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 […]

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 […]

Explaining zero rated VAT

Posted on 9 of January, 2017 by in VAT

Value-Added Tax, or VAT, is currently typically charged at 14% on all taxable supplies of goods or services rendered by registered VAT vendors. Taxable supplies exclude exempt supplies, such as providing financial services, residential accommodation or educational services (see section 12 of the Value-Added Tax Act, 89 of 1991). Where a VAT vendor makes exempt […]

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 […]

How South African dividends are taxed

Posted on 31 of October, 2016 by in Tax

Dividends received by a South African taxpayer are generally exempt from income tax. The major exemption though being dividends received from so-called REITs (these being some of the major property owing companies listed on the JSE (such as for example Redefine Properties Ltd). Dividends received from REITs are not exempt from income tax, and will […]

Tax on pension funds and divorces

Posted on 9 of September, 2016 by in Tax

It is an unfortunate reality that marriages may after many years end up in divorce. When this happens the parties either have to agree on how assets are to be split between themselves, or a court would order a certain division of assets to apply. One such asset which is often involved is the accumulated […]

Misuse of assessed losses

Posted on 17 of June, 2016 by in Business

An assessed loss for income tax purposes is a potentially valuable asset: it represents past losses made by a taxpayer which is able of being carried forward to subsequent tax years against which future taxable profits are able of being set off. The set-off of historic losses – in the form of an assessed loss […]