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Grants from Setas 0 M. Phalane The client is accredited training provider by MerSeta, Engineering companies are obliged to train their employees/learners through companies accredited with MerSeta.My client provide training on behalf of Engineering companies and is subject to audit by MerSeta.Once MerSeta is happy with the audit conducted on my client they release a grant to an Engineering company which they then releases it to my ClientQuestionMy client got a letter from SARS saying he owes Vat?I believe my client is supposed to be exempted for Vat because the nature of the funds/income is getting is mainly from MerSeta grants, if you agree which channel must I follow to be able to prove that my client should be exempted from VAT on the grants received from MerSetaThanksRegardsMphiri Phalane 0725171377mphirip@gmail.com
by M. Phalane
16 January 2013
Usufruct rent received from trust 1 E. Bosman Normal 0 false false false EN-ZA X-NONE X-NONE MicrosoftInternetExplorer4 Normal 0 false false false EN-ZA X-NONE X-NONE MicrosoftInternetExplorer4 Good Evening Emile Here’s my offering . Principles. The usufructuary has the right to receive income from the asset held under the usufruct. (Note that he does not have the right to dispose of the asset itself). Any non capital expenditure actually incurred by the usufructuary in order to produce that income ought to be deductible from that income. Application. The usufructuary to include rental income as part of his gross income. Expenditure provided it meets the criteria set out above ought to be deductible against rental income. Notes. Lease agreement (written) should reflect Usufructuary as lessor. Recommend that a separate bank account be opened in usufructuary’s name for rental receipts and expenditure incurred. Interest incurred in respect of bare dominium holder‘s bond would in my view not be deductible from usufructuary’s rental income. Recommendation: It is advisable to approach a tax consultant whom you should apprise of all the facts in order to give you a proper opinion. /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;}   /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;}
by M. White
04 December 2012
Public Office Bearers Allowance of Mayors 1 A. Ebersohn I have copied and pasted the appopriate page of the 2012 SARS guide  for employers which deals with deductions for PAYE purposes .As can be seen a taxpayer may claim for certain  expenditure actually incurred by him/her against such allowance.However this would not include expenditure for which he has been re-imbursed.Hope this helps.5.3 ALLOWANCE TO A HOLDER OF A PUBLIC OFFICEReference to the Act Section 8(1)(d) and 8(1)(f)Meaning Any allowance granted to the holder of a public office to enable him / her todefray expenditure incurred by him / her in connection with his / her office, tohave been expended by him / her to the extent that he / she has actually incurredexpenses for the purposes of his / her office in respect of — secretarial or duplicating services, stationery, postage or telephone calls; the hire and maintenance of office accommodation; travelling; hospitality extended at any official or civic function which the holder of theoffice is by reason of the nature of such office normally expected toarrange; and subsistence and incidental costs incurred.
by M. White
04 December 2012
Diesel Refund 0 S. Truter SARS is doing diesel refund audits and if the farmer is not in a position of a logbook they issue a letter of intend to at back the refund; add penalties of 100%. Is there anything that we can do about it. It seems if it is a country wide issue and that the farmers was not aware of the fact that logbooks need to be kept for the refund purposes. Can't we suggest to SARS to accept alternative methods to proof the diesel rerund claims up to now and to explain to all farmers via the media what kind of records they should keep. There is already different suggestions (with regards to the information that should be in a logbook) from the SARS officials. It is not always easy to keep a logbook on a farm due to the nature of the conditions on a farm.     
by S. Truter
20 November 2012
IT12 TAX CALCULATOR 1 John Benson I am aware that the tax calculator did not work at some stage but is currently working.  
by D. van der Walt
27 September 2012
Vat: Welfare Organisations & motor cars 5 M. White Normal 0 false false false EN-ZA X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} Hi Dieter Thanks for your input(no pun intended). The transport of employees ‘children to school is a cost to the company (registered vendor) which is a benefit for the relevant employees in the course of its enterprise making taxable supplies. That is ,there is no charge(fare)  made for transporting the children to school and hence would not be an exempt supply as envisaged by section 12(g)(road/rail business passenger services).For this reason I think that a case can be made  for claiming input tax(as defined in S1 of Vat Act) on the relevant vehicle. Over to you.
by M. White
07 August 2012
Illegal Denial of Expenses 6 J. Lopes Normal 0 false false false EN-ZA X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;}  Hi  My suggestion is that you should take this matter up with the office of the SSMO(contact details on SARS website),providing full details of the facts regarding each client’s position :eg  particulars of each client, information requested by SARS, details furnished to SARS  in terms of when provided and what was provided etc etc. when and how they were notified(eg. assessment with covering letter) details relating to your objection ,SARS response and details relating to their lack of  communication etc and any other information which you believe is necessary and relevant. Other options ,consider attending SAIT’s seminars re SARS audits(deal with IT14SD’s) & Tax Admin.Act. Also consider attending SARS’s free TAX Admin Act Seminar(see SARS website for details) re the issues raised by you in this forum.There are other options but I believe they can be very  expensive eg insituting court action.
by M. White
01 August 2012
Binding General Ruling 11 0 M. White I notice that the ruling states "The consideration as reflected on the tax invoice must be reflected as output tax in the vendor's VAT 201 return for the applicable tax period. " Should the word "tax " after the word " output " not be excluded,otherwise SARS will be in for a windfall of revenue.
by M. White
30 July 2012
WEAR AND TEAR: LED LIGHTS 3 D. van der Walt Normal 0 false false false EN-ZA X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} Hi Dieter Thanks for the info. Certainly, from a lifespan point of view, one may have to consider capitalising the lights. However, for income tax purposes, Interpretation note 47(paragraph 4.3.5) allows a taxpayer to write off small items with a value of less than R7000.00, to be written off in the year such assets acquired/brought into use.
by M. White
30 July 2012
Shareholders' Loans Capitlisation to Equity 2 G. Patron Thank you for your thoughts and opinion.   I seem to be requested to look at potential tax issues on transactions that do not seem to be too clear cut in terms of the Act.   Kind regards Guy  
by G. Patron
25 July 2012
Trading Stock Valuation (s 22 of the ITA) 2 G. Patron Hi,   Thank you for your opinion. The stock was property held for resale and each property was costed / valued individually.   I will look at the referred text book as well.   Thank you and regards Guy  
by G. Patron
20 July 2012
LEASEHOLD IMPROVEMENTS 1 D. van der Walt Normal 0 false false false EN-ZA X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} Broomberg on Tax Strategy (Lexis Nexis 4th edition) has devoted entire chapter (chapter 9- pages 91 to 100) on the subject of leasehold improvements. In short the lessor‘s position is: he is taxed on the total amount of the improvements which lessee is obliged to effect. Secondly at the discretion of SARS the lessor may be granted relief via an allowance in the year that improvements have been completed (page 92).That is, it is not spread over the period of the lease. The effect of the relief granted is that lessor is taxed on the present value of the improvements discounted at 6%pa (page 97).  
by M. White
16 July 2012
tax Practioners 0 B. Taylor Your recent email regarding the need to register as a tax practioner brings to mind the current practice that SARS personnel are allowed to provide the service of completing tax returns. I would assume that these SARS staff members are not registered as tax practioners.The questions are Are they qualified to perform such a service ? If there are errors, is there some form of recourse to SARS? Why should they be allowed to do it under uncontrolled circumstances when we are rigidly controlled and where both SARS and our clients have recourse to us for errors and/or poor work. It is my contention that ther this practice should cease and only registered tax practioners or their staff can complete tax returns or some element of perhaps limited pro bono work should be undertaken by the profession. Further I believe that SARS in the their advertising diminishes the skill required to properly complete a tax return and in a way create extra work for themselves due to poorly completed returns
by B. Taylor
13 July 2012
Tax treatment of dividends received by companies 0 F. Joubert I want to set up a company as an investment holdings vehicle to buy and sell shares. It would have a mix of trading and investing (long and short term positions), and I envision receiving dividends.What would the following tax implications be compared to investing in my personal capacity:1. Capital gains tax2. Dividends tax and treatment of dividends if paid out directly to me or if the are kept in company and reinvested immediately3. Would I be paying higher or lower tax (income tax) over the long run by using a company?4. What would I be able to write off as expenses on the company (Trading platform fee, telephone, data, educational material?)?
by F. Joubert
10 July 2012
De Beers Vat case 0 M. White Normal 0 false false false EN-ZA X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} The majority of the court held at paragraph 52 that  DBCM "…is not a dealer in shares, the holding of shares …does not fall within the definition of enterprise...It must be found that DBCM’s enterprise for the purposes of the Act ,consisted of mining ,marketing and selling diamonds”. Hence as the vat claimed was not incurred for its mining…enterprise(making of taxable supplies), it was not deductible for Vat purposes. However,even if DBCM was a  dealer in shares ,such activities would constitute exempt supplies(section 2(1)(d) read with s 12(a)of Vat Act) which are excluded from the definition of enterprise( see paragraph   20 of decision).Hence the vat claimed should be disallowed in any case. My question is why  would  the court  make this distinction if the same result is achieved either way.
by M. White
10 July 2012
INDEPENDENT CONTRACTOR & SEC 23(m) 1 D. van der Walt Normal 0 false false false EN-ZA X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} It should be noted too, that should an independent contractor employ three full time unconnected (not related to him) persons throughout the tax year, his income received from his client (employer) will be deemed not to be "remuneration”  for purposes of the 4th schedule. This is important since there can be no argument from the tax authorities that he is not an independent contractor.
by M. White
07 July 2012
help with student tax.. 6 mohammed sabi Normal 0 false false false EN-ZA X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} As previously indicated it seems that your category of employment falls within the "standard employment " definition .Hence as Dieter has indicated you need to inform your employer accordingly  in writing .He then should apply the tax deduction tables appropriately resulting in a significantly lower deduction of tax as already indicated. Although you say that you will not be working again this year(tax year ends in Feb 2013), who knows that this will be the case. Maybe you will earn other income or other income will accrue to you or be received by you from other sources. Hence the situation can only assessed after year end to see if you qualify for a refund. Probably not the reply you will be happy with. Good luck for your studies for 2012.  
by M. White
06 July 2012
Deemed Input on Fixed Propety 2 S. Truter Regarding s18 adjustments ,a deemed input tax deduction may be claimed but it would be based on the amount of the consideration paid.As the property would have been acquired for no consideration the input tax deduction would be 14/114 xnil = nil input tax .
by M. White
06 July 2012
Commission Earners: Section 23(m) 4 D. van der Walt Normal 0 false false false EN-ZA X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} Another spin off would be that SARS would possibly benefit from the increased taxable income of the employer.Hence a win -win situation for all the parties concerned.
by M. White
04 July 2012
PROVISIONAL TAX: UNDER ESTIMATION 3 D. van der Walt This matter is a point of discussion at the National Stakeholders meeting to be held with SARS on 17 July 2012.
by D. van der Walt
03 July 2012
 

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