Archive for June, 2012

Transfer pricing amendments: Do not risk a SARS audit

Certain recent amendments to the transfer pricing provisions in section 31 of the Income Tax Act No. 58 of 1962 (as amended), sound  a note of serious caution for taxpayers entering into cross-border transactions involving parties who have a relationship with each other. Transfer pricing refers to the legal provisions that govern such cross-border transactions. The rationale behind transfer pricing is to ensure that South African residents do not shift their tax liability from South Africa to another country where the tax rates are more favourable.

In short the transfer pricing rules determine that transactions between South African residents and non-residents, who have a relationship with each other, must be conducted at arm’s length. (An arm’s length transaction is defined as a transaction between two related or affiliated parties that is conducted as if they were unrelated so that there is no question of a conflict of interest.) Where such transactions are not conducted at arm’s length the South African Revenue Service (SARS) has the discretion to make an adjustment to ensure that the necessary tax is paid in South Africa as if the transaction had been concluded at arm’s length. This can, for instance, include not giving the South African entity a full deduction where goods were disposed of to a related party in a foreign country at a price that is more than the arm’s length price.

The most notable amendment to the transfer pricing provisions, which came into effect on 1st of April 2012, is that the onus now falls on taxpayers (and not SARS) to make adjustments in their tax returns where the relation-ship is not arm’s length. This means that taxpayers should decide for each transaction whether it is an arm’s length transaction or not and, based on this conclusion, make the necessary adjustments in their tax calculation. The implication is that parties will have to prove that all principles, terms and conditions of the relationship are arm’s length in nature and satisfy SARS that both parties’ daily business activities are consistent with the information presented in their annual tax return. Failure to comply with these provisions could lead to penalties and interest being charged.

This is why a transfer pricing policy document is a valuable tool, although it is not a legal requirement for taxpayers to have such a document. SARS requires certain obligations to be met in this regard:

1.    Taxpayers must disclose in their income  tax return whether they have such a  document.
2.    If the taxpayer claims to have such a document then this must be submitted  together with the tax return.
3.    Whilst the policy document need not be re-submitted every year the taxpayer  is required to keep it up to date and to     submit any such updates.

The absence of a transfer pricing policy document, together with SARS’s increasing focus on transfer pricing audits, increases the likelihood of an audit being conducted. Such an audit disrupts the taxpayer’s business and gives SARS the opportunity to scrutinise all other taxes as well (i.e. normal income tax, employees’ tax, VAT etc.).

Taxpayers should do everything possible to prevent this happening. Avoid a transfer pricing audit by getting proper documentation in place.

For advice on the compilation of a transfer pricing policy document and related matters, do not hesitate to contact Boet Lubbe on 021 840 1600 or at boet@asl.co.za.

Advertisements

Enhance your ASL experience through social networking

Social networking, i.e. the act of using the wide variety of Internet-based and mobile-based methods of communication called social media, has become almost a way of life for vast numbers of people. Did you know, for example, that the number of people using social networks worldwide is estimated to be more than 940 million?

We at Aucamp Scholtz Lubbe want to enhance our offering to our clients and friends by exploiting some of the social media technologies that are available and already used so extensively throughout the world. The following brief overview of our presence in the world of social media and social networking is therefore intended to inform about, and encourage use of, these tools for accessing the information and ideas that we want to put at your service, and for staying abreast of what is happening at our firm.

Follow the links underlined in the text for detailed information on the specific topic.

Twitter

According to Wikipedia, Twitter is an online social networking service and microblogging service that enables its users to send and read text-based posts (messages) of up to 140 characters known as “tweets”.  Twitter has been in existence for six years and has an astounding number of 140 million users who send no less that 340 million tweets per day. Read further on http://bit.ly/JVsI

Our Twitter presence intends to focus on themes such as tax in general, being an entrepreneur, managing a business, and working on your business rather than in your business.

Following is a sample of what we have tweeted in the past month:

“SARS reeling under court judgement | Fin24”
http://t.co/Va0LS9wy

“Unhealthy, Stressed Employees Are Hurting Your Business”
http://t.co/Qjb6ze0S

“No matter the time of year, it never hurts to re-evaluate your business goals.
How to give your business a perk up”
http://t.co/zidLSkG7

“SARS denies plans to target wealthy individuals”
 http://bit.ly/JKmAVC

“Checking in versus Checking up”
 http://bit.ly/KAf5Dm

“7 Solutions – Effective Delegation. Give yourself time to work on your business”
http://Ow.ly/aEn3O

“7 Ways to improve liquidity. Find out how to calculate your company’s liquidity ratio and how to improve it.”
http://ow.ly/aoEzg

To follow us on Twitter, please use this link: http://twitter.com/aslcoza. If you need more details on exactly how to use Twitter, just google “how to use twitter” and you will be surprised by the wealth of information available on the Internet on this subject.

Facebook

The owners of Facebook describe their product simply as “a social utility that connects people with friends and others who work, study and live around them.” Since the value of global friendships was determined by Facebook’s recent IPO to be in excess of $100 billion, we almost feel that further explanation isn’t necessary!  Nevertheless, to read more about this social networking service which already has a mind-boggling 900 million users, go to http://en.wikipedia.org/wiki/facebook .

Our Facebook presence intends to focus on our social involvements and our offering as a prospective employer to current students. Links are also provided to some posts on our blog. Visit our page www.facebook.com/aucampscholtzlubbe for, inter alia, some photos of social interest, some which humorously illustrate the audit process, and coverage of our recruitment initiatives at the various universities. Sign up on the page to follow us regularly on Facebook.

Blog

A blog can be described as a journal published on the Internet in the sense that it provides information that is newsworthy or of current interest. It has been reported that there are more than 180 million blogs around the world.

Our blog is essentially an online collection of all the articles that appear in our newsletter. New articles are “posted” on the blog as they appear while previous articles are kept in an archive that can be accessed at a click. Once you are on the blog you can browse or search for articles by subject category. You also have the option to provide comments on articles.

Visit our blog at http://www.asl.co.za/blog or via our website and sign up to become a follower of our posts.

Website

If you haven’t visited our recently-launched website, please do so. We’re at www.asl.co.za.

The website serves to provide a general background to who we are, the services we offer, our company ethos, our past, our present and what we intend in future. It also focuses on the individuals involved at management and director level.

THE VARIOUS SOCIAL MEDIA FACILITATE AND EXPEDITE COMMUNICATION. WHY NOT USE THESE TOOLS TO ADD AN EXCITING AND STIMULATING NEW DIMENSION TO YOUR INTERACTION WITH US?

Inkomstebelastingsertifikate: Individue

Inkomstebelastingsertifikate word tans deur mediese fondse en finansiële instansies aan individuele belastingbetalers gestuur ten opsigte van die Februarie 2012 belastingjaar. Bewaar asseblief hierdie sertifikate aangesien ons dit eersdaags van u gaan aanvra om u 2012 belastingopgawe te kan voltooi.

Income tax certificates: Individuals

Income tax certificates are currently being sent by medical aid funds and financial institutions to individual taxpayers in respect of the February 2012 tax year. Please retain these certificates as we will shortly be requesting them from you so that we may complete your 2012 tax return.

Talentvolle leerlingrekenmeesters benodig

Ons is tans besig met die werwing van leerlingrekenmeesters vir 2013. As jy oor die nodige kwalifikasie beskik, passievol is oor jou gekose beroep en graag as leerlingrekenmeester wil begin werk in ‘n aangename en ondersteunende omgewing waar die bes moontlike diensvoorwaardes in stand gehou word, hoor ons graag van jou.

Ons stel veral belang in die dienste van kandidate met tersiêre akademiese kwalifikasies soos ‘n Baccalaureusgraad in Rekeningkunde, Bestuursrekeningkunde of Finansiële Rekeningkunde, of enige toepaslike honneursgraad. Doen gerus elektronies aansoek deur na die loopbaanbladsy op ons webtuiste te gaan by http://www.asl.co.za/loopbane.html. Alternatiewelik kan CV’s gestuur word na hr@asl.co.za vir die aandag van Jana Burger. Sy kan ook met navrae behulpsaam wees.

Daar is ook van tyd tot tyd loopbaangeleenthede vir ouditbestuurders, rekenmeesters en boekhouers. Belangstellendes kan op dieselfde wyse as hierbó aansoek of navraag doen.

Onthou dat in alle gevalle verdienstelikheid vir ons die deurslaggewende aanstellingsvereiste is.

Ons bied die geleenthede as jy oor die vaardighede en toewyding beskik.

Gesonde balans word aangemoedig

Aucamp Scholtz Lubbe se gemeenskapsbetrokkenheid, soos dit onder andere uiting vind in sy borgskap van die Aanhouwen-gholfdag, het ‘n interne eweknie in sy aanmoediging van personeel om ‘n gesonde lewensbalans te handhaaf.

So het dit dan gebeur dat ons by nog ‘n sportsoort betrokke geraak het toe van die personeel besluit het om ‘n span vir die tweede gemengde liga van die plaaslike aksienetbalkompetisie in te skryf. Bestuur het hierdie inisiatief gretig ondersteun en ‘n finansiële bydrae gemaak tot die aanskaf van gepaste sporthemde.

Die span van sewe het hulleself die naam Kamikaze toegeëien. (Hulle hou vol dat met hierdie keuse hulle die klem laat val het op die durf en waagmoed van die bekende Kamikaze-konsep uit die Japanse deelname aan die Tweede Wêreldoorlog, en nie op die gepaardgaande selfmoordgedagte nie!) Hierdie versekering het hulle dan ook gestand gedoen deur, soms teen uiters strawwe kompetisie, deur te dring tot die semi-finaal en derde in die liga te eindig.

Die dameslede van die span, wat reeds die vorige jaar begin het om aksienetbal te speel, het die inisiatief geneem om vanjaar hul manlike kollegas nader te trek en rapporteer dat hulle baie pret gehad het. Die manne het dit blykbaar moeilik gevind om die voetfoutreël baas te raak en die dames reken Niel Immelman moes eintlik ‘n prys ontvang het vir sy pogings in hierdie verband. Dit was glo koddig om te sien hoe hy, elke keer as hy die bal ontvang, blitsig na die skeidsregter kyk om seker te maak of sy hom nie vir ‘n voetfout gaan straf nie!

Pret en gesonde liggaamlike oefening is ‘n uitlaatklep vir die stres wat onvermydelik deur ander lewenservaringe, ook dié in die werksituasie, meegebring word. Die positiewe terugvoer oor hul netbalervaring wat van die spanlede ontvang is, bevestig opnuut die waarde van die firma se verbintenis tot die bevordering van balans in die lewens van sy personeel.


Follow ASL on Twitter

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 10 other followers

Advertisements