March 4, 2020

Are my donations being taxed?

BPR 338 deals with the tax treatment of payments made to a Public Benefit Organisation (PBO) at a fundraising event, under section 30 of the Income Tax Act. The ruling is essentially an interpretation of section 18A of the Act and seeks to clarify the situation for PBOs and funders. In terms of the transaction, the Applicant (a resident company registered as a PBO) will host an event for the explicit purpose of fundraising, but this event will be managed by a third-party events management company. As is commonplace, persons attending the events will make payments to participate in activities […]
February 5, 2020

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), five years after the date of an original assessment. These periods are generally referred to as the prescription rules and are in place to ensure that finality is eventually brought to a tax period. Essentially, therefore, the prescription rules provide that tax periods do not […]
February 5, 2020

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 1964 (the section): “the Commissioner may investigate any application for a refund of such levies on distillate fuel to establish whether the fuel has been… (iii) delivered to the premises of the user and is being stored and used or has been used in accordance […]
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 […]
February 5, 2020

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 Subsidiary. In order to affect the deregistration, the Subsidiary proposed to, in anticipation of its deregistration, distribute all its assets (the Company shares) to the Company as a dividend in specie and as a liquidation distribution as contemplated in section 47 of the Income Tax Act.[1]  In […]
January 23, 2020

Taxation of foreign employment income

South Africa has a residence-based tax system, which means residents are taxed on their worldwide income, regardless of where that income was earned.   South African tax residents living overseas and earning remuneration in respect of services rendered outside of South Africa are exempt from tax in South Africa, provided that the individual is outside of South Africa for a period or periods exceeding 183 full days (60 of which have to be continuous days of absence), during any 12 month period.  There is currently no limitation on the foreign employment income exemption.  From 1 March 2020, the first R1 million earned from foreign service income will be exempt from tax in South Africa, provided more than 183 days are spent outside […]
January 23, 2020

Valuation of trading stock for tax purposes

On 27 September 2019, just over a year since delivering judgement in another matter with very similar facts, the Supreme Court of Appeal in CSARS v Atlas Copco South Africa (Pty) Ltd (834/2018) [2019] ZASCA 124 gave a judgement on the valuation of trading stock for income tax purposes.   The general (and oversimplified) principle is that taxpayers are allowed, as a deduction, the value of opening trading stock during a year of assessment, while the value of the closing trading stock is required to be included in taxable income. From a tax perspective, the higher the value attributed to closing stock at the end of a tax year, the lower the cost of sales for that […]
September 27, 2019


Is jou kennis genoegsaam oor skenkingsbelasting? Dink jy dalk daaraan om ń familielid finansieel by te staan, of om ń kind te help met ń deposito vir die aankoop van ‘n huis of motorvoertuig? Voor jy die transaksie aangaan is daar ń paar dinge wat jy in gedagte moet hou wanneer dit by ń skenking en skenkingsbelasting kom. Wat is skenkingsbelasting? Skenkingsbelasting is belasting betaalbaar teen ń vaste koers van eiendom wegmaking deur skenkings (artikel 54 van 64 van die Wet op Inkomstebelasting, 1962).  Skenkingsbelasting word teen ń vaste koers van 20 % gehef op die waarde van eiendom geskenk. […]
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