Tag: Graeme Palmer

Voluntary Disclosure Programme (VDP) applications have been a permanent part of our law since 2012. The essence of a VDP application is that a taxpayer is incentivised to disclose to SARS a tax default by being granted some relief from the consequences of their default.

While a tax judgment may have all the effects of a judgment, it is not a judgment in the ordinary sense, but rather an enforcement mechanism for the recovery of tax. If a person has an outstanding tax debt, SARS may, after giving at least 10 business days’ notice, file with the court’s registrar a certified statement setting out the amount of tax payable.The effect of such filing is that it must be treated as a civil judgment lawfully given in favour of SARS for a liquid debt for the amount specified in the statement.

Section 179 of the Tax Administration Act, 2011 allows SARS to issue a notice to a person who holds or owes money, including a pension, salary, wage or other remuneration, for or to a taxpayer, requiring the person to pay the money to SARS in satisfaction of the taxpayer’s outstanding tax debt.

Employee quarantines, reduced demand, disrupted operations and restricted movements are just a few of the challenges faced by business during the Covid-19 pandemic.

Subject to any applicable exemption, donations tax is payable on the value of any property disposed of under any donation. With effect from 1 March 2018 an amendment to section 64(1) of the Income Tax Act, 1962 (the Act) introduced a dual system for donations tax.

'Most favoured nation' clauses can be found in Double Taxation Agreements (DTA). These clauses are essentially where the tax treatment accorded by one state to another state must be no less favourable than the tax treatment extended to a third state.

A taxpayer who disputes a tax assessment has processes available in the Tax Administration Act, 2011 (Act) to contest the assessment. It is sheer folly for a taxpayer who contests an assessment not to avail himself of the mechanisms in the Act timeously.

There are tax benefits for registering a non-profit organisation as a Public Benefit Organisation (PBO) with the South African Revenue Service (SARS), whether such organisation is a non-profit company, trust or association.

The levy income of a body corporate, share block or an association of persons, such as a home owners association ('residential estate'), is exempt from income tax by virtue of section 10(1)(e) of the Income Tax Act.However, not all income received by a residential estate is exempt from tax, only levy income. SARS recently published a new Interpretation Note 64 on the levy exemption.

In addition to the tax payable, SARS can impose penalties on a taxpayer for an 'understatement'. In a standard case, and depending on the taxpayer’s behaviour, penalties can range from 10% for a 'substantial understatement' to 150% for 'intentional tax evasion'.