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.

Capital gains tax may be triggered upon the disposal of an asset by a taxpayer in circumstances where the proceeds or deemed proceeds arising from such disposal exceeds the base cost of the asset in the hands of the taxpayer.

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.

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.

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.

The VAT Act provides that VAT be 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.