Date: 4 October 2017
Act: Income Tax Act 58 of 1962
Summary: This ruling determines the income tax consequences for the debtors and creditors that form part of the same group of companies, following the forgiving of a loan and subsequent liquidation of the debtors.
This binding private ruling is valid for a period of five years from the date of this ruling.
For access to the entire ruling please click here
Date: 14 September 2017
Act: Income Tax Act 58 of 1962
Summary: This ruling determines that the participation exemption from capital gains tax (CGT) is available in relation to the disposal of assets by a controlled foreign company (CFC) since the parties are not connected persons at the time of the proposed transaction, albeit that such a relationship is created by the transaction.
This binding private ruling is valid for a period of five years from the date of this ruling.
For access to the entire ruling please click here
The OECD released the latest updates to the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations on 10 July 2017. This 2017 edition incorporates the substantial revisions made in 2016 to reflect the clarifications and revisions agreed to in the 2015 BEPS Reports on Actions 8-10 Aligning Transfer pricing Outcomes with Value Creation and on Action 13 Transfer Pricing Documentation and Country-by-Country Reporting. It also includes the revised guidance on safe harbours approved in 2013 which recognises that properly designed safe harbours can help to relieve some compliance burdens and provide taxpayers with greater certainty. Finally, this edition also contains consistency changes that were made to the rest of the OECD Transfer Pricing Guidelines.
Please follow the link below to access the latest version of the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations:
OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations
Maggie Kgobane was interviewed on Tax related matters with SARS Manager Thokozani Mzantsi and Advocate Ombudsman Eric Mkhawane of SARS on Yilungelo Lakho on SABC 1 on the 10th of July 2017. Maggie shared her expertise with utmost confidence.
She addressed questions that are frequently asked by taxpayers regarding Taxation and included useful guidelines that should be followed when filing your tax return. Tax Consulting South Africa is very proud of Maggie’s sterling performance on national television.
Please see below a clip of the interview:
A repeat of the interview will air at 22:00 on 2017-07-13 on SABC 1
The 2016/17 tax season is here and this is an important year of tax filing for expatriate employees, especially South Africans working temporarily abroad. We are all well aware of the tax change on the cards and this tax submission must be done bearing future tax strategy in mind.
As an expatriate, there are a few tax concepts to keep in mind, most importantly that you need to declare world-wide income. We have seen so many expatriates or their tax practitioners simply submitting a zero tax return and this is incorrect. This can only be done where you are a non-resident for tax purposes and have no South African source income.
Where you do file correctly, i.e. declaring your world-wide income, there is obviously the section 10(1)(o)(ii) exempts foreign income exemption, which is the section which will be changed this year. Many expatriates have decided to assume a status as a non-resident to pre-empt the impact of this tax law change. Some have even proceeded to obtaining tax residency certificates in foreign jurisdictions. Whilst a residency certificate is by no means conclusive of the tax status, this no doubt assists in discharging the burden of proof.
SARS seem to have caught onto this trend and have now introduced new sections in the tax return to specifically make sure that these expatriates correctly declare their tax position. By making incorrectly a non-residency declaration, there is an automatic trigger of various tax and exchange control provisions, and expatriates must please be cautious to only make an informed decision hereon. There should be no willy-nilly assumption of non-residency and no “quick ticking” of any boxes.
Otherwise, we have seen an increased audit on expatriate employees, but at this stage we are unsure if this is simply part of the higher SARS 12% audit target per year, or whether there is a specific focus on expatriate tax compliance.
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