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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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Internal news – February 2019

Kloppers Marathon Newtons staff had the privileged to man a water point at the annual Kloppers Marathon, as you can see fun was had by all. Thank you to the

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Turnover tax deregistration

The Sixth Schedule of the Income Tax Act details the workings of the turnover tax system applicable to micro-businesses. Turnover tax is an optional system (with preferential tax rates) and

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Form requirements for objections

Dispute resolution with the South African Revenue Service (SARS) generally has a two-pronged approach. Firstly, taxpayers must present their case on the merits – this will include the factual basis

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Admin penalties for outstanding Corporate Income Tax returns

In general, all registered companies must submit corporate income tax (“CIT”) returns within 12 months of the end of the company’s financial year-end. This is applicable to all companies that

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Section 24C future expenditure

The South African Revenue Service (“SARS”) issued a binding private ruling (“BPR 315”) in accordance with sections 78(1) and 87(2) of the Tax Administration Act[1] on 10 January 2019. This

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Non-resident sellers of immovable property

Section 35A of the Income Tax Act[1] came into effect on 1 September 2007 and sets out the capital gains tax consequences of the sale of immovable property situated in

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Zero-rating of services to non-residents

South African value-added tax (VAT) vendors are often unsure of the tax consequences of issuing invoices to foreign customers or clients and whether such services should be invoiced at the

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MSI Global Alliance appoints four new member firms

MSI Global Alliance (MSI), one of the world’s leading international associations of independent legal and accounting firms, is delighted to welcome four new member firms to the association. The new

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MSI Global Alliance welcomes new members in the US and India

MSI Global Alliance, one of the world’s leading international associations of independent legal and accounting firms, is delighted to announce the admission of US law firm Vandeventer Black LLP and

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Korporatiewe beheer – Finansiële jaareinde

Die finansiële jaar van ’n maatskappy staan bekend as die rekenkundige periode. Ingevolge artikel 27 van die Maatskappywet No. 71 van 2008 (“die Wet”), het elke maatskappy wat geregistreer is

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Management’s responsibility

Throughout the audit of a set of financial statements, the phrase “management/director’s responsibility” appears. It is included in the engagement letter, the financial statements and the auditor’s report. But what

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Correction of tax invoices

Since it is illegal to issue more than one tax invoice per taxable supply, and another tax invoice may not be issued to alter any consideration in respect of an

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Different interest rates in tax

The Income Tax Act[1] contains definitions for various interest rates. These interest rates serve as the basis for interest calculations in income tax in different circumstances and can broadly be

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Newtons Internal news (October)

Newtons supports Breast Cancer Awareness Month this October The Newtons “Super Woman” Supporting Breast Cancer Awareness Month is Lucha Greyling, Marie van der Merwe, Susan Nel, Tineke Erasmus, Thelma Oertel,Amoré

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Sperdatums vir individue en administratiewe boetes

Die belastingseisoen het op 1 Julie 2018 oopgemaak en die sperdatums vir die huidige belastingseisoen is as volg: Tipe belastingpligtige   Kanaal   Sperdatum   Alle belastingpligtiges   Per hand

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Tax on retirement lump sums

Determining the tax consequences in respect of any lump sum benefits from retirement funds can be complex and various legislative changes have been incorporated over the last few years, to

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Changes to bad debt allowance

Most South African businesses are at some point in time exposed to credit risk in the form of bad debts. Although taxpayers would undoubtedly prefer to recover the debts, the

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Newtons Internal news (September)

Congratulations to Icy Jooste….winner of the 2018 Superbru Superrugby Log!!! Love begins in a MOMENT, Grows over TIME, And lasts an ETERNITY. Congratulations Liezl and Markus du Plessis on this

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SARS verifications, audits – when, why and what to do

Being selected for an audit and being selected for verification are two different processes. Verification: Once you have submitted your return, it could be selected for verification. A verification involves

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Mandatory Rotation of Auditors

Over the past few years the audit industry has been under significant scrutiny where the independence of auditors has been questioned. In response to this and to further drive auditor

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Valuation of preference shares

In income tax, the question of valuation of shares often causes a great deal of uncertainty, especially where shares are not traded on a recognised exchange. Although the Eighth Schedule

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MSI Global Alliance appoints law member in Canada

MSI Global Alliance, one of the world’s leading international associations of independent legal and accounting firms, is delighted to announce the admission of Canadian law practice Bernier Beaudry to the

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Congratulations to Arné and Gillian Nel

“Let there be spaces in your togetherness, And let the winds of the heavens dance between you. Love one another but make not a bond of love: Let it be

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Value Added Tax (VAT) Rates Change

Effective Date:  1st April 2018 The Minister of Finance Dr. Moeketsi Majoro in his budget speech delivered in Parliament on 28 February 2018 announced changes in rates of Value Added

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Valid Tax Invoice Requirements for VAT Vendors

When making a purchase for your business, you should always ensure you receive a valid VAT invoice. This enables you to claim input VAT from SARS. With the change in

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How the VAT increase affects your business

Consumers and suppliers have by now had an opportunity to familiarise themselves with the increased Value-Added Tax (VAT) rate of 15% since 1 April 2018. There are however many technical

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Employer Annual Reconciliation Due

Employers should be aware that Employer Annual Reconciliation submission due date is fast approaching. If the relevant deadlines are missed, certain penalties will apply. When should it be paid? The

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Lesotho Value Added Tax (VAT) Rates Change

Effective Date:  1st April 2018 The Minister of Finance Dr. Moeketsi Majoro in his budget speech delivered in Parliament on 28 February 2018 announced changes in rates of Value Added

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Congratulations Graduates!

Congratulations to Laureate Mathe and Wayne Nortje who were awarded a Bachelor of Commerce Honours in Management Accounting and Baccalaureus Commercii (Accounting) degree respectively at the April Graduation Ceremonies of

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Bloemfontein Golf Club – Club Championships

Newtons where the proud sponsors of the 2018 Bloemfontein Golf Club – Club Championships held on the 14th and 15th April 2018. Here is Cedric Peterson congratulating Wilco Nienaber on

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Employees’ tax reconciliation 2018

April to May each year is the time that employers are given to perform their employees’ tax reconciliation. During this Employer Reconciliation process, employers are required to submit an EMP501

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Why it is important to know the value of your business

A properly considered business valuation can be the first step in many essential business processes and activities. Although there are many examples, these might include procurement of a buy and

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Cryptocurrency

Cryptocurrency and blockchain has been the hot topic in the media the past year. It is a concept that few truly understand, and could change the future for everyone in

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Happy socks bring luck at SAICA Golf Day

Thanks to the two four ball teams that represented Newtons in the 2018 SAICA Golf Day held on Friday 16 March at Bloemfontein Golf Club. Ending 9th and 15th out

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Congratulations Tineke!! Your hard work has made your dream a reality!!!

  “Some people dream of success while other wake up and work hard at it! – Napoleon Hill” We are super proud of our newest CA(SA) – Tineke Erasmus-Nel. Congratulations

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