March 16, 2023
You could improve your return by selling the share instead of waiting for the dividend payout—but there are caveats. I was recently asked an interesting question about dividends. The person concerned was curious as to whether—from a tax and return perspective—it is better to take the dividend itself, or sell the share and take the profit prior to the dividend payout. It is therefore important to understand how the declaration and subsequent payment of a dividend impact the share price, all else being equal. The easiest way to explain how this works is through a real-life example—that of thermal coal […]
March 16, 2023
Whether you are a share trader or a long-term investor, when you make a profit, SARS will want its slice of the pie Ever since biblical times, there has been a tug-of-war between governments trying to extract as much as possible from their citizens in the form of taxes, and individuals trying to keep as much of their income and wealth away from those very same governments. In South Africa, owners of shares have not historically needed to worry too much about the tax man—especially if they considered themselves to be long-term investors. This is because any profits made when […]
March 16, 2023
SARS auditors employ methods that most people wouldn’t have even considered How does the South African Revenue Service (SARS) catch those who do not contribute their fair share to state coffers? Here are some tests that SARS auditors perform to see if you are being somewhat economical with the truth. Comparing VAT returns to your income tax return When you submit your IT14 company tax return, you are required to make certain disclosures—including your company’s turnover. But according to Mark Twain, if you tell the truth, you don’t have to remember anything. If you are cooking the books, at least […]
March 16, 2023
When operating a small business, there are so many important daily tasks to remember—especially if you are also the business owner. Your day is most likely jam-packed with numerous to-do lists and other miscellaneous tasks that need completing. When your day is filled up like this, sometimes the last thing you want to do is think about your finances. Often, a lot of business owners find this task stressful and confusing, and they don’t even know where to begin. However, organisation of your finances is key when running a small business, as it will keep you aware of your present […]
February 24, 2023
The Institute of Directors in South Africa (IoDSA) lays out five key trends for boards and directors to focus on in 2023. Boards need to begin planning their agendas for 2023 to ensure that they are on top of these trends—and that their members have the requisite skills to fulfil their duties. Short-sightedness is one of the most damaging traits in directors, so companies must ensure that directors have the knowledge and skills necessary to embrace these trends, and create a sustainable future for the company. The five disruptive trends are: Less time, more pressure Businesses have to respond fast […]
February 24, 2023
How to overcome ‘change fatigue’ and create a winning working environment Let’s be honest – we’re all tired. The truth is that fatigue is a very common feeling for most of us by the time December rolls around, as we deal with a year’s worth of pressure in addition to the demands of always being available and having to respond instantly. This has blurred the lines between our work and home life, causing a tiresome imbalance. In the workplace, our fatigue levels have been compounded by several changes that have been made since the pandemic, often implemented in haste and, […]
February 24, 2023
Condonation for the late filing of legal documentation depends on whether the interests of justice will be served by the court granting such condonation In taxpayer M v CSARS (Case Number VAT1826) heard by the Gauteng Tax court, Windell, J handed down an important decision regarding the validity of a default notice (and the resultant impact on the default judgment application) and the application of judicial precedent to the facts under consideration for condoning an application for the late filing of court documents. This article sets out the facts before the court and the applicable legal principles considered by the […]
February 24, 2023
What happens to the VAT that was paid over to SARS? Vendors often provide goods or services to clients on credit. In the current economic climate, clients are more likely to acquire goods or services on credit and may thereafter be unable to settle these debts. Other factors, for example disputes, may also result in vendors being unable or unwilling to make payment of debts. This results in the vendor having to write off this debt as ‘bad’ or irrecoverable. In this article we take a closer look at the VAT implications of bad debts. Legislative provisions The Value-Added Tax […]
December 15, 2022
The sale of a business is often a complex venture and requires consideration of various facts in examining the financial reality behind the sale. From the outset, it is important to consider historical transactions and how they may have a detrimental impact on the current sale being considered. For purposes of this article, several factors are highlighted to consider in pursuance of the sale of a business. These factors, amongst others, include: Clawback provisions of the corporate restructuring rules: These rules, as contained in sections 41 to 47 of the Income Tax Act No. 58 of 1962 (“the Act”), potentially […]