Provisional tax penalties and how to avoid them

Posted on 23 of October, 2018 by in Tax

All individual taxpayers who earn income from sources other than remuneration from an employer, must submit provisional tax returns twice a year. Let’s have a look at the most common penalties provisional tax payers face and how to avoid them. Under estimation penalty The major challenge with provisional tax is the need to estimate your […]

Income tax: Deduction of medical expenses

Posted on 25 of January, 2018 by in Tax

An individual’s ability to pay tax may be adversely affected by costs incurred as a result of illness or disability. For this reason, a certain degree of relief is provided by the Income Tax Act No.59 of 1962 (the Act). Timing of Deduction Qualifying medical contributions and expenses may only be claimed in the tax […]

Employment Tax Incentive: Why say no to R1280 per month per qualifying employee

Posted on 13 of October, 2017 by in Tax

What is it? ETI is a tax incentive awarded to qualifying employers aimed at encouraging employers to employ employees between the ages of 18 to 29. It is a temporary programme covering only the first two years of employment. The ETI commenced on 1 January 2014 and will end on 31 December 2019. It applies […]

Submit your 2017 Income Tax Return and avoid penalties

Posted on 28 of June, 2017 by in Tax

Annual Tax season is here, and Income Tax return submissions begin 1 July 2017. We’ve taken the liberty of answering frequently asked questions individuals may have. The South African Revenue Service (SARS) has allocated different submission deadlines dependant on the manner of the submission. What are the submission deadlines for Income Tax Returns? Please pay […]

Interest free loans with companies

Posted on 17 of May, 2017 by in Tax

The latest annual nation budget presented in Parliament proposed the dividends tax rate to be increased with almost immediate effect from 15% to 20%. The increased rate brings into renewed focus what anti-avoidance measures exist in the Income Tax Act[1] that seeks to ensure that the dividends tax is not avoided. Most commonly, the dividends […]

Interest free loans to directors

Posted on 24 of April, 2017 by in Tax

It is very often the case that a company extends an interest free or low interest loan to a director. This manifests either as a true incentive or benefit to that director (mostly the case in larger corporate environments) or in a small business environment in lieu of salaries paid. The latter is especially the […]

Practice Note 31 in the spotlight

Posted on 28 of March, 2017 by in Tax

The deductibility of interest for income tax purposes recently came under scrutiny in Mr X vs SARS,[1] and specifically the application of SARS’ Practice Note 31. As a general rule, expenditure would be deductible for income tax purposes if it meets all of the requirements in section 11(a) of the Income Tax Act, 58 of […]

PAYE and directors’ (and members’) remuneration from 1 March 2017

Posted on 10 of March, 2017 by in Tax

Many would have noted reports in the national media that the Taxation Laws Amendment Act, 16 of 2016, was signed into law by President Zuma on 11 January 2017. One of the many changes that the Act brings into effect is the repeal of paragraph 11C of the Fourth Schedule to the Income Tax Act, […]

Crunching the numbers: Budget 2017

Posted on 8 of March, 2017 by in Tax

It is an astounding exercise to go through the numbers behind the annual national budget presented recently and to start to understand what it is that the various tax changes are aimed at achieving. On 22 February 2017, Finance Minister Pravin Gordhan presented South Africa’s biggest budget yet, providing for budgeted Government expenditure over the […]

Proposed amendment to the taxation of trusts

Posted on 23 of November, 2016 by in Tax

National Treasury published its much anticipated proposed annual amendments to tax legislation earlier in July. This year the proposed amendments were widely anticipated to shed led on Treasury’s proposals on how to address the perceived abuse of the trust form specifically going forward, especially as relates to the now well known ‘conduit pipe’ principle (in […]