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SARS Publications - Average exchange rate

20 June 2013   (0 Comments)
Posted by: Author: SARS Legal and Policy
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Author: SARS Legal and Policy

SARS released a new publication on Average Exchange rates on the 19th of June 2013. The information relating to that is provided below, together with links to the three different tables which are provided by SARS.

The Income Tax Act, 1962, provides specifically that certain amounts expressed in a foreign currency must be translated into rand by the application of an applicable average exchange rate.

The term "average exchange rate" is defined in section 1(1) of the Act and means, in relation to a year of assessment,   the average exchange rate determined by using the closing spot rates at the end of daily or monthly intervals during a year of assessment. This rate must be applied consistently within that year of assessment.

The South African Reserve Bank (SARB) determines weighted average exchange rates, based on the foreign exchange transactions of commercial banks. SARS publishes these rates on a quarterly basis, which may be used by stakeholders (taxpayers) in the determination of the average exchange rate when required in the Act.

The next update can be expected in September 2013.

Note: These average exchange rates do not represent spot rates for purposes of the Act.

The use of these average exchange rates is not compulsory. Stakeholders using average exchange rates which differ from those published by SARS must, however, keep record of all calculations for audit purposes.

Table A: A list of the average exchange rates of selected currencies for a year of assessment as from December 2003

Table B:  A list of the monthly average exchange rates to assist a person whose year of assessment is shorter or longer than 12 months

Example : How to calculate Average Exchange Rates for a period longer than 12 months


WHY REGISTER WITH SAIT?

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.

MINIMUM REQUIREMENTS TO REGISTER

The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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