2013 – Share Schemes
By Andrew Lewis (DLA Cliffe Dekker Hofmeyr) Executive summary Share incentive schemes were again mentioned in this year’s tax budget proposals. It thus appears that the broad-based employee share plan contemplated in s8B of the Income Tax Act will be reviewed and possibly merged with s8C of the Income Tax Act into a single employee share scheme regime.
SARS and your bank account
On 29 February 2012, the South African Revenue Service (SARS) issued a notice in Government Gazette No 35090 (Notice No 173) relating to the liability of certain institutions, most notably banks, to furnish SARS with financial information about taxpayers. The notice was issued in terms of s69 of the Income Tax Act, No 58 of 1962, which section has been superseded by s26 of the Tax Administration Act, No 28 of 2011 (TAA).
South Africa's New Tax Administration Act Is In Force
by Lorys Charalambous, Tax-News.com, Cyprus 04 October 2012 The South African Revenue Service (SARS) has announced that the Tax Administration Act (TAA), which is intended to simplify and provide greater coherence in South African tax administration law, and was promulgated on July 4, 2012, largely came into effect on October 1, 2012.