Tax havens are responding to the G20's call to relax their bank secrecy rules. The pressure is particularly high on Switzerland, the biggest offshore centre which manages one-third of the world's wealth. Last week Switzerland signed its 12th accord with Qatar on data exchange and will now be removed from a list of unco-operative tax havens.

The countries still classified as unco-operative is Austria, Bahrain, Belgium, Bermuda, the British Virgin Islands, the Cayman Islands, Luxembourg, Monaco, Netherlands Antilles and San Marino. The Group of 20 agreed to name and shame states that do not co-operate on tax evasion and threatened them with sanctions.

It is clear that the pressure is working and is causing political embarrassment to affected offshore centres.

Yours truly,
Stiaan Klue
Chief Executive

Paragraph 19(1)(c) of the Fourth Schedule to the Income Tax Act provides that, unless the Commissioner, having regard to the circumstances, agrees to accept an estimate of a lower amount, a provisional taxpayer’s first provisional tax estimate for a year of assessment must not be less than the basic amount applicable to the estimate in question.

The 'dividends tax', frequently and loosely referred to as a 'withholding tax' is anticipated to come into operation in late 2010, providing time for the government to re-negotiate several double taxation agreements (DTAs) which currently provide for a zero rate of withholding tax where dividends are paid to non-residents.

US authorities Monday extended by some three weeks a tax amnesty deadline for holders of undisclosed offshore bank accounts, citing an influx of people facing "logistical" issues coming forward.

Some corporate frauds entail rendering a tax return to SARS disclosing fictitious income, thereby leading to an assessment and the payment of tax where no tax was in fact due. If these circumstances come to light, the taxpayer’s right to a refund of tax is not in doubt. More contentious, however, is the question whether SARS is required to pay interest on the tax that had been paid, but which was not due.

The case of ITC 1837 (2009) 71 SATC 177, heard in the Cape Tax Court, concerned the deductibility, in terms of section 11(c) of the Income Tax Act 58 of 1962, of legal costs incurred in defending a defamation action.

South Africa's tax revenue will likely undershoot the target by approximately R70bn this financial year due to recession, said Deputy President Kgalema Motlanthe on Tuesday.

SARS is in the process of conducting a survey on eFiling.

On 25 September SARS released BPR 045. The ruling deals with conditional interest which will be incurred in terms of a loan and whether it will be deductible in terms of section 24J of the Act or alternatively section 11(a) read with section 23(g) of the Act.

On 23 September SARS released BPR 044. The ruling deals with the question as to whether the applicant may, under section 9D(10)(a)(iv) of the Act, disregard the provisions of section 9D(9)(b)(ii) of the Act when relying on the 'foreign business establishment' exclusion in section 9D(9)(b) of the Act on the basis that ...

SARS published BPR 043 on 22 September. The ruling deals with the question as to whether employees who have been allocated company motor vehicles by their employers for business use receive a taxable benefit in respect of any private use of those vehicles having regard to the nature of the duties of the employees.

On 23 September SARS released BCR 006. The ruling deals with the deductibility of levy payments to be made by particular taxpayers to another taxpayer, where these payments will be utilised by the other taxpayer to conduct research and development on behalf of and for the benefit of those taxpayers who will make such payments.

On 22 September SARS published BCR 005. The ruling deals with the question as to whether discretionary lump sum payments to be paid by a pension fund to its members, who are pensioners, in circumstances contemplated by the rules of the pension fund, qualifies as 'an event contemplated by the rules of the pension fund' as envisaged by paragraph 2C of the Second Schedule to the Act.

Switzerland has signed a protocol to its tax treaty with the United States that incorporates the internationally agreed tax information standard. This is the 11th agreement for the exchange of information in tax matters signed by Switzerland that meets the OECD standard.

OECD Secretary-General provided G20 leaders in Pittsburgh with an overview of what has been done and what remains to be done, in order to move to greater transparency and international cooperation in tax matters.