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Festive Season Wishes – A message from Cedric

Year End message from Cedric                                                               2020 year NOT SO GREAT 2021 year CHALLENGING THE LAST TWO YEARS FEEL LIKE A BLUR! If anything, the human race is resilient. When I

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Will you be receiving a VAT invoice this year?

All value-added tax (VAT) vendors that have gone through a VAT verification from the South African Revenue Service know how frustrating the delays on input VAT refunds can be when supporting documents do

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What is a “transaction” for transfer duty purposes?

According to reports, given current low interest rates, there have been an uptick in property transactions. Therefore, it is worthwhile considering the potential impact of any transfer duty taxes to

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Who qualifies for a special trust and how is it taxed?

Unlike “conventional trusts” that are taxed at a flat tax rate, a special trust is taxed on the same sliding scale applicable to natural persons. The Income Tax Act provides

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Employee share schemes: Spur restaurants suffer a blow

In October 2021, the Supreme Court of Appeal (SCA) handed down judgment upholding the Commissioner for the South African Revenue Service’s appeal against an earlier decision in the Western Cape

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Business sustainability: Greener, cleaner, cheaper

As the risks of climate change become more intense and prevalent in today’s world, businesses are feeling the pressure to adapt and rethink their business models, making sure they align

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Spouses and couples beware: Changes are on the way

Being a person’s spouse could have varying tax consequences, particularly where they are married in community of property. Currently, for income tax purposes, you are deemed to be a person’s

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Anomalies in fringe benefits regarding retirement funds addressed

With effect from 1 March 2016, and in terms of paragraph 2(l) of the Seventh Schedule to the Income Tax Act, all employer contributions to a retirement fund on behalf

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Disputing SARS decision and assessments

A taxpayer who is aggrieved by an assessment or decision of SARS against that taxpayer has the right to dispute that assessment or decision. If an original assessment has not

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How to make vaccination a part of your business policies

While employers cannot force their employees to be vaccinated, there are various grounds for dismissing employees who object, provided that the employer has conducted a thorough risk assessment to determine the need for vaccination. They also need to

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Why your business should place an emphasis on building relationships

Every business in the world sells something. They sell goods or services in order to address a need or desire of a consumer, and to achieve a profit in the process (at the very least only to ensure its

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More time to benefit from the learnership tax incentive

The Learnership Tax Incentive, which was introduced in the Income Tax Act on 1 October 2001, is a programme that supports skills intensity through the tax system. To encourage skills

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The A-Z of the POPI Act

The Protection of Personal Information (POPI) Act came into full effect on the 1st of July 2021. If you still haven’t implemented your POPI compliance strategy, it is strongly advisable that you take quick

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ETI schemes: SARS rules

In a Binding Private Ruling issued on 6 July 2021, SARS has made strict ruling on an Employment Tax Incentive Act (ETI) scheme that has been doing the rounds. It

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Home office expenses: Do I qualify?

Tax practitioners have been inundated with queries from clients on the possible relief offered by the South African Revenue Service (“SARS”) on the possibility of deducting from their taxable income

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ETI, SDL, and SETA – What do you need to know?

It was Nelson Mandela that famously said, “The youth of today are the leaders of tomorrow”. And although some years have passed since his death, his words still echo true.

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Primary residence exclusion: Things to look out for

The Eighth Schedule of the Income Tax Act, which deals with capital gain tax, allows for exclusion from liability on any gains realised on the sale by a taxpayer of

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Here are some ways to save time in the working day

South Africa ranks among the countries with the longest average working hours per week. The average worker in South Africa works approximately 42.5 hours per week (or 8.5 hours a

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Intra-group transactions and tax benefits

The Income Tax Act contains various provisions in terms of which transactions can occur between specified parties without adverse tax consequences being incurred in respect of those transactions. These provisions

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Tax neutral asset for share transactions

The Income Tax Act contains various provisions in terms of which transactions can occur between specified parties without adverse tax consequences being incurred in respect of those transactions. These provisions

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Can losses be distributed out of a trust?

On 18 March 2021, the Supreme Court of Appeal delivered judgment in the case of Massmart Holdings Limited v The Commissioner for the South African Revenue Service. The case dealt

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10 tips for excellent cash flow management

Are you sitting down? Let us share a frightening statistic with you. In a report published by FinFind in November 2020, it was found that 42.7% of small businesses in South Africa were forced to

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Budget 2021: Individuals and savings

Finance Minister Tito Mboweni delivered his third annual budget address on 24 February 2021. Below we highlight some of the significant proposals, which will likely be contained in the Draft Taxation Laws Amendment Bill

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Why the POPI Act matters

The right to privacy is enshrined in Section 14 of South Africa’s Constitution and we understand it to be a vital human right. It states: “Everyone has the right to privacy,

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How to lead when the only certainty is uncertainty

Humankind has always been known for its innovation and ability to advance in technology and science. Most of human development and technology is the product of the last 200 years of history.

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Ways to grow your business as a sole proprietor

Running a business as a sole proprietor, especially in a highly volatile economy, is a momentous task. You started your business because you believed that, at least to some extent, you could make the

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Healthy minds, healthier remote workers

It’s a strange new world that we’re living in, one in which the digitalisation of the traditional office is happening at a rapid rate. Many businesses are reaping the benefits

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What happened to tax in 2020?

As a new year dawns, we reflect on some of the significant highlights (and lowlights) of the 2020 tax year and look ahead at how it will influence 2021. Legislative

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When are subordination loans used?

In the current economic climate, it is not uncommon for companies to find themselves going through periods of varying levels of financial distress. These periods of financial distress may be

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Interest: SARS’ view on the in duplum rule

The in duplum rule originated from the South African common law and has been applied through South African case law for over 100 years. The rule aims to protect borrowers from exploitation by

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Where to find money when you have no money

As COVID-19 has ravaged the economy and stripped it bare of tens of thousands of jobs, there is a real threat to the livelihoods of many ordinary working South Africans.

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When will you be able to insure your tax position?

In addition to tax liabilities (tax capital amounts), taxpayers are also subject to an array of penalties and interests in respect of late payments, understatements, specific punitive penalties, and compliance-related penalties

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Year End message from Cedric

2020 vision GREAT 2020 cricket GREAT 2020 year NOT SO GREAT WHAT A YEAR THIS HAS BEEN !!! Certainly one of the strangest, longest and most difficult I have ever

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5 Digital networking tips to help your business stand out

The importance of networking – especially during COVID-19 – should not be overlooked. While many business owners have been struggling to stay afloat in the economic downturn that has resulted from the events of

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Why you need new business policies before July 2021

Since the POPI Act came into effect on the 1st of July 2020, many businesses have had to rethink the way that they use and store information of individuals. In some

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Don’t suffer the tax consequences of waived debt

Many natural persons or trust shareholders in companies are confronted with the unintended tax consequences of owing an amount on a loan account to the company in which they hold those shares. These

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The unfortunate timing of BGR55 for developers

In terms of the Tax Administration Act, the South African Revenue Service (“SARS”) can issue Binding General Rulings (“BGR”) on matters of general interest or importance and clarifies the Commissioner’s application or interpretation

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Bursaries and scholarships: The tax rules are changing

Over the past several years, many employers and employees have made use of the beneficial tax treatment of bursary and scholarship schemes, as provided for in the Income Tax Act.

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Tax disputes: Suspension of payment

With the 2020 tax filing season in full swing, many taxpayers are likely to engage in dispute proceedings as their income tax assessments are issued by SARS. This will particularly be the case where errors are contained

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Scammers posing as SARS officials are on the rise

In late August 2020, a large credit bureau in South Africa was the target of a data breach where millions of private individual and company data records were compromised. This data leakage, coupled with the tax filing season, makes for the perfect opportunity for taxpayers’ information to be

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Tax assessment errors: What do I do now?

With the 2020 tax filing season in full swing, many taxpayers will likely engage in dispute proceedings as SARS issues their income tax assessments. This will particularly be the case where errors

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Does the Disaster Tax Relief Administration Bill offer real relief?

The last few months have been extremely tough for small business owners as a result of the global COVID-19 pandemic, and various lockdown measures that have created a challenging trading environment. The South African Revenue

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SARS rules on the consequences of an unbundling transaction

Introduction In terms of the Tax Administration Act, the South African Revenue Service (“SARS”) can issue Binding Class Rulings (“BCR”) in response to an application by a class or group of persons and clarifies how the

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What to expect this tax season as an individual taxpayer

The tax season is swiftly approaching. For many people, it’s a time of the year that they dread. When it comes down to it, tax can become complicated mess that

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The tenant-landlord relationship

The relationship between landlord and tenant is a symbiotic one, where the efforts of either party results in the best outcome for both parties. During the lockdown, this two-way relationship

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The taxing of capital gain

Section 9HA of the Income Tax Act deals with deemed disposals by a deceased person. This section of the Act often causes some confusion, especially where there are heirs or legatees other than the surviving spouse. In

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What is meant by “connected persons”?

On 28 January 2020, SARS released interpretation note 67 providing guidance on the term “connected persons” in section 1(1) of the Income Tax Act. The interpretation note itself is voluminous

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SARS’ power to appoint a bank as a collecting agent

Decisions of South Africa’s courts are an essential source of law. The courts uphold and enforce the Constitution and develop common law that is consistent with the values of the

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Tax statutes: It’s all about context

Decisions of South Africa’s courts are an essential source of law. The courts uphold and enforce the Constitution and develop common law that is consistent with the values of the

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Withholding of employees’ tax during liquidation proceedings

Decisions of South Africa’s courts are an essential source of law. The courts uphold and enforce the Constitution and develop common law that is consistent with the values of the

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The give and take of share transfers

Many business transactions are concluded in terms of section 42 of the Income Tax Act. The section essentially allows a transfer of an asset by a person to a company, in exchange for equity shares in that company,

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Usufructs and tax consequences

A usufruct is a limited real right in property. The usufruct construct takes the form of a common-law personal servitude, which, as a limited real right, grants the holder (the

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Practical Considerations in Claiming SARS COVID-19 Relief

While South Africa is currently in a state of lockdown during which a significant number of businesses have had to cease operations, some relief from a tax perspective has been announced

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This is the most unusual and absolutely scary time that I have ever witnessed

Dear Clients This is the most unusual and absolutely scary time that I have ever witnessed. What are the facts? Economies have been shut down worldwide We all will lose

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Lockdown Tips: Simple steps to take control of your finances

The COVID-19 pandemic has spread across the globe and left economic destruction in its path. Now, more than ever, it is of utmost importance to take control of and manage

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Explanatory Notes On Further COVID-19 Tax Measures

1 INCREASE IN THE EXPANDED EMPLOYMENT TAX INCENTIVE AMOUNT ALLOWABLEI. BACKGROUND The first tax measures announced by the Minister on 29 March 2020 and included in the 2020 Draft Disaster

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The CIPC to Intensify Compliance Enforcement

The Companies and Intellectual Property Commission (CIPC) Compliance Checklist was implemented by CIPC from 1 January 2020. Companies will be required to complete the Compliance Checklist, prior to submitting their

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CIPC Compliance Checklist Working Paper

The following table sets out the relevant sections that are referred to in the CIPC Compliance Checklist, and each section’s detailed requirements/explanations can be found in the Checklist.pdf document: No

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Sections of the Companies Act that are in Checklist

4. Solvency and liquidity test (1) For any purpose of this Act, a company satisfies the solvency and liquidity test at a particular time if, considering all reasonably foreseeable financial

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Time Value of Money – Historical Tax Rates

It has often been said that inflation is the destroyer of wealth. To put this statement into a tax perspective, it is interesting to have a look back at historical

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For how long can your taxes haunt you?

In terms of section 99 of the Tax Administration Act, 28 of 2011, an assessment may not be made three years after the date of an original assessment by the

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Management of tax debt

With the tax filing season for individuals now closed, taxpayers may find themselves with tax debt that is due. This may be due to administrative penalties as a result of

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Deductible or not deductible?

On 15 November 2019, the Cape Town Tax Court handed down judgement in ITC24614. It is yet another judgement concerned with the distinction between expenses of a capital nature or

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Valuation of trading stock for tax purposes

On 27 September 2019, just over a year since delivering judgement in another matter with very similar facts, the Supreme Court of Appeal in CSARS v Atlas Copco South Africa (Pty) Ltd (834/2018) [2019] ZASCA

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Tax consequences of usufructs created upon death

A usufruct is a limited real right in property. The usufruct construct takes the form of a common-law personal servitude, which, as a limited real right, grants the holder (the

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Taxation of Foreign Employment Income

South Africa has a residence-based tax system, which means residents are taxed on their worldwide income, regardless of where that income was earned. South African tax residents living overseas and earning remuneration in respect of services rendered

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Managerial Accounting: The Key to Better Business

As a manager of an organisation, there is a great responsibility for decision making. The question lies in how a manager can utilise accounting information to make better decisions. Managerial

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Belastingbeplanning: Minder ja, maar nie niks nie

Belastingbeplanning is noodsaaklik om te verseker dat jou welverdiende Rande, binne alle wette en regulasies van die Suid-Afrikaanse Inkomstediens en die Inkomstebelastingwet, te rek vir die nabye toekoms maar ook

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Types of Share Awards

Binding Class Ruling 069 was issued on 23 October 2019 and relates to the tax implications that arise in respect of proposed employee share schemes (“the Schemes”) in terms of

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Leasehold responsibilities

Certain lease agreements regarding land and property stipulate that the lessee, as part of his/her obligation under the agreement, is expected to make improvements to the leased asset. This doesn’t

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Save for your golden years

Saving for retirement can prove to be a very complex task, however, this does not have to be the case. Many people are not making the necessary provisions for retirement.

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Leasehold responsibilities

Certain lease agreements regarding land and property stipulate that the lessee, as part of his/her obligation under the agreement, is expected to make improvements to the leased asset. This doesn’t

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What are bitcoins?

1.1 Background to Bitcoin Bitcoin, Ether and Litecoin. These are some of the most prominent cryptocurrencies on the market today. Bitcoin is by far the best-known cryptocurrency due to the

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IFRS vs IFRS for SMEs

The majority of financial statements in South Africa are arguably compiled by implementing the International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs) as a financial reporting

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Rating formula for farming income

The Income Tax Act[1] provides for a natural person who derives income from farming operations to elect (within three months after a year of assessment) to be subject to tax

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Becoming a Chartered Accountant

The process of becoming a chartered accountant can be a gruelling and challenging part of your life, just ask any chartered accountant out there. Becoming a CA(SA) requires a minimum

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Internal news – August 2019

ABASA Dinner 2019 Newtons Staff had an opportunity to attended the yearly ABASA function in Bloemfontein. The Mission of the Association for the Advancement of Black Accountants of Southern Africa

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Is there tax on gift cards?

The Cape Town Tax Court delivered a judgement on 17 April 2019 on the timing of income tax in relation to gift cards issued by a retailer.[1] Here, the taxpayer

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Section 7C: What is it all about?

Section 7C of the Income Tax Act, No 58 of 1962 (the Act), was enacted effective 1 March 2017 and serves as an anti-avoidance measure aimed at curbing the tax-free

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2019 Tax legislative amendment

The 2019 tax legislation amendment cycle commenced on 25 June, when National Treasury issued the initial batch of the Draft Taxation Laws Amendment Bill which covers specific provisions that require

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Internal news – July 2019

Evan Healey – Newtons Office Superbru Pool Congratulations to Evan Healey on winning the Newtons Office Superbru Pool. Newtons – Mandela Day 2019 It only takes 7 basic colours to make

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Belasting op buitelandse indiensnemingsinkomstes

Agtergrond Artikel 10(1)(o)(ii) bied verligting aan belastingbetalers deur nie op buitelandse indiensnemingsinkomste (“employment income”) belas te word nie aangesien die buitelandse maatskappy reeds LBS / belasting op daardie inkomste aftrek.

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Tax season 2019: What do you need to keep in mind?

SARS recently released two media statements, in which it notes several improvements made to eFiling for the 2019 tax season, including the issue of customised notices indicating specific documents required

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Calculating your foreign currency capital gain

With the fast approaching 2019 tax season, taxpayers who have realised a capital gain in a foreign currency should take note of the special rules that apply to the translation

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Revised standard on auditing accounting estimates and related disclosures – ISA 540 (Revised)

During March 2016, the International Auditing and Assurance Standards Board (IAASB) released a project proposal with the intention to revise ISA 540, Auditing Accounting Estimates, Including Fair value Accounting Estimates

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Efficient and cost-effective audits

An efficient audit is one that reduces the audit risk to the targeted level, ensures that there are no errors contained in the financial statements while completed on time and

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Deduction for photovoltaic solar energy plants

Section 12B(1) and (2) of the Income Tax Act[1] provides for a 50/30/20 income tax deduction in respect of certain machinery or plant owned by the taxpayer and which was

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Jou lewende hawe voer Jan Taks

Die gesegde lui, daar is net twee dinge in die lewe wat seker is: die dood en belasting. Die twee loop dikwels hand-aan-hand en beide is (ongelukkig) onafwendbaar. Die wysiging

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SARS scams

Education and awareness around identity theft, phishing and other frauds have become part of life globally. If nothing else, scamsters are innovative and keep trying new avenues of defrauding businesses

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Transitional rules for interest payable by SARS

The South African income tax system is not cash-based. This means that a person can effectively be taxed on amounts that they have not yet received in cash, but that

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Internal news – April 2019

CANSA Shavathon 2019 Newtons hosted there first ever CANSA Shavathon on the 8th March this year This  is one of South Africa’s best-loved events in support of a very worthy

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Thinking of selling an asset?

What happens when you sell an asset? When you sell or dispose of an asset, you either realise a profit or a loss from the exchange. When you realise a

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Requests for suspension of payment from SARS

Since its introduction, the “pay now, argue later” rule relating to disputed amounts of tax has been and remains to be the subject of much controversy, and rightfully so. The

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Fixed and reimbursive travel allowances

When determining the best remuneration package for travelling employees, South African employers and employees are continuously considering the benefits between a travel allowance, a reimbursive travel allowance or both. For

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Internal news – March 2019

1st Years Concert Newtons hosted the Annual First Year’s Concert on Thursday the 14 March 2019 in the Newtons Boardroom. As always the 1st year clerks did not disappoint and

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Helpful tax resources

South African taxes are inherently complex and often involve interpretation, consulting and in exceptional cases, a fair amount of educated guessing on exactly what the legislature intended when the various

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Ring-fencing of assessed losses of certain trades – Part 1

Persons are generally allowed to set off any losses incurred in respect of one trade against the income derived from another trade, thereby reducing their overall tax liability. However, section

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Ring-fencing of assessed losses of certain trades – Part 2

Section 20A of the Income Tax Act[1]ring-fences losses incurred by natural persons from certain trades under specific circumstances. If applicable, the natural person will not be able to set off

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