National Treasury issued a
request for your comment on proposed limitations against excessive interest tax
deductions. The objective is to incorporate commentary before finalising the
legislation to be published in the forthcoming 2013 Taxation Laws Amendment
Internationally governments have recently expressed their concern over Base
erosion (see the recent paper by the OECD (Base Erosion and Profit Shifting,
available on http://www.oecd.org/tax/beps.htm)) which
includes profit shifting schemes, like excessive deductions and income-shifting
to low-tax countries. As noted in this report "base erosion constitutes a
serious risk to tax revenues, tax sovereignty and tax fairness for many
The South African
government has expressed similar concerns, especially over the tax schemes that
lead to base erosion and that were first raised in the section 45 proposals in
2011. Taking cognisance of the new OECD report, the National Treasury has
proposed further rules to limit excessive interest tax deductions. Details of
these new proposals are attached.
SAIT Tax Technical Department will be developing comments on these debt
limitation rules as well as the hybrid debt instruments rules. Your comments
and proposals would be welcomed and can be sent to firstname.lastname@example.org
by 23 May 2013.
Thank you for assisting us
in shaping legislation that will ultimately benefit the country and taxpayers.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.