South Africa - what's new in Tax (28 January 2019 - 03 February 2019)

SARS Update

Income Tax

Tax Guide for Small Businesses 2017/2018: This publication contains information about the legislation and other statutory obligations which apply to small businesses, such as registration, record-keeping and tax relief measures. (click to see)

Case Law

• ABC (Pty) Ltd v The Commissioner for the South African Revenue Service (IT 14426) [2018] ZASCA (13 December 2018)

This case was concerned with the interpretation and application of s 8(15) of the Value-Added Tax Act, 89 of 1991. SARS raised additional VAT assessments against the taxpayer for certain VAT periods on the part of the supply of an advertising and promotion service rendered by the taxpayer. The remainder of the service supplied was accepted by SARS as having been properly zero-rated. The basis for the additional VAT assessments raised by SARS was that the supply was deemed a separate supply of goods. The appeal was dismissed and the additional assessments for the relevant VAT periods raised against the taxpayer by SARS were confirmed. (click to see)

• XYZ (Pty) Ltd v The Commissioner for the South African Revenue Service (14189) [2018] ZASCA (20 December 2018)

The court in this instance was asked to deal with whether the receipt of R125 million by the taxpayer in respect of a lease premium was of a revenue nature or of a capital nature. The court dismissed the taxpayer's appeal and confirmed the SARS assessment. The court held that the taxpayer did not advance any reasonable ground for the remission of interest and further that the omission by the taxpayer to return and pay the receipt on time has led to SARS suffering financial loss and therefore the taxpayer is also liable for interest. (click to see)

VAT

No updates

Customs 

No updates

SARS Rulings

Draft Binding General Ruling: Section 7E of the Income Tax Act, 58 of 1962. The ruling states that interest paid to any person under any tax legislation on or after 1 March 2018 must be included in that persons gross income only to the extent that no portion of that amount was already included in the gross income in any previous year of assessment. (click to see)

SARS Media Release

SA Trade Statistics for December 2018. On 31 January 2019, SARS released trade statistics for December 2018 recording a trade surplus of R17.17 billion. (click to see)

National Treasury Update

Publications

• Statement of the national and provincial governments' revenue, expenditure and national borrowing. On 30 January 2019, the Director-General of the NT issued the statement of the national and provincial governments' revenue, expenditure and national borrowing as at 31 December 2018. (click to see)
• Invitation to the workshop on the review of the National Payment System Act, 78 of 1998. The NT and the SARB are inviting the public and media to a workshop on the review of this Act. (click to see)
• Financial Matters Amendment Bill. The NT has published a copy of the Financial Matters Amendment Bill that was introduced in the National Assembly. (click to see)

SARB Update

• SARB joins Global Financial Innovation Network. On 31 January 2019, the SARB announced that it is joining the Global Financial Innovation Network.  The body provides an efficient conduit for innovative firms to interact with regulators and to help them navigate between countries as they look to scale new ideas in the interest of consumers. The SARB's membership forms part of its journey to support responsible financial innovation for the benefit of all South Africans. (click to see)
• Template on international reserves and foreign currency liquidity. The SARB published the International Reserves template for December 2018. (click to see)
• Monthly release of selected data. Updated data for January 2019 includes money and banking indicators, banks and mutual banks, international economic data, capital market, national government finance as well as economic indicators. (click to see)

OECD

• Ireland deposits its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). On 29 January 2019, Ireland deposited its instrument of ratification for the MLI with the OECD, therewith underlining its commitment to prevent the abuse of tax treaties and BEPS. (click to see)
• OECD announces progress made in addressing harmful tax practices. The OECD/G20 has made further progress on BEPS Action 5 in implementation of measures against harmful tax practices. (click to see)
• International community makes important progress on the tax challenges of digitalization. The OECD announced that the international community has made substantial progress towards addressing the tax challenges arising from digitalisation of the economy and has agreed to continue working multilaterally towards achievement of a new consensus-based long-term solution in 2020. (click to see)