Tax- Provisional tax relief
Thanks to vigorous submissions by several organisations, recent amendments to the Income Tax Act have ameliorated the draconian and totally unrealistic provisions introduced last year relating to the second provisional payment. At the same time, the exemption of several classes of taxpayers from the need to register as taxpayers is to be welcomed.
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- PwC supports proposed reduced regulatory tax reforms
The medium-term budget statement presented by the South African Finance Minister Pravin Gordhan on 27 October 2009 indicated that the tax revenue is sharply lower than expected this year due to the effect of the global economic downturn on taxpayers in the country. Gordhan also reminded South Africans about the sterner administrative penalties implemented by SARS and the repercussions of those with outstanding tax returns.
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- Permanent Establishment Considerations
Parties entering into cross-border transactions must consider the possibility of the transaction giving rise to a permanent establishment for either party, with an eye to avoiding this problem where possible. Under most international Double Tax Agreements, where a permanent establishment exists, the country in which the permanent establishment is situated will have the right to tax any business profits which are attributable to that permanent establishment.
View all articles from October Technews 2009 Issue 2
- Treatment Of Unrealised Gains On Death
Death is a capital gains tax event. In terms of the relevant provisions of the 8th Schedule of the Income Tax Act, a deceased person is deemed to have disposed of all of his or her assets to the deceased estate for proceeds equal to the market value of the assets as at the date of death. The exception to this is for assets transferred to a spouse, assets consisting of certain domestic life insurance policies (the proceeds of which would have been exempt if paid to the deceased) and certain retirement savings. Accordingly, death triggers a capital gain or loss for the deceased person which must be recorded in that person's final tax return.
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- VAT – Foreign currency
Section 20 of the Value-Added Tax Act requires a registered vendor, making a taxable supply, to issue a tax invoice within 21 days of the date of that supply. The tax invoice “…shall be in the currency of the Republic...”, except where the supply is zero-rated. The Vendor is allowed to issue a tax invoice expressing another currency as long as the Rand value is also indicated on the tax invoice. However, payment may be received in another currency.
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- Allowances: what, when and how much?
One of the most contentious areas of individual's tax is that of allowances. In this article we cover the most common questions that are raised: when should someone be paid an allowance, how much should the allowance be, how is it taxed and what tax relief can the person claim against it. In the course of the discussion we'll refer to the Income Tax Act provisions and also to the SARS Interpretation Note No. 14 (Issue 2 - 2008).
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- New Dividends Withholding Tax
As our country's' economy catches its breath following the hosting of the 2010 World Cup, South African taxpayers ought to prepare themselves for a significant change to our tax legislation, in the form of Dividends Tax, expected to be implemented towards the end of 2010. We have prepared a series of articles on this topic aiming to highlight and address key issues which you, as the client, need to be aware of as we draw closer to its implementation.
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- Complexities of CGT still challenge SA taxpayers
“Although capital gains tax (CGT) was introduced in South Africa with effect from 1 October 2001, it remains a complex tax, difficult to apply in practice. Despite us being nearly eight years into implementation of the Eighth Schedule to the Income Tax Act, taxpayers, both individuals and corporate, are still battling with what was intended to be simple and clear, yet technically correct provisions. However, CGT is internationally known to be an extremely complex tax and the situation is no different in SA” says Sizwe Ngwenya, Corporate Tax Consultant at PricewaterhouseCoopers SA. “Many taxpayers will be grappling with its application, perhaps for the first time, as the individual tax filing season started on 1 July 2009.”
View all articles from Technews August 2009
- Provisional tax estimates
Provisional taxpayers are required to make two compulsory provisional tax payments during the year. In addition, provision for a third voluntary payment is also made. Every provisional taxpayer is required to submit an “estimate” to the South African Revenue Services (SARS) of the total taxable income which will be derived by the taxpayer in the year of assessment in respect of which provisional tax is payable as part of the taxpayer's provisional tax filing obligations.
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- Article on Turn Over Tax and request for more member articles
SAIPA Technical and Standards Department recently issued a survey on members experience with Turn Over Tax. As a result of that survey one of our members, Mr. Frikkie Strauss provided us with an article on the pros and cons of turn over tax.
SAIPA Technical and Standards Department would like to receive similar articles from our members so that we can share information and opinion amongst members.
If you have written or decided to write an article of relevance and would like to share it; please send the article to anaino@saipa.co.za and give permission to publish in writing. Articles can be about anything related to the profession.
View all articles from Technews - Volume 4 Issue 4
- Technical department special report on the budget 09/10
The technical department has created a special budget report for SAIPA members. This special budget report site is powered by SAIPA. The website provides a broad overview of the Budget. Included in this website is the: budget speech by minister Trevor Manual, the SAIPA tax guide, budget coverage by business day, eye witness news, News24, and VIP articles on the budget. It also includes a weekly budget analysis. New articles will be added to this analysis section on a weekly basis for the next 3 months. To access the budget special report click here. We have created the website in such a fashion that you can personalize it with your firm's logo. You will then be able to forward the link to the website to all your clients. If you want to find out how you can personalize the site click here…
View all articles from TechNews - Volume 4 Issue 1
- Lessons from 2008 filing season: Join the survey and get the results
In 2007, SARS made significant enhancements and introduced a number of changes to the filing process, and to the electronic channels with the aim of providing simpler better services to both the taxpayer and tax practitioner. This year SARS made further changes… so what are SAIPA tax practitioners doing to keep abreast of all the new SARS developments introduced for 2008? A survey was developed so as to determine the lessons that could be learned from filing season 2008.
View all articles from Technews - Volume 3 Issue 7
- Order your SAIPA tax guide 2008/9 today!
With the launch of tax season 2008 for employers and individuals, the Technical department has created an easy reference pocket-sized SAIPA Tax Guide of the South African Tax System which incorporates announcements that were made in the Budget Speech delivered on 20 February 2008. This tax pocket guide will be an invaluable tool for all professional accountants to use as a quick reference guide...
View all articles from Technews - Volume 3 Issue 4
- Increase in compulsory VAT registration threshold
Enquiries to SAIPA indicate that there is some uncertainty about whether the increase has been implemented already or not...
The 2008 Budget Review announced that; "The introduction of the simplified tax package for very small businesses with an annual turnover below R1 million will provide scope to increase the compulsory VAT registration threshold. It is proposed that this threshold be increased from an annual turnover of R300 000 to R1 million."
View all articles from Technews - Volume 3 Issue 4
- The Tax Practitioner
The technical department is pleased to announce that the latest issue of The Tax Practitioner is now available. This months issue covers the following topics:
• STC on intra-group dividends
• VAT (Budget 2008)
• Advising clients on the new turnover-based tax on small businesses
• Personal Service Companies and Trusts (Part 2)
• New reportable arrangements rules
• UIF Overpayments
• IRP501 return and the issuing of IRP5 and IT3(a) certificates...
View all articles from Technews - Volume 3 Issue 4
- Income Tax: Reportable Arrangements
South Africa's reportable arrangements legislation came into force in 2005 and provided for the reporting of two classes of arrangement. The first related to arrangements that resulted in a tax benefit and were subject to an agreement that provided for the variation of interest, fees, etc. if their actual tax benefits differed from the anticipated tax benefits. The second related to certain hybrid debt and equity instruments. The legislation was intended to give the South African Revenue Service (SARS) early warning of arrangements that were potentially tax driven. SARS would then be in a position to take appropriate action to counter abuse more quickly than would otherwise have been the case.
Following extended consultations with key commentators on the legislation, the new reportable arrangements legislation contained in section 80M to 80T of the Income Tax Act, 1962, was brought into force on 1 April 2008. SAIPA Your Law Volume 3 Issue 7 pages 20, 21 & 22 contain the new legislation arrangements which commenced on 01 April 2008.
View all articles from TechNews - Volume 3 Issue 3
- Order Tax Guides Online
The Technical department of SAIPA has created an easy reference pocket-sized SAIPA Tax Guide of the South African Tax System which incorporates announcements that were made in the Budget Speech delivered on 20 February 2008. This tax pocket guide will be an invaluable tool for all professional accountants to use as a quick reference guide.
A complimentary copy of the SAIPA Tax Guide 2008/2009 will be inserted with the March/April issue of the Professional Accountant Magazine compliments of the Technical Department. Additional copies of the SAIPA Tax Guide 2008/2009 are available for ordering via the website.
View all articles from TechNews - Volume 3 Issue 2
- Compensation fund extends deadline
Employers have until April 30 2008 to submit their 2007 Return of Earnings forms, the Labour Department's Compensation Fund announced on April 1 2008. This was in response to a request for such extension by the Technical Committee of the South African Institute of Professional Accountants.
The submission was made to the fund based on information received from SAIPA's North West Regional Committee, mainly around the fact that the Was.08 returns were not available for completion.
SAIPA had managed to secure this extension as a result of communications between the professional body and the Compensation Fund. Although SAIPA had informed its members that such extension was forthcoming, they requested that confirmation be obtained from the fund itself as an official notice had not as yet been issued.
According to the fund, official notification would be communicated to all stakeholders via the media. A media release was issued by the Department of Labour on April 1, 2008.
Explaining the deadline extension, Department of Labour spokesperson Zolisa Sigabi said that the Compensation Commissioner's decision was in line with the Fund's approach of partnering clients to ensure strict adherence to the law, which requires employers to submit the Returns each year...
View all articles from TechNews - Volume 3 Issue 2
- Penalty Guide On The Late Submission of 2007 Tax Returns
The Technical Department in consultation with a Tax Specialist, has prepared a penalty guide on the late submission of 2007 tax returns.
The purpose of this guide is primarily to give guidance to members and associates on the procedures to be followed in objecting to penalties levied by SARS for the late submission of 2007 tax returns.
The main procedures to be followed in objecting to penalties levied by SARS are summarised in the guide but it does not cover all the administrative details. The guide therefore, is merely a procedural guideline for SAIPA Tax Practitioners to follow...
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- SARS grants further extension for the submission of 2007 IT returns
The SAIPA technical department, supported by the technical committee met with SARS on numerous occasions to discuss the further extension for the submission of 2007 IT returns. Subsequently two written submissions were drafted and presented to SARS explaining the challenges faced by SAIPA members with regards to e-filing and compliance with the 2007 extension deadlines. The first submission was made on the 29 October 2007, and the second on the 24 January 2008. The latter submission was a joint submission with SAICA...
View all articles from TechNews - Volume 3 Issue 1
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