Archive for the 'SARS' Category

Tax clearance certificates

Untitled-7A tax clearance certificate (TCC) is a document issued by SARS confirming that the applicant’s tax affairs are in order.

TCCs are required for tender applications, to reflect “good standing”, for foreign investment, and for emigration purposes.

The Tax Administration Act, which came into effect on 1 October 2012, contains requirements and time frames for the issue of tax clearance certificates. SARS has also issued guidelines in this regard.

TCCs pertaining to tenders and “good standing” are of particular importance for many of our clients since these TCCs are often required by businesses in order to bid for a tender or render a particular service. Following is a brief overview of the application process and requirements relating to these two types of TCC.

In any application for a TCC, for whatever purpose, the reason for the application must be properly stated. The TCC is only valid for one year from the date of issue, provided the taxpayer remains compliant with SARS requirements. The proviso confirms that SARS is entitled to withdraw a TCC at any time if it was issued in error or if it was obtained on the basis of fraud, misrepresentation or non-disclosure of material facts.

SARS requires certain conditions to be met before a TCC is issued. These conditions are that:

  • the taxpayer must have registered for income tax prior to applying for a TCC;
  • the taxpayer should have no outstanding debt for any taxes (including income tax, Value Added Tax (VAT), dividend tax, administrative penalties and employees’ tax);
  • any deferred arrangements made are being adhered to;
  • all returns and/or declarations are up to date and in the process of being assessed by SARS;
  • all tax reference numbers must be active and correct, e.g. the tax reference number must not be deregistered or suspended on the SARS system; and
  • the registration details on the application form (TCC-001) must correspond with the information on the SARS system.

It is important to bear in mind that SARS has 21 business days following the submission of an application to issue or decline a TCC and that, to be on the safe side if one is in a hurry, the full period should be allowed for. It goes without saying that, to avoid an application being declined, one should be 100% sure that one’s tax affairs are indeed in order before applying for a TCC.As we are dealing with these applications on a regular basis we invite you to contact our Tax Compliance Department at tax@asl.co.za if you have any queries about TCCs, or if you wish to submit an application for a TCC.

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SARS going fishing?

Untitled-6In an article in Business Day of 16 May 2013, Evan Pickworth refers to “Open-ended fishing expeditions by the South African Revenue Service (SARS)”, and we can certainly identify with all he said.

Aside from the issues raised in the article we have experienced an increased tendency by SARS to approach our clients directly, without first approaching us as the tax practitioner representing the client. Unfortunately this practice is not following set rules since in some instances we receive copies of correspondence, while in other instances the first we hear about any SARS correspondence is the concerned and sometimes traumatic calls and emails we receive from clients when approached directly by SARS.

We can testify that SARS has placed much emphasis on collections, sometimes even raising the threat of legal action with taxpayers while payments have not yet fallen due or are still being / could still be disputed.

We realise that this state of affairs might cause uncertainty and undue concern with our clients and therefore invite you to forward any SARS correspondence to our Tax Compliance Department at tax@asl.co.za for verification and follow-up.

We will advise you whether any amount is in fact due, and request you to be patient while we deal with the matter.

Taxation of trusts and a look into the crystal ball

27 February 2013 – the day on which the Rubicon was crossed as far as the taxation of trusts is concerned.

Although not much was said, we heard enough in Minister Pravin Gordan’s budget speech that day to know that things are about to change. At stake is the conduit principle that is currently applied with regard to trusts and which ensures that income earned retains its nature when redistributed. In terms of proposals made in the budget speech, the conduit principle might fall away.

While we expect draft legislation to be published sooner rather than later, we thought it prudent to explain the anticipated changes in basic terms by means of an example:

Mr A’s family trust realises capital gain of R1 000 000 and interest income of R100 000 in the current year of assessment. He is 58 years of age, has no other taxable income in his personal capacity, and he has four grandchildren. We have already established that the trust will be distributing income to these five individuals (Mr A and his four grandchildren), to achieve maximum tax efficiency.

  • Scenario 1 – Conduit principle in effect. Capital gain and interest income is distributed equally between all five individuals, and all are taxed based on this distribution.No capital gains tax or income tax will be applicable, due to the utilising of exempt portions of interest received and capital gains.
  • Scenario 2 – Conduit principle no longer applies. Same amount distributed but now as normal income.R156 640 tax due in total and payable to SARS by the five individuals.

Conclusion

The consequences of the proposed change are far-reaching. If you are aware of a possible transaction in the foreseeable future involving a trust, that will result in capital gains or other income that is out of the ordinary, please contact your relationship director as a matter of urgency to enable us to plan properly before the event occurs.

Further developments around this matter will be covered in our newsletter in the coming months.

Source: Arnold Scholtz                                                         

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Capital gains tax on donations and bequests

ASL_CapitalParagraph 12(5) of the Eighth Schedule to the Income Tax Act was scrapped on 1 January 2013 and replaced with a new paragraph 12(A) which, in certain circumstances, provides relief on the payment of capital gains tax when debt is written off.

These new provisions came into effect on 1 March 2013.

In terms of these changes capital gains tax is still payable when a debt of a debtor is reduced or written off, but that there are two exceptions:

  1. Where the amount owed to a deceased estate is regarded as the “property” of the estate (as described in the Estate Duty Act), and this debt is reduced to the benefit of the legatee or heir; and
  2. When the debt that is written off can be regarded as a donation for the purposes of donations tax.

The relevant amendments to the law therefore determine in essence that:

  • It is no longer required that a donation be made in cash; and
  • there will be no liability for capital gains tax if the donation represents a reduction or writing off of debt for the receiving party.

The latter provision is especially to be welcomed considering the problems that have occurred in the past with the wording of wills in cases where heirs or a family trust owe a loan debt to a testator. It is now again possible to merely bequeath a loan account between a legator and a trust as a legacy to the trust, which amounts essentially to the reduction of a debt obligation of the trust.

In view of these recent changes to the Income Tax Act we once again encourage clients to make a donation in order to ensure a saving in estate duty in the longer term.

To make the most of the benefits of a donation the following should be borne in mind:

  • The donation should not exceed R100 000 otherwise donations tax of 20% is levied on the amount by which the tax-free limit (R100 000) is exceeded;
  • A book entry can simply be made in the place of a cash donation; and
  • The donation must be supported by a written deed of donation and, where a trust is the beneficiary, also a resolution of the trustees indicating acceptance of the donation.

Untitled-2For further information in this regard or for assistance with making a donation, please get in touch with Sonja Viljoen (sonjav@asl.co.za) at our office.

Tax on retirement annuity contributions: Changes forthcoming!

At present up to 15 per cent of non-retirement funding income can be invested in Retirement Annuities (RA) and deducted from taxable income.

This limit is set to increase as from 1 March 2014. Although final legislation in this regard is still awaited, it has been proposed that persons will be able to claim a deduction of up to 27, 5 per cent of taxable income, with an annual limit of R350 000. This will apply to contributions made to all funds, e.g. an RA fund as well as an occupational pension fund.

In his recent budget speech the Minister of Finance also proposed other changes to retirement savings. Details will be communicated to our clients as soon as there is certainty about all the proposed changes.

These developments on the tax front are brought to the attention of clients in good time so that they may be taken into account in their retirement planning.

For more detailed information in this regard or for advice on your retirement planning, don’t hesitate to get in touch with one of the directors.

Let our payroll service ease your burden

In the experience of most employers, proper and efficient payroll administration is an activity that often does not receive adequate attention and makes heavy calls on the time of valuable human resources. For this reason Aucamp Scholtz Lubbe has for several years been operating a salary bureau which aims to relieve employers of this burden and give them peace of mind by providing an all-inclusive payroll service.

This service, which is accurate, punctual and confidential and can be tailored to suit your particular needs, includes the following:

  • Weekly or monthly processing of salaries and wages in accordance with applicable tax requirements, taking into account all allowances, contributions and deductions;
  • Printing and issuing of salary advices and registers which adhere to legal requirements;
  • Issuing of employee tax certificates (IRP5s);
  • Annual and bi-annual reconciliations of earnings and employees’ tax deducted, as required by the South African Revenue Service; and
  • Providing advice on unemployment insurance.

Payroll administration is not a core function of any business. You should be able to focus your attention and that of your staff on the purposes for which your business was established and not worry about whether the payroll will be on time.

Let us assist you to achieve this by taking over the burden of your payroll administration. The cost is relatively small and you will be joining some very satisfied clients.

For more information or to obtain a quotation for this service, contact the director responsible for your affairs, or Jaco van Straaten.

Kapitaalwinsbelasting op skenkings en erflatings

ASL_KapitaalParagraaf 12(5) van die Agste Bylae van die Inkomstebelastingwet is op 1 Januarie 2013 geskrap en vervang met ‘n nuwe paragraaf 12A wat in sekere omstandighede verligting gee vir die betaling van kapitaalwinsbelasting op die afskrywing van skuld.

Hierdie nuwe bepalings het op 1 Maart 2013 in werking getree.

Die wysiging bepaal dat daar steeds kapitaalwinsbelasting betaalbaar is wanneer ‘n skuld van ‘n skuldenaar verminder of afgeskryf word, maar dat daar twee uitsonderings is:

  1. Waar die bedrag verskuldig aan ‘n bestorwe boedel as die “eiendom” (soos in die Boedelbelastingwet omskryf) van die boedel beskou word en dit tot voordeel van ‘n legataris of erfgenaam verminder word; en
  2. Wanneer die skuld wat afgeskryf word as ‘n geskenk vir die doeleindes van skenkingsbelasting geklassifiseer kan word.

Die betrokke wetswysigings bepaal dus in wese dat:

  • dit nie meer nodig is om ‘n skenking in kontant te maak nie; en
  • geen aanspreeklikheid vir kapitaalwinsbelasting sal ontstaan as die skenking ‘n vermindering of afskrywing van skuld by die ontvangende party is nie.

Laasgenoemde bepaling is veral te verwelkom gesien die probleme wat tot nog toe geskep is met die bewoording van testamente in gevalle waar erfgename of ‘n familietrust lenings aan testateurs verskuldig is. Dit is dus nou weer moontlik om ‘n leningsrekening tussen die erflater en ‘n trust bloot as ‘n legaat aan die trust te bemaak, wat dus in wese neerkom op die vermindering van ‘n skuldverpligting van die trust.

In die lig van hierdie onlangse wysigings aan die Inkomstebelastingwet moedig ons kliënte opnuut aan om ‘n skenking te maak ten einde op die langer termyn ‘n besparing in boedelbelasting te verseker.

Om die voordele van ‘n skenking ten beste te benut moet die volgende in gedagte gehou word:

  • Die skenking moet nie R100 000 te bowe gaan nie anders word skenkingsbelasting teen 20% gehef op die bedrag waarmee die maksimum belastingvrye perk (R100 000) oorskry word;
  • Daar kan bloot ‘n boekinskrywing gemaak word in die plek van ‘n kontantskenking; en
  • Die skenking moet gerugsteun word deur ‘n skriftelike skenkingsakte en, waar ‘n trust die begunstigde is, ook deur ‘n resolusie van die trustees ter aanvaarding van die skenking.

Untitled-2Vir verdere inligting of advies in hierdie verband of vir hulp met die maak van ‘n skenking kan daar met Sonja Viljoen (sonjav@asl.co.za) van ons kantoor geskakel word.

Budget proposals 2013/2014

The Minister of Finance, Pravin Gordhan, delivered his budget speech on 27 February 2013 and, other than expected, tax rates were (fortunately) not increased. On the face of it the tax proposals should not have a substantial impact on our clients but, as has often happened in the past, there will probably be law amendments later which will have an effect on the taxpayer.

We are not at present going to provide detailed commentary on the tax proposals but will, as and when more certainty about these proposals is gained in the course of the year, communicate with our clients about aspects thereof that may have an influence on their tax affairs.

The following link can be used to peruse the tax tables for the 2013/2014 tax year and also to read more about the tax proposals.

Should you be uncertain about the effect of the budget proposals on your tax liability, you are welcome to get in touch with your relationship director.

ASL_Tax guide

Click here to download

the Tax guide.

 

Begrotingsvoorstelle 2013/2014

Die Minister van Finansies, Pravin Gordhan, het op 27 Februarie 2013 sy begrotingsrede gelewer en, anders as wat verwag is, is die belastingkoerse (gelukkig) nie verhoog nie. Op die oog af behoort die begrotingsvoorstelle nie ‘n wesenlike impak op ons kliënte te hê nie, maar soos dikwels in die verlede, sal daar sekerlik later wetswysigings plaasvind wat ‘n effek op die belastingbetaler sal hê.

Ons gaan nie nou in besonderhede op die begrotingsvoorstelle kommentaar lewer nie maar sal in die loop van die jaar, na gelang daar meer sekerheid oor die voorstelle kom, met ons kliënte kommunikeer oor aspekte daarvan wat ‘n invloed op hul belastingsake mag uitoefen.

U kan die volgende skakel gebruik vir insae in die belastingtabelle vir die 2013/2014- belastingjaar en ook om meer oor die begrotingsvoorstelle te lees.

Indien u enige onsekerheid het oor die effek van die begrotingsvoorstelle op u belastingaanspreeklikheid, is u welkom om met u verhoudingsdirekteur te skakel.

ASL_Tax guide

Kliek hier om die

 BELASTINGGIDS af te laai.

Betalingsverwysings vir elektroniese betalings aan die SAID

Ons vind toenemend dat foutiewe betalingsverwysings gebruik word wanneer elektroniese betalings aan die Suid-Afrikaanse Inkomstediens (“SAID”) gemaak word.  Omrede die SAID dan die betaling na die verkeerde belastingtipe allokeer kan daar soms rente en boete gehef word omdat die betaling wat oorspronklik bedoel was, te laat teen die korrekte belastingtipe gemaak word.

‘n Goeie voorbeeld is die geval waar die verwysing vir aangeslane belasting gebruik word wanneer voorlopige belasting betaal moet word.  As die belastingpligtige in daardie stadium geen uitstaande bedrag op sy/haar aangeslane rekening het nie, word die deposito na die belastingpligtige teruggestuur omdat die SAID nie bewus is dat die betaling eintlik vir voorlopige belasting bedoel is nie. Die voorlopige belastingrekening wys dan steeds ‘n uitstaande balans en boete en rente word gehef.

Hieronder is ‘n lys van die verskillende tipes belasting se rekeningname op die banke se internetblaaie en die formaat van die spesifieke  19-karakter betalingsverwysing wat gebruik moet word.

Daar is ook elektroniese betalingsfasiliteite vir Dividendbelasting, Dieselbelasting en Aksyns.

Skakel gerus met ons Belastingafdeling (tax@asl.co.za) indien u meer besonderhede sou benodig.

 


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