SARS issued Binding Class Ruling 34 on 15 May 2012 dealing with the tax consequences of a taxpayer issuing exchange traded notes (ETNs).
An ETN is an agreement entered into between a Holder and an Issuer, in terms of which the Holder pays an amount (the acquisition amount) to the Issuer and the Issuer undertakes to pay to the Holder an amount (the redemption amount) calculated with reference to the value of certain specified assets or a benchmark (the reference portfolio) on the maturity date of the ETN. An ETN (for purposes of this ruling application) is a long-term instrument that is traded through the Johannesburg Stock Exchange (JSE) and the maturity date of the ETN will be a minimum of five years after the date of issue.
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.