July 6, 2022

Home office expenditure

Taxpayers who are salaried employees have limited deductions available to them. However, home office expenditure can be claimed as an income tax deduction, but the onus is on the taxpayer to prove that the expenses are in fact deductible. For employment to constitute a “trade” and to qualify to deduct home office expenditure, the taxpayer should prove that the home office: Is specifically equipped for this purpose: the home office must be equipped with the necessary tools and equipment required to render the trade (desks, chairs, computers, printers, trade-specific equipment, etc.). A lounge, living room, or empty, unoccupied room will […]
July 7, 2020

Rescission of judgments by SARS: Barnard Labuschagne Inc v SARS

The judgment deals with an application for rescission of a judgment by Barnard Labuschagne (Applicant), where SARS took judgment under the provisions of chapter 11 of the Tax Administration Act (TAA). SARS filed a certified statement in terms of Section 172 of the TAA with the Registrar of the Court, setting out an amount of liquid debt due by the Applicant in respect of PAYE, VAT, UIF and SDL, and payable to SARS. The Applicant is a law practice in the Western Cape and brought an application to rescind, based on various contentions. Over an extended time, the Applicant had […]
May 11, 2020

Reviewing the record of review

In a judgment delivered on 17 February 2020, the Gauteng High Court dealt with a matter regarding a “record of review”, and its relevance relating to a review application brought by the Applicant in the matter, Medtronic International (“Medtronic”), on the refusal by the South African Revenue Service’s (“SARS”) refusal to reduce certain interests and penalties imposed on its Value-Added Tax (“VAT”) statement of account. Medtronic was the victim of large-scale fraud to the value of approximately R460 million and as a result, fell behind with its tax obligations (the payment of VAT in particular). To correct the situation, it approached […]
April 20, 2020

Tax relief amid COVID-19

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 by the government. Tax-compliant businesses with a turnover of less than R50 million will be allowed to defer (importantly, not have waived) 20% of their pay-as-you-earn liabilities over the next four months, and a portion of their provisional corporate income tax payments, without penalties or interest over the next six months. There is, however, a legal and practical difficulty in the proposed relief. Legal While President Ramaphosa and his […]
April 20, 2020

COVID-19 lockdown and SARS

President Cyril Ramaphosa declared a national state of disaster following the outbreak of COVID-19 which has also been declared a pandemic by the Word Health Organisation (WHO) on the 15th March 2020. How will the lockdown impact my taxes and PAYROLL? As part of the announcement made by President Cyril Ramaphosa the tax following relief measures were announced to assist businesses in distress due to the COVID-19 lockdown: A tax subsidy of up to R500 per month for the next 4 months for private sector employees earning below R6,500 as per Employment Tax Incentive (ETI). Details are yet to be […]
April 6, 2020

COVID-19 Relief Mechanisms

Small Business Sector Tax Relief SARS TAX RELIEF IS NOT AUTOMATIC If the company can afford the tax liability, the company is required to pay the full amount.  Proof to be provided that company is unable (due to the effect of COVID-19) to pay the liability.  Tax relief is aimed at distressed companies. Contributions to UIF and SDL Potential temporary reduction in employer and employee contributions to both UIF and SDL. Requirements are still to be confirmed. Delay of payments of taxes Relief Options Requirements PAYE liabilities Defer 20% of prospective PAYE liability over the next 4 months Turnover ≤ […]
September 27, 2019

Skenkingsbelasting

Is jou kennis genoegsaam oor skenkingsbelasting? Dink jy dalk daaraan om ń familielid finansieel by te staan, of om ń kind te help met ń deposito vir die aankoop van ‘n huis of motorvoertuig? Voor jy die transaksie aangaan is daar ń paar dinge wat jy in gedagte moet hou wanneer dit by ń skenking en skenkingsbelasting kom. Wat is skenkingsbelasting? Skenkingsbelasting is belasting betaalbaar teen ń vaste koers van eiendom wegmaking deur skenkings (artikel 54 van 64 van die Wet op Inkomstebelasting, 1962).  Skenkingsbelasting word teen ń vaste koers van 20 % gehef op die waarde van eiendom geskenk. […]
August 27, 2019

SARS dispute: What are the reasons?

Generally, disputes with the South African Revenue Service (SARS) are the result of an assessment which has been issued by SARS to a taxpayer. An assessment is the determination of an amount of a tax liability or refund, by way of self-assessment by the taxpayer (such as in the case of VAT) or assessment by SARS (such as in the case of income tax). If taxpayers are not satisfied with an assessment, the Tax Administration Act provides for dispute resolution mechanisms, in terms of which taxpayers can object to the assessment, and subsequently appeal, if objections are not maintained. Although […]
July 3, 2019

Value-Added remarks on Value-Added Tax (VAT)

VAT is an integral part of our economic society and is something that influences everyone, especially businesses in South Africa.  In this article, we will discuss a few do’s and don’ts regarding VAT. Valid tax invoices In South Africa’s current tax system, vendors that are registered for VAT are allowed a deduction for the tax they pay on eligible goods or services (input tax) from the tax you collect on the sales made (output tax). Tax invoices are therefore very important to vendors as failure to provide valid documentation during VAT audits will cause the vendor to lose all the […]
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