October 24, 2022

Lenders of money are not all ‘money lenders’

Taxpayers’ actions need to back up what they claim to be In many groups of companies, intra-group loans make sense as a way of funding the operations of the group. If the funds are sourced from outside the group by a borrower entity and then on-lent to other companies within the same group as the borrower, the question is whether the interest incurred by the borrower entity is deductible in terms of section 24J(2) of the Income Tax Act No 58 of 1962 (the Tax Act)? This question was once again considered in Taxpayer H v Commissioner of the South African […]
October 14, 2022

Travel claims, but no allowance?

For commission-earners and the self-employed, the rules are slightly different—but travel costs can be claimed. The common mistake that I make when writing articles about travel allowances is that I tend to forget that not all of us are ‘wage slaves’.  Indeed, there are many taxpayers for whom the saying, “If a man will not work, he shall not eat” is a daily reality—those who are self-employed, as well as those who derive their earnings from commission. But the very fact that they don’t earn a regular salary means that they also do not receive a fixed travel allowance.  And […]
October 14, 2022

Beware the ‘Ides of SARS’

Telephonic audits are on the rise “A soothsayer bids you beware the ides of March”.  These famous Shakespearean words forewarning the misfortune of Roman emperor Julius Caesar (which Caesar ultimately ignored and led to his demise) may not be as archaic as appears at first sight—especially in the realm of tax, and when SARS’ new ‘audit strategy’ is considered. In recent months we have seen a substantial spike in SARS contacting taxpayers directly (even with the appointment of a registered tax practitioner or legal representative), either telephonically, or via email correspondence, seeking additional information / confirmations from the taxpayer. A […]
March 9, 2022

How will the 2022 budget changes affect you?

The annual National Budget Speech was delivered on 23 February 2022 by Finance Minister Enoch Godongwana. Practitioners are getting to grips with some of the more pertinent changes that will become a reality for taxpayers, particularly in the individuals, employment and savings areas. Reviewing the timing of accrual and incurral of variable remuneration Section 7B of the Income Tax Act (1962) allows for the taxation of variable remuneration to be deferred to the date when the amount is paid to the employee rather than when it accrues to the employee. The act provides that any amount of variable remuneration paid […]
April 19, 2021

Arbitrary practices by SARS when issuing assessments

The Tax Administration Act provides for the audit and verification of taxpayers’ tax returns for all taxes administered by the Commissioner for the South African Revenue Service (SARS). In many instances, such requests for information are general, boiler-plate letters received by taxpayers, not indicating specifically what additional information SARS requires in the circumstances and which supporting documents must be provided. In recent times, in respect of both income tax and value-added tax, SARS has taken an arbitrary approach in issuing additional assessments based on information provided by taxpayers in response to the inadequate (or vague at best) requests for information. Income […]
December 11, 2020

Emigrating while retaining your property?

The exodus of South Africans to foreign jurisdictions has been well publicised, and due to this, much has been written about the so-called “exit tax” that applies when one ceases to be a tax resident in South Africa, as well as matters relating to foreign employment income earned. However, what is often overlooked is what happens when you emigrate but retain your home in South Africa. The general principle is that when you cease to be a South African tax resident, your home (constituting immovable property in South Africa) will not be subject to the “exit charge”, since that immovable property always remains a […]
June 3, 2020

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 confirm the rights and obligations of taxpayers and the South African Revenue Service alike. One, therefore, cannot appreciate the tax landscape, without having regard for the decisions of our courts. In the case of the Commissioner for SARS vs Public Protector (23 March 2020) in […]
February 5, 2020

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 Revenue Service (“SARS”) provides assistance to taxpayers in managing their tax debt. As an initial phase, SARS will remind taxpayers of the amount of tax due before the due date. This is done by way of an assessment with the relevant due date indicated thereon […]
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 […]
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