Filing season for individuals and trusts started 1 July!

Taxpayers may submit their income tax returns to SARS electronically or may ask for a printed tax return form that includes details of their personal income and deductions.

Changes in the filing of forms and the introduction of eFiling and other technologies had enabled it to return 76% of assessments to taxpayers within 48 hours of submission in 2008, with more than three million individual taxpayers who used eFiling.

The deadline for manual tax returns is 18 September 2009, and for electronic submissions 20 November 2009.

SARS said it had posted more than two million forms last week that allowed manual taxpayers to request a customised return. "Taxpayers who submitted electronically last year (need not complete such a request) and can simply visit a branch with all their supporting documents or obtain their customised return on their eFiling profile."

Taxpayers who earned less than R120 000 a year from a single employer and had no other income and deductions to declare, were not required to submit an income tax return.

Happy filing!

Yours truly,
Stiaan Klue
Chief Executive

In the 2008 Budget Review it was announced that access to equity finance by small and medium-sized businesses and junior mining exploration companies is one of the main challenges to the economic growth of these sectors.

"This is either a very difficult moment to become a finance minister or a very opportune one, depending on one’s perspective. It is a testing time because the world is facing its deepest economic crisis in decades. South Africa is in its first recession in 17 years. Our revenue collection has weakened significantly and spending pressures are mounting."

Revenue collection could be as much as R50bn- R60bn below the R659bn target this financial year if trends continued, Finance Minister Pravin Gordhan warned ominously yesterday.

The Supreme Court of Appeal has upheld a decision of the Full Bench of the High Court at Bloemfontein (W J Fourie Beleggings v C: SARS, reported in Vol 71 Part 4 of the South African Tax Cases Reports) which dealt with the capital or revenue nature of a compensation payment for the premature cancellation of trading contract.

The Draft 2009 Taxation Laws Amendments contain a proposal that, if enacted, will allow individuals to transfer their domestic residence out of a company or close corporation, for a period of two years, tax-free.

In the December 2005 edition of De Rebus, the tax update column discussed and criticised ITC 1793, which had confirmed that capital gains tax (CGT) arises in the hands of a debtor that receives its debt as a bequest from a deceased creditor. In the case in question, a family trust ended up having to pay CGT at a rate of 20% on the amount of the loan that had been bequeathed to it.

This case dealt with the question whether a High Court has the right to consider the validity of a Bill - before the proposed legislation has come into operation - were reported in the material under review. This case dealt with the particular aspect of the principle of separation of powers between the Minister of Finance and Parliament.

The infamous relationship between Schabir Shaik and Jacob Zuma has added yet another 32 pages to the South African Law Reports. The Supreme Court of Appeal’s decision, which was handed down on 12 January 2009, in which Nicholson J’s decision (reported under the citation of Zuma v National Director of Public Prosecutions [2009] 1 All SA 54 (N) was appealed against by the National Prosecuting Authority, has now been reported: See National Director of Public Prosecutions v Zuma 2009 (2) SA 279 (SCA).

Section 18(1) of the Namibian Value-Added Tax Act 10 of 2000 (the Act) makes provision for the deduction of input tax paid by a registered person. However, in terms of s 19 such tax may not be deducted unless the registered person is in the business of providing entertainment and the taxable supply made relates to the provision of taxable supplies of entertainment made in the ordinary course of such business. In the Commissioner for Inland Revenue, Namibia v Namsov Fishing Enterprises (Pty) Ltd 2009 (2) SA 567 (NmSC) the respondent, Namsov Fishing, sought to deduct input tax paid for food and beverages supplied to its fishermen who went to sea to catch fish, treating the provision of food and beverages as entertainment.

In Mose NO v Minister of Education, Western Cape and Others 2009 (2) SA 408 (C) the applicant’s son, one LM, was initially suspended from school and, was expelled after a disciplinary hearing. The problem stemmed from the learner’s history of selling dagga (the drug, cannabis) to fellow learners and on one occasion, smoking and selling the drug in a public park next to the school while he was in school uniform.

The period of 30 days allowed by s 78(2) of the Promotion of Access to Information Act 2 of 2000 (the Act) within which to bring an application to court against a decision taken in an internal appeal has been found to be unconstitutional.

National Treasury held a general round-table discussion with stakeholders on the Draft Taxation Laws Amendment Bills on Tuesday 30 June 2009. SAIT was represented at this forum and emphasized the concerns raised in the written submission to Parliament's Standing Committee on Finance.

SARS requested during the recent National Stakeholders Meeting that SAIT, SAICA and SAIPA form a task team to investigate an alternative model for regulating the tax profession in South Africa. The professional bodies had an initial meeting during June.

SAIT recently published, through Juta, the SAIT legislation compendium. This user-friendly resource is an up-to-date collection of tax legislation and supplementary material specifically selected for tax practitioners, students, accountants and tax attorneys.

The Events department recently launched an advanced registration facility for CPD seminars and events. The objective of the facility is to ensure that members’ registration experience is effortless.

The Institute will again be hosting the National Tax Conference on 8 and 9 September 2009 at Indaba Hotel, Fourways Johannesburg.

This ruling deals with the income tax implications attendant upon a contract mining arrangement entered into by the parties specifically to overcome certain administrative impediments relating to the transfer of old order mining rights to a purchaser of a mining operation.

This ruling deals with the capital gains tax implications for the transferor and transferee, which are connected persons, regarding the disposal of the right to receive royalty income.

1 July 2009 marks the start of the 2009 Tax Season with the opening of the filing period for income tax returns for millions of South Africa’s individual taxpayers and trusts.

The OECD held a consultation with business commentators on its discussion draft on the transfer pricing aspects of business restructurings which was released for public comment in September 2008. The discussion draft had been approved for release by the OECD’s Committee on Fiscal Affairs (CFA) and had been prepared by members of the Special Session on Business Restructuring of the CFA’s Working Party No. 6, the OECD group responsible for the OECD’s Transfer Pricing Guidelines.

Bermuda and Germany on 3 July 2009 signed a bilateral agreement for the exchange of information for tax purposes, bringing to 13 the number of such agreements that Bermuda has entered into.

The OECD study into building transparent tax compliance by banks examined the role of banks in the provision of aggressive tax planning arrangements.

HMRC UK has launched a consultation on taxation for banks.

The attractions of the Irish corporate tax regime have not been lost on a number of major UK companies, which have declared their intention to transfer their fiscal domicile to the Republic. For those less familiar with the Irish regime, which has recently budget, the following articles provides a useful outline.