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CorporateThe Tax Disputes and Litigation ReviewTuesday, March 18, 2014 09:17:00
With effect from 1 October 2012 the administration provisions of the various tax acts were moved to a new act, called the Tax Administration Act, 2012. The Tax Administration Act basically sets out the South African Revenue Service (SARS) and the taxpayer's obligations and entitlements.
The drafting of the Tax Administration Act was announced by the Minister of Finance in the 2005 Budget Review, and eventually promulgated on 4 July 2012. In terms of the law that has created SARS, (i.e., the South African Revenue Service Act) SARS's objectives include the efficient and effective collection of taxes. Tax legislation, such as the Tax Administration Act, seeks to achieve this objective.
CorporateSouth Africa’s VAT changes: The impact on e-commerceWednesday, March 12, 2014 10:16:00
The buying and selling of services over the internet has become ubiquitous. This article provides an update on the efforts of the South African Revenue Service ('SARS') and National Treasury ('Treasury') to bring foreign e-commerce suppliers on to a level tax playing field, by requiring them to register under the Value- Added Tax Act 1991 ('the VAT Act').
In South Africa, it is usually the case that an entity selling goods or services will (i) be charged VAT (normally at a standard rate of 14%) on its inputs by its suppliers, (ii) charge VAT on its outputs to its customers, and (iii) will have to register with SARS in order to claim back the tax paid in step (i) and pay over the tax collected in step (ii).
CorporateTransfer pricing audits put the squeeze on in AfricaWednesday, March 12, 2014 10:03:00
The African Tax Administration Forum has identified transfer pricing as a critical issue for African tax administrations and has undertaken several initiatives to improve co-operation between the administrations to police the issue. In SA, the South African Revenue Service (SARS) has also significantly increased its focus on transfer pricing and regularly undertakes transfer pricing audits with a very capable transfer pricing team.
SARS applies the Organisation for Economic Co-operation and Development (OECD) Guidelines on Transfer Pricing to determine the appropriate transfer pricing policy for a multinational enterprise operating in SA.
CorporateTransfer pricing a critical issue for African tax administrationsFriday, January 10, 2014 14:51:41
The African Tax Administration Forum has identified transfer pricing as a critical issue for African tax administrations and has undertaken several initiatives to improve co-operation between the administrations to police transfer pricing. In South Africa, the South African Revenue Service (SARS) has also significantly increased its focus on transfer pricing and regularly undertakes transfer pricing audits with a very capable transfer pricing team. SARS applies the Organisation for Economic Co-operation and Development (OECD) Guidelines on Transfer Pricing to determine the appropriate transfer pricing policy for a multinational enterprise operating in South Africa.
CorporateImage Rights: It’s Time for Clarity and CertaintyMonday, November 25, 2013 15:53:00
The tax treatment of image rights is contentious in many countries, South Africa included. Lionel Messi the hero of Spanish football, recently paid €5m to the tax authorities after he had been charged with tax evasion in respect of the sale of the commercial rights to use his image, autograph and name ( “image rights”). The charges arose from the income from the sale of Messi’s image rights to offshore companies. The perceived value of image rights was also rumoured to be an important aspect of the talks surrounding Gareth Bale’s record breaking transfer from Tottenham Hotspur FC to Real Madrid. In the UK it has been reported that several football clubs in the Premier League have settled disputes with HM Revenue and Customs (*HMRC) regarding the taxation of image rights.
CorporateThe new double tax agreement between South Africa and Mauritius - What is the effect on business?Monday, October 14, 2013 10:17:00
The news of the revised double tax agreement between South Africa and Mauritius (“the new DTA”) on Monday, 27 May, rang alarm bells for both Mauritian companies investing into South Africa as well as for South African companies expanding offshore via Mauritius. What are these changes and how will they impact on the use of Mauritian companies for investment by non-residents into South Africa, or for foreign investment by South Africans?
CorporateEuromoney Tax Handbook 2013Thursday, September 26, 2013 09:52:00How is South Africa responding to growing concerns about base erosion?
South Africa, influenced by international tax developments, has proposed new measures that seek to address perceived base erosion problems, whilst at the same time it tries to position itself as a 'Gateway to Africa'. From a tax policy perspective, base erosion becomes a concern for national tax authorities when gaps in the interaction of different tax systems, or the application of bilateral tax treaties, allow for income from cross-border activities to result in either non-taxation or unduly low taxation. The term 'base erosion' includes tax evasion, tax avoidance, tax underestimation and population flight.
CorporateTax considerations for oil, gas and mining companies in AfricaTuesday, July 16, 2013 14:26:55
Africa is rich in mineral resources, offering substantial opportunities in mining, oil and gas. Potential investors in these sectors have shown an interest in using South Africa as a gateway for investing into Africa, one of the reasons being South Africa’s good tax treaty network with other African countries, as well as major European and Asian countries.
CorporateSouth Africa as a base for expansion into Africa?Wednesday, June 19, 2013 11:02:00
Africa is the cradle of humanity yet it is only now, in the early years of the twenty-first century, that it is truly taking its place amongst the economic community of nations. With 60% of the world's uncultivated arable land, 1 billion people and abundant natural resources, Africa is rich in opportunities and potential. Currently home to seven out of ten of the world’s fastest growing economies, this exciting continent’s outlook is promising. The International Monetary Fund (IMF) predicts that no other continent will compete in growth in the near future and, with 70% of its population under the age of 35, Africa will enjoy extraordinary demographic dividend as their energy and talents drive economic growth and development.
CorporateSARS appointment of retirement funds as tax agents creates dilemmaWednesday, March 06, 2013 17:35:00
The appointment of retirement funds by the South African Revenue Service (SARS) as tax agents is creating a dilemma for funds trying to balance their fiduciary responsibilities towards members with the obligation of being appointed as a tax agent. Johan Kotze, Head of Tax Dispute Resolution at leading pan-African legal services group Bowman Gilfillan explained: “Many retirement funds are currently receiving tax agency appointment letters from SARS requesting funds to deduct outstanding tax from members’ pension, and to pay it over to SARS”. Johan Esterhuizen, Partner in the Pension Practice Group at Bowman Gilfillan, noted that appointments create a dilemma because the fund, the administrator and the trustees have to balance their fiduciary responsibilities towards the member with the obligation of being appointed as a tax agent.”
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