Tag: Tax
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Claiming VAT input on “pre-enterprise” expenditure
In terms of section 17 of the Value-Added Tax Act, 89 of 1991, a registered VAT vendor is entitled to claim back any amounts of VAT paid on goods and services acquired or imported that will be used in the furtherance of that particular VAT enterprise. The ability to claim input VAT in this manner […]
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Capital Gains Tax exit charge
In terms of section 1 of the Income Tax Act a natural person will be a “resident” for tax purposes if that person is ordinarily resident in the Republic of South Africa (“the Republic”). Persons who are not at any time during the relevant year of assessment ordinarily resident in the Republic, will also qualify […]
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Dividends tax returns
With effect from 1 April 2012, dividends tax was introduced to replace the then “secondary tax on companies” (or “STC”). The tax is currently levied at 20%. The dividends tax regime brought with it a requirement for dividends tax returns to be submitted periodically (if even no liability for dividends tax arose) and we wish […]
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Tax residence for individuals
According to the South African Revenue Service (SARS), South Africa has a residence-based tax system, which means residents are, subject to certain exclusions, taxed on their worldwide income, irrespective of where their income was earned. By contrast, non-residents are taxed on their income from a South African source. In an increasingly global society where individuals […]
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Interest free loans cross border
A consideration of the tax consequences of interest free loans will be incomplete if not also considered in the context of interest free debt funding being provided cross-border. Typically, when “cheap debt” is encountered it is in the form of low interest or interest free loans being provided to related parties (or “connected persons” as […]
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Interest free loans with companies
The latest annual nation budget presented in Parliament proposed the dividends tax rate to be increased with almost immediate effect from 15% to 20%. The increased rate brings into renewed focus what anti-avoidance measures exist in the Income Tax Act[1] that seeks to ensure that the dividends tax is not avoided. Most commonly, the dividends […]
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New proposed tax amendments
National Treasury releases proposed amendments to tax legislation on an annual basis. Some of the most important of these are already foreshadowed when the Minister of Finance delivers his budget speech in Parliament. The proposals made in that Budget Review are then formalised into proposed draft tax legislative amendments in the form of the Draft […]
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How South African dividends are taxed
Dividends received by a South African taxpayer are generally exempt from income tax. The major exemption though being dividends received from so-called REITs (these being some of the major property owing companies listed on the JSE (such as for example Redefine Properties Ltd). Dividends received from REITs are not exempt from income tax, and will […]
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Financial assistance to directors
A company lending money to its directors may not be as simple a process as it may initially appear to be – not even in the case of so-called “one-man” companies. There are various requirements in the Companies Act, 71 of 2008, to be adhered to, as well as certain potential pitfalls in the Income […]
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Request for suspension of payment
The ‘pay now, argue later’ rule contained in section 164 of the Tax Administration Act, 28 of 2011, requires taxpayers to pay any tax debts due in terms of an assessment, irrespective thereof that the assessment in question may be disputed by the taxpayer. In other words – and as the name suggests – even […]
