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Saturday, June 23, 2018

Clarity on taxing of cryptocurrencies?

On 6 April 2018, the South African Revenue Service (SARS) announced that it will continue to apply normal income tax rules to cryptocurrencies and will expect affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income.

Tax morality and the CA(SA)

Globally, tax is making headlines with an increasing focus on tax avoidance or aggressive tax planning, to increase the revenue collection by governments. While specific anti-avoidance rules are already available, general anti-avoidance rules (GAARs) were adopted in South Africa and elsewhere, coupled with a greater focus on addressing base erosion and profit shifting.

Controlled Foreign Companies | proposed amendments

South Africa's tax legislation contains controlled foreign company (CFC) rules which aim to prevent South African taxpayers from locating companies in low tax jurisdictions in an effort to avoid paying South African tax.

The VAT increase and the sale of residential property

An increase in the Value Added Tax (VAT) rate to 15% will came into effect on 1 April 2018. Generally, the sale of residential property is subject to transfer duty, however, if a seller is a VAT vendor, such as a property developer, VAT may be payable. How will the VAT increase effect the sale of residential property, where a property is purchased before 1 April but transfer only occurs after the date of the increase?

Taxing cryptocurrency transactions

In South Africa, as with most other countries around the world, there is no guidance and regulation regarding cryptocurrencies such as Bitcoin. The Budget Review 2018 (Budget) proposes that the income tax and value-added tax (VAT) legislation be amended to deal with cryptocurrencies, which pose a risk to the South African tax system. Given the current Budget deficit, the imposition of taxes on cryptocurrencies would assist the South African Revenue Service (SARS) with increasing its revenue collection going forward.

Give SARS no excuse to delay refunds!

An investigation by Tax Ombud, Judge Bernard Ngoepe, found that complaints of the alleged delayed payment and even payment avoidance by the South African Revenue Service (SARS), of income tax and VAT refunds, were justified.

Lifting the lid on the VAT increase

The VAT hike as part of the 2018 Budget Speech poses the risk of eroding the spending power of poor and lower-income households, exacerbating poverty and increasing inequality. VAT is a regressive tax - Value added tax (VAT) – charged on most goods and services at a rate of 14% – is levied irrespective of how much somebody earns, making it a regressive tax.

Vital VAT rate increase considerations!

While the necessary legislative provisions to give effect to the proposed increase are still to be adopted by Parliament, one can accept that the Minister's proposal to increase VAT from 1 April 2018 will be implemented. A number of important issues need to be considered to ensure a seamless transition.

2018 Budget Comments – International Tax

South Africa has specific anti-tax avoidance legislation aimed at South African owned foreign companies. This so-called controlled foreign company tax legislation in essence aim to tax the notional taxable income of a foreign company in the hands of its South African shareholders.

2018 Budget Comments – Corporate Tax

What will the 2018 Budget Speech mean for your business? Our experts share their insights. Join the conversation on Twitter #SABudget2018.
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