What happens when debt is waived?
Many natural persons or trust shareholders in companies are confronted with the unintended tax consequences of owing an amount on a loan account to the company in which they hold those shares. These tax consequences specifically relate to the “deemed dividend” which arises on interest-free loans (related to so-called “debit loans” in companies). In many cases, there is no intention to ever repay the […]
Will SARS suspend my obligation to pay when I dispute an assessment?
With the 2020 tax filing season in full swing, many taxpayers are likely to engage in dispute proceedings as their income tax assessments are issued by SARS. This will particularly be the case where errors are contained on the so-called “auto-assessments” (which in itself is a misnomer). But what happens to the disputed tax amount until the process is finalised? Pay now, argue later The basic […]
How are foreign pensions affected by SA tax?
Although there has been an increasing trend in recent times of emigrations from South Africa, there are many projects by the Department of Home Affairs to market South Africa as a friendly retirement destination for foreigners. The question, therefore, often arises: How will foreign pensions be taxed locally once persons become tax resident. The Income Tax Act, in section 10(1)(gC), allows for an exemption of any amount received or accrued by a resident […]
Does your home office qualify you for a tax deduction?
As the old adage goes, change is as good as a holiday. But the way that the novel coronavirus has shaken up the world we live in, has, to the contrary, been extremely disruptive and stress-inducing. For many people, the disruption has come in the form of shifting from the traditional office space to working […]
Can a third party collect my taxes?
Decisions of South Africa’s courts are an essential source of law. The courts uphold and enforce the Constitution and develop common law that is consistent with the values of the Constitution, and the spirit and purpose of the Bill of Rights. In a taxation context, court decisions assist in how legislation must be interpreted or […]
The disclosing of taxpayer details
Decisions of South Africa’s courts are an essential source of law. The courts uphold and enforce the Constitution and develop common law that is consistent with the values of the Constitution, and the spirit and purpose of the Bill of Rights. In a taxation context, court decisions assist in how legislation must be interpreted or […]
For how long can your taxes haunt you?
In terms of section 99 of the Tax Administration Act, 28 of 2011, an assessment may not be made three years after the date of an original assessment by the South African Revenue Service (SARS), or in the case of a self-assessment by a taxpayers (such as in the case of a Value-Added Tax return), […]
Understanding the Diesel Refund Scheme
Farming is a qualifying activity under the Diesel Refund Scheme. Most farming enterprises will qualify to be registered for the Diesel Refund Scheme. The person carrying on the farming enterprise may, therefore, apply for registration with the Diesel Refund Scheme, provided the enterprise is registered for VAT. In terms of section 75(1C)(a)(iii) of the Customs and Excise Act 91 of […]
Do you have tax debt?
With the tax filing season for individuals now closed, taxpayers may find themselves with tax debt that is due. This may be due to administrative penalties as a result of the non-submission of tax returns, the submission of a return without payment, only partial payment or debt arising from an audit assessment. The South African […]
What happens during liquidation?
The South African Revenue Service (“SARS”) issued Binding Private Ruling 336 on 6 December 2019. In terms of this ruling, a listed resident company (“the Company”) previously granted a loan to its wholly-owned resident subsidiary (“the Subsidiary”) in order for the Subsidiary to acquire shares in the Company. The Company subsequently decided to deregister the […]
