The South African income tax system is not cash-based. This means that a person can effectively be taxed on amounts that they have not yet received in cash, but that merely accrued to them within a year of assessment. Cash
Taxpayers’ right to have disputes resolved
In a recent Tax Court decision[1], the Tax Court confirmed that taxpayers have a right to have their disputes resolved in a court of law as enunciated in section 34 of the Constitution. However, they cannot rely on this right
SARS scams
Education and awareness around identity theft, phishing and other frauds have become part of life globally. If nothing else, scamsters are innovative and keep trying new avenues of defrauding businesses and individuals. In South Africa, this is no exception, and
Recent court case on the imposition of understatement penalties
The Supreme Court of Appeal (“ZASCA”) delivered a judgment[1] on 26 February 2019 on the imposition of understatement penalties as provided for in the Tax Administration Act[2]. In this case, the taxpayer paid provisional income tax (“IT”) of R13.8 million
Thinking of selling an asset?
What happens when you sell an asset? When you sell or dispose of an asset, you either realise a profit or a loss from the exchange. When you realise a profit, you are subject to pay capital gains tax (CGT)
Section 24 – credit agreements and debtors’ allowances
Section 24(1) of the Income Tax Act[1] deals with an agreement between a taxpayer and another person in respect of movable or immovable property. In the case of immovable property, the effect of the agreement must be that transfer of
Zero-rating of services to non-residents
South African value-added tax (VAT) vendors are often unsure of the tax consequences of issuing invoices to foreign customers or clients and whether such services should be invoiced at the standard rate of 15% or be zero-rated. As is generally
Admin penalties for outstanding Corporate Income Tax Returns
In general, all registered companies must submit corporate income tax (“CIT”) returns within 12 months of the end of the company’s financial year-end. This is applicable to all companies that are resident in South Africa, that receive source income in
Simulation
In addition to specific anti-avoidance provisions and the general anti-avoidance provisions (GAAR) in the Income Tax Act,[1] the South African Revenue Service can apply another established principle to attack the validity of transactions and arrangements, namely the common law doctrine
2018: A year in tax
As 2018 has come to an end, we reflect on some of the significant highlights (and lowlights) of the 2018 tax year. Davis Tax Committee concludes its work The Davis Tax Committee (DTC) was appointed by the Minister of Finance