The SARS Commissioner, Oupa Magashula, on 1 July launched the start of the annual income tax return filing season.

At the launch, some phenomenal information were shared about the modernisation efforts of SARS over the last three years, including:

• SARS becoming a world-leader in the growth of electronic submission of income tax returns with 93% of all submissions received in the 2009/10 tax year having been received electronically - to the point where SARS only received approximately 270 000 manual returns last year.
• A spectacular reduction in the processing time of returns from an average of ± 55 working days in 2006 to an average of just 1.8 working days last year with 96% of returns processed within 24 hours.
• A remarkable improvement in the speed of refund processing from an average of only 45% within 5 working days in 2006 to an average of 83% within 5 working days and 71% of those being refunded within 48 hours last year.

Congratulations to the Commissioner and his staff for these achievements! It is certainly making it easier for taxpayers to comply.

Happy 2010 filing!

Stiaan Klue

This Ruling is a useful illustration of the advantages of unincorporated associations in tax planning and, in particular, the advantages of structuring a joint venture as an unincorporated association that contains some features of, but falls short of being a partnership.

Trusts are unrivalled for their adaptability and flexibility in commercial dealings and family financial arrangements. This ruling recounts that the company in question had engaged in restructuring activities “to mitigate its post-retirement medical aid obligations” – in essence by divesting the company of the risk of future medical scheme inflation and the uncertainty of future investment returns by transferring those risks and uncertainties to a separate legal entity, namely a trust. A reading of the ruling as a whole suggests that, in reality, other considerations played a large part.

The SA Revenue Services (Sars) needs to set out clear guidelines on how it will go about taking money owed to it out of people's bank accounts, a tax specialist said on Tuesday. "Unfortunately, there is nothing in the Income Tax Act which regulates when Sars can do this: whether it is after the first, second, or third notification that you owe tax. This is where the concern lies," said Ernst & Young tax director Vedika Andhee.

This decision of the Supreme Court of Appeal throws useful light on the legalities of the nightmare situation in which some taxpayers find themselves, where they are assessed to tax and the documents that would enable them to prove the assessment wrong have been lost or are otherwise unavailable.

This decision of the Supreme Court of Appeal is its most illuminating to date on the court’s view in regard to the issue of a collateral challenge in the context of a disputed tax assessment.

SAIT provide a technical service free of charge to members in good standing. This service exclude advice / opinions and is limited to technical interpretation of tax laws.

The 3rd National Tax Conference will be held at the Sandton Convention Centre during 13 and 14 October 2010. The theme of the conference is Improving Tax Compliance in the 21st Century.

SARS released a draft Interpretation Note on Trading stock for public comment. The note provides guidance on the deemed-income inclusion provisions of section 22(8) which are triggered when trading stock is applied, distributed or disposed of under specified circumstances other than by sale at market value in the ordinary course of trade.

The SAIT National Technical Committee submitted detailed comment on the draft Taxation Laws Amendment Bills to National Treasury and Parliament.

SARS introduced a dynamic new customised IVR which offers tax practitioners, taxpayers and traders a 24-hr self-help service. Using the new interactive system, practitioners will be able to request an online form, find out the status of an existing case, participate in customer surveys and resolve a host of other queries.

SARS announced the start of tax season on 1 July. The following deadlines will apply to Tax Season 2010: