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PKF Durban

2019

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2019

03 10 2019

PROPOSED EXPANSION OF THE VAT CORPORATE REORGANISATION RULES

The corporate reorganisation rules of the Income Tax Act No. 58 of 1962 (“the ITA”) provide for a “rollover” mechanism when, for example, assets are transferred from one group company to another. Provided the various requirements of the applicable provisions are adhered to, no capital gains tax, transfer duty or securities transfer tax (to the extent applicable) is triggered at the time of such transactions – rather the transferee is regarded as “stepping into the shoes” of the transferor in relation to the assets transferred.

03 10 2019

VENTURE CAPITAL COMPANIES: RE-INTRODUCTION OF DEDUCTION LIMITATION

The venture capital company (“VCC”) regime was introduced into the Income Tax Act No. 58 of 1962 more than a decade ago. The purpose of this regime is to raise equity funding in support of small businesses which would otherwise not have access to market funding.

27 08 2019

THE CARBON TAX ACT

The Carbon Tax Act came into force on 1 June 2019. The first tax returns and payments for effected tax payers will be due July 2020. This return would cover the period 1 June 2019 to 31 December 2019; subsequent periods will run from 1 January to 31 December. Form DA180 would need to be submitted in respect of each licensed emission generation facility.

22 07 2019

VAT ON ELECTRONIC SERVICES PROVIDED BY A FOREIGN GROUP OF COMPANIES

The VAT Act provides that VAT be levied is levied on imported services. Of late the focus has been on Electronic Services provided by non-residents to residents. Examples of these electronic services will be the provision of cloud computing as well as online services.

22 07 2019

VAT IMPLICATIONS OF SERVICES PROVIDED TO NON-RESIDENTS

The South African VAT system is destination-based. This means that VAT is levied on the consumption of goods and services within the borders of South Africa. It follows then that goods and services supplied by VAT vendors where consumption takes place outside of South Africa and where benefit is enjoyed outside South Africa, is subject to VAT at a rate of zero per cent.

22 07 2019

THE INCOME TAX IMPLICATIONS OF DEBT WRITE-OFFS

Where a creditor and a debtor enter into an arrangement whereby debt is cancelled or waived, such an arrangement is a concession or compromise as defined in the Income Tax Act. A concession or compromise is a debt benefit which carries income tax consequences.

05 06 2019

WITHDRAWALS FROM RETIREMENT ANNUITY FUNDS, PRESERVATION PENSION FUNDS AND PRESERVATION PROVIDENT FUNDS UPON EMIGRATION

Prior to the change in tax legislation effective from 1 March 2020, South African tax residents who are employed outside of South Africa were (subject to certain criteria) exempt from South African tax on their foreign earnings. From 1 March 2019 the maximum exemption from tax has been limited to the first R1M in taxable income.

01 05 2019

EXPECTING EXPAT TAX

All South African tax residents working abroad should be considering whether they may be impacted by tax law changes which will enter into force on 1 March 2020.

01 05 2019

REPORTABLE ARRANGEMENTS: EXPANSION OF LISTED REPORTABLE ARRANGEMENTS

Section 35 of the Tax Administration Act No. 28 of 2011 (“the TAA”) sets out the circumstances in which an arrangement would constitute a “reportable arrangement”. A “reportable arrangement” does not in itself give rise to a tax liability, but may give rise to the compilation of a cumbersome and onerous report for submission to SARS – the failure of which could give rise to significant penalties.

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