SARS RELEASES NEW RULING ON DOCUMENTARY REQUIREMENTS FOR VAT PURPOSES

In February 2015 the South Atlantic Jazz Festival (Pty) Ltd successfully appealed a judgment of the Tax Court to the Full Bench of the Western Cape High Court (reported as ABC (Pty) Ltd v CSARS [2015] ZAWCHC 8). That judgment dealt with documentary proof required by the Commissioner for SARS to substantiate input tax claims […]

DIRE PROVISIONAL TAX PENALTIES ON UNDERESTIMATION OF INCOME

Provisional taxpayers are generally those taxpayers who earn income from sources other than a salary. In other words, PAYE is not deducted from these other sources of income on a monthly basis and paid over to SARS. As is the case with PAYE, provisional tax presents a cash flow mechanism to National Treasury through which […]

TAX PENALTIES: UNDERSTATEMENT PENALTIES IN THE TAX ADMINISTRATION ACT

The Tax Administration Act, 28 of 2011, introduced the notion of ‘understatement penalties’ which are levied on a percentage based method.  The penalties are levied depending on which behaviour is exhibited by the taxpayer, to be classified in terms of the below table contained in section 223(1): 1 2 3 4 5 6 Item Behaviour […]

Transactions required to be reported to SARS in terms of the Tax Administration act

Certain transactions are required to be reported to the South African Revenue Service (‘SARS’) as and when entered into (section 37 of the Tax Administration Act, 28 of 2011 (‘the Admin Act’)).  These are referred to as ‘reportable arrangements’, and qualify as such when an ‘arrangement’ (defined as including any transaction, agreement, scheme or understanding) […]

Passive income and SARS

Have you ever investigated passive income opportunities to earn extra money? Did you consider the effect that earning additional income might have on your current income tax liability? If your income increases, whether from a passive income source or otherwise, SARS will soon come to the party to claim its share of your profits. Do […]

The calculation of interest due between taxpayers and SARS

The Tax Administration Act (TAA) introduces general principles to be applied when calculating interest due to or due by SARS. The aim is to create a fairer, more uniform calculation of interest for both the taxpayers and SARS. As with most things in life, there are exceptions. This article will discuss the general interest rules […]

Provisional tax: Did you know?

Provisional tax payments is not a separate tax but pre-payments of income tax for a specific tax year. These pre-payments ensure that the tax load is spread over the tax year and can avoid a nasty surprise when SARS calculates (assesses) the final income tax liability for that specific tax year. There are three provisional […]

The validity of Tax invoices: It is your responsibility

The audits of Value-Added Tax (VAT) returns by the South African Revenue Service (SARS), have increased the focus on the validity of tax invoices for the purposes of VAT. A VAT vendor submitting VAT returns is responsible for ensuring that all invoices included in the returns comply with the relevant legislation. If valid tax invoices […]