Tax Administration Act Archives - T Roos | Dynamic Tax and Accounting Firm

September 8, 2017

Published by Admin at September 8, 2017

TREASURY MOVES TO CLOSE CGT AVOIDANCE LOOPHOLE THROUGH SHARE BUYBACKS

Where one company previously sought to dispose of its shares in another company, it was able to do so without incurring an exposure for capital gains tax (“CGT”) or dividends tax, if that disposal were structured as an issue of shares by the target company to the “purchaser”, followed by a corresponding buyback of shares by the target company from the “seller”. For example: Company A holds 50% of the shares in Company X (which stake is worth R500,000). A had acquired the 50% interest for R50. B approached A with an offer to purchase the 50% for R500,000. A […]

March 17, 2016

Published by Admin at March 17, 2016

TAX PENALTIES: UNDERSTATEMENT PENALTIES IN THE TAX ADMINISTRATION ACT

The Tax Administration Act, 28 of 2011, introduced the notion of ‘understatement penalties’ which are levied on a percentage based method. The penalties are levied depending on which behaviour is exhibited by the taxpayer, to be classified in terms of the below table contained in section 223(1): 1 2 3 4 5 6 Item Behaviour Standard case If obstructive, or if it is a ‘repeat case’ Voluntary disclosure after notification of audit or investigation Voluntary disclosure before notification of audit or investigation (i) ‘Substantial understatement’ 10% 20% 5% 0% (ii) Reasonable care not taken in completing return 25% 50% 15% […]