Tax

It is no secret that tax systems around the world are struggling to keep pace with the digitisation of commerce and South Africa too, after an initially pro-active stance towards taxing e-commerce, was arguably starting to fall behind in this 'new frontier for VAT'.

Multinationals with South African group companies are required to adhere to South Africa’s transfer pricing legislation as found in section 31 of the Income Tax Act, 58 of 1962, which provisions in very simple terms require cross-border transactions (which include loans) to be conducted on an arm’s length basis.

The Draft Taxation Laws Amendment Bill has proposed an amendment in order to address the tax leakage through a double dip in the claiming of the medical scheme fees tax credit.

A trend of increased delays and frustration with the South African Revenue Service’s (SARS’) dispute resolution process, are becoming apparent among taxpayers and tax practitioners alike.

In the recent case of CSARS v Char Trade, the Supreme Court of Appeal (SCA) that prescription begins to run against CSARS when a return for secondary tax on companies (STC) is submitted to SARS by a taxpayer.

A recent judgment handed down in the Pretoria High Court last month highlights SARS’s intransigence when applying certain aspects of the Tax Administration Act, 28 of 2011 (the TAA).

If filling in a tax return were an easy task, South African Revenue Service (SARS) would not have a page dedicated to How to complete your income tax return. When in doubt, turn to a professional for advice, but in the meantime here are some tips for a smooth tax return submission:

Treasury has proposed certain amendments to the Income Tax Act relating to the tax treatment of cryptocurrencies in the recently issued Draft Taxation Laws Amendment Bill (draft TLAB).

The South African Revenue Service (SARS) has created some nervousness in the South African tax base by embarking on an initiative to criminally prosecute taxpayers who fail to submit their tax returns. Whilst the threat of a criminal record and a fine ought to serve as sufficient incentive to submit one’s return, it is perhaps worth pointing out that submission of returns also gives taxpayers access to the Voluntary disclosure Programme (VDP), which affords acquittal from far more serious criminal sanctions.

On 1 October 2012 the understatement penalty regime was introduced to replace the additional tax regime. An understatement penalty is determined by applying the highest applicable percentage in the understatement penalty table.