New requirements for waiving debt owed by dormant group companies

Currently, debt waiver provisions in the Income Tax Act 58 of 1962 (ITA) are dealt with in section 19 and paragraph 12A of the Eighth Schedule. A reduction / waiver of debt for more than the fair value of the consideration paid by the debtor for such waiver could result…

Topics: Commercial & Corporate Law | Tax Law

Multinationals in high-tax jurisdictions to benefit from relaxed IP regulations

The 2017 Budget announced that the regulatory framework regarding cross-border intellectual property transactions is to be relaxed, for both tax and exchange control purposes. The framework in question comprises a series of anti-avoidance provisions which…

Topics: Intellectual Property Law | Tax Law

SARS proposes tax relief for dormant group companies

Typically, companies in financial distress that wish to reduce their debt may enter into arrangements with their creditors, which may form part of the same group of companies as the debtor company, to either reduce, cancel, waive, forgive, discharge or convert …

Topics: Commercial & Corporate Law | Insolvency & Business Rescue | Tax Law

SARS says “pay up”, but the court says “no”: An important case on taxpayers’ rights

In Nondabula v Commissioner: SARS and Another (4062/2016) [2017] ZAECMHC 21 (27 June 2017), heard by the Mthatha High Court, Nondabula (Taxpayer), brought an application to interdict the South African Revenue Service (SARS) from invoking the provisions of s179…

Topics: Dispute Resolution | Tax Law

Checking SARS’ conduct and obligations when auditing taxpayers

South African taxpayers and companies have been alerted to expect more tax audits as a result of the increase in the SARS 2017/18 revenue budget. It is easy to see the connection: SARS needs to collect as much revenue as it can, and tax audits can have positive effects…

Topics: Tax Law

How to get the most out of Charitable Donations

This article explains the different types of legal entities that charitable donations can be made to and the tax consequences of those donations. The aim of this article is to educate donors in order that they can organize their tax affairs in the most tax efficient…

Topics: Commercial & Corporate Law | Tax Law

Potential tax consequences of the waiver of a contractual right

The term ‘disposal’ is widely defined in section 11 of the Eighth Schedule to the Income Tax Act 58 of 1962 (“the Income Tax Act”), and includes the waiver of an asset. For purposes of donations tax, a donation is defined in section 55(1) of the ITA as “any gratuitous…

Topics: Contract Law | Tax Law

An Overview of the South African Venture Capital Company Regime

In 2008, the South African Minister of Finance (“the Minister”) in his Budget Review introduced a tax incentive to encourage venture capital equity investments in small and medium-sized entities and junior mining companies. The tax incentive is intended …

Topics: Banking & Finance Law | Commercial & Corporate Law | Tax Law

Should you be charging interest on loans made to a trust?

When will s7C apply? Clients who have made, as well as those who are considering making, interest-free or low-interest loans to trusts must take note of a recent inclusion to the Income Tax Act (“the Act”). This inclusion comes in the form of Section 7C, which was…

Topics: Tax Law | Wills, Estates & Trusts

VAT and Employees’ Tax in regards to Non-Executive Directors

The question in regards the requirement to deduct employees’ tax from the remuneration paid to non-executive directors (NED), or whether the NED would be required to be registered for VAT, has been a longstanding debate. Often companies applied the more cautious…

Topics: Commercial & Corporate Law | Labour Law | Tax Law

Amnesty then and now – Tax and Exchange Control

On 15 May 2003, then Minister of Finance, Trevor Manuel, announced the introduction of a joint tax and exchange control amnesty. He punted the amnesty as an opportunity, in the face of the prevailing unfavourable international economic climate, for South Africans…

Topics: Banking & Finance Law | Tax Law

Heirs, immigrants, expatriates and investors take note: Period for administrative relief outside of the exchange control special voluntary disclosure programme extended

On 13 July 2016, the South African Reserve Bank’s (SARB) Financial Surveillance Department (FinSurv) issued Exchange Control Circular No. 6/2016 (First Circular). The First Circular sets out the exchange control (Excon) relief that will be available for all…

Topics: Tax Law

VAT rather than PAYE for non-executive directors

In the 2016 budget review, Finance Minister, Pravin Gordhan stated that clarity was required on whether the fees received by a non-executive director (“NED”) should be subject to PAYE or VAT. SARS was mandated to provide clarity on the issue and, almost a year…

Topics: Commercial & Corporate Law | Labour Law | Tax Law

Share buy-back transactions

Share buy-backs have become a very common mechanism for exiting an investment in a South African company since the introduction of dividends tax in April 2012. One of the reasons for this is that a share buy-back is advantageous from a tax perspective when compared…

Topics: Commercial & Corporate Law | Tax Law

Budget 2017: Personal Income Tax

In the 2017 Budget Speech, Minister Gordhan noted that (for the first time since 2009/10) tax revenues have not kept pace with economic growth. The projected tax revenue shortfall for 2016/17 is ZAR 30.4 billion – the largest shortfall relative to budgeted estimates…

Topics: Government, Politics & Policy | Tax Law

Does A Change Of The Terms Of A Share Constitute A New “Date Of Issue”?

In terms of section 8E of the South African Income Tax Act, 1962 (the “Act”), dividends received by or accrued to a person in respect of certain shares and “equity instruments”, as defined, must be deemed in relation to that person to be an amount of income if…

Topics: Commercial & Corporate Law | Tax Law

UK Tax Bill Shows There’s No Need For A Sugar Rush

Less than a month after Finance Minister Pravin Gordhan delivered his 2016 budget speech, where he announced the proposed new tax on sugar-sweetened beverages, his United Kingdom (UK) counterpart Chancellor George Osborne announced a similar initiative in…

Topics: Government, Politics & Policy | Health & Pharmaceutical Law | Tax Law

Get Help When Needed, But Onus To Comply Is On You

Two tax related judgments highlight how important it is for taxpayers to take responsibility for the accurate and timely submission of their tax returns. In addition, these cases highlight that taxpayers might be disadvantaged by not consulting specialised tax…

Topics: Tax Law

Report Back On The Sugar Tax Workshop Held By Treasury

On 11 November the National Treasury held a stakeholder workshop to discuss the proposed tax on sugar-sweetened beverages (“SSBs”). Treasury emphasised that it was going full steam ahead with plans to implement the tax on 1 April 2017, and that legislative …

Topics: Consumer Protection | Tax Law

Tax Ombud Complaints: Get Your Matter Dealt With

The Tax Ombud released its report for the 2015/16 year in early October. Of the 2,133 complaints received, 938 (44%) were rejected. When one is already struggling with a SARS tax matter, facing further obstacles when complaining to the Tax Ombud can worsen the…

Topics: Tax Law

Tax Law

Multinationals in high-tax jurisdictions to benefit from relaxed IP regulations

SARS says “pay up”, but the court says “no”: An important case on taxpayers’ rights

Checking SARS’ conduct and obligations when auditing taxpayers

How to get the most out of Charitable Donations

Potential tax consequences of the waiver of a contractual right

An Overview of the South African Venture Capital Company Regime

Should you be charging interest on loans made to a trust?

VAT and Employees’ Tax in regards to Non-Executive Directors

Amnesty then and now – Tax and Exchange Control

Heirs, immigrants, expatriates and investors take note: Period for administrative relief outside of the exchange control special voluntary disclosure programme extended

VAT rather than PAYE for non-executive directors

Budget 2017: Personal Income Tax

Does A Change Of The Terms Of A Share Constitute A New “Date Of Issue”?

UK Tax Bill Shows There’s No Need For A Sugar Rush

Get Help When Needed, But Onus To Comply Is On You

Report Back On The Sugar Tax Workshop Held By Treasury

Tax Ombud Complaints: Get Your Matter Dealt With

Contact Form

Press Office Form

Details of your business

Contact details

Company contact person