June 5, 2024

The Tax Treatment of Relocation Expenses

Transferring staff?  There are tax implications for them … and for you! If your business has branches in different locations, one of the best ways of offering key staff opportunities for career growth is to allow them to relocate. Relocating an existing staff member who has come to know and understand your systems, procedures, and how you do business is often preferable to hiring a new person from outside, who perhaps does not have the benefit of such exposure. While many staff members may wish to relocate for personal or lifestyle reasons, it is often the employer itself that requests […]
January 18, 2024

Beware of Tax-Related Scams

Over the past five years, the SAFPS has seen a steady increase in the number of tax-related scams. Improved efficiency To improve efficiency when it comes to processing tax returns, and to encourage individuals and businesses to file their tax returns timeously, SARS launched its eFiling service in 2000. This allows taxpayers to file their returns electronically. Unfortunately, this provided scammers with increased opportunities to turn taxpayers into fraud victims. Fraudsters use a very focused modus operandi when running this scam. In the weeks following the tax deadlines, taxpayers will typically receive an SMS informing them that they have yet […]
October 19, 2023

Unforeseen tax debt from crypto trading

Landing in a position of indebtedness to SARS can be quite a stressful journey on its own ─ but if you forget to leave room in your suitcase for the tax on your crypto profits or gains, the destination becomes all that more daunting. If you have engaged in crypto trading, even as a hobby, not knowing the underlying tax obligations may just take you to your final (unpleasant) destination! What is a crypto asset? The Taxation Laws Amendment Act 23 of 2020 concretised the classification of a ‘crypto asset’ ─ which, according to SARS, can be described as “a […]
June 28, 2022

Individual filing opening

Taxpayers, your turn to file your tax return started on 1 July this year. The good news is that a significant number of individual taxpayers will be auto-assessed again this year, and this process will start in July.  No need to call us, we will send you an SMS if you are selected to be auto-assessed.  However, we have made it much easier this year. When you receive the SMS, log into eFiling or MobiApp to view your assessment. If you agree with the assessment there is nothing more to do – if a refund is due, we will pay […]
March 9, 2022

How to become a DTMC

In 2013, the South African government introduced the Domestic Treasury Management Company (DTMC) regime to allow South African companies that are registered with the Financial Surveillance Department (FinSurv) of the South African Reserve Bank (SARB) to expand into the rest of Africa and abroad. The DTMC Regime, in essence, allows unlisted companies to establish one subsidiary within the group as a DTMC, not only to hold offshore operations for foreign direct investment purposes but also domestic treasury management operations, without being adversely restricted by the exchange control regulations of the SARB. Incorporating a DTMC allows South African groups to avoid having […]
January 26, 2022

Retirement saved from controversial tax proposal

When an individual ceases to be a South African tax resident prior to retirement from a South African retirement fund and becomes tax resident of another country, that individual’s interest in a retirement fund may, on payment of a lump sum or monthly pension, be subject to tax in the other country. The application of a tax treaty between South African and the country of tax residence may, in some instances, result in South Africa forfeiting its taxing rights – while the taxpayer benefited from tax concessions for contributions. Taxpayers who remain residents, only have access to their retirement interest […]
January 26, 2022

Is your disclosure “voluntary”?

In December 2021, the Supreme Court of Appeal (SCA) handed down a judgment dismissing an appeal against a decision of the Tax Court. The issue before the SCA was whether the South African Revenue Services (SARS) was correct in rejecting Purveyors South Africa Mine Services (Pty) Ltd’s (Purveyors) Voluntary Disclosure Programme application (VDP application) for non-compliance with the requirements for VDP relief, more specifically on the ground that it was not made voluntarily. In 2015, Purveyors entered into a dry lease agreement, in respect of an aircraft registered in the United States of America. Purveyors entered into an aircraft management […]
November 15, 2021

Marriage may finally become equal for all

Being a person’s spouse could have varying tax consequences, particularly where they are married in community of property. Currently, for income tax purposes, you are deemed to be a person’s spouse in the following instances: (a)  A person who is in a marriage or customary union recognised in terms of the laws of the Republic;  (b)  A person who is in a union recognised as a marriage in accordance with the tenets of any religion; or  (c)  A person who is in a same-sex or heterosexual union which is intended to be permanent…” In May this year, Government published a Green Paper on marriage […]
November 15, 2021

Tax costs of barter transactions

Barter transactions are commonplace in today’s commercial environment. Parties exchange goods or services without a cash transaction underpinning it. The question is, “What happens when I sell the asset in future? Do I have a tax cost for it?” Paragraph 20(1)(a) of the Eighth Schedule to the Income Tax Act refers to ‘the expenditure actually incurred in respect of the cost of acquisition or creation of that asset’. The word ‘expenditure’ includes expenditure in cash or in kind. In ITC 1783 the court established the following about the meaning of the word ‘expenditure’: “Expenditure” in its ordinary dictionary meaning is the spending of money or its equivalent e.g. time or labour and a […]
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