Income tax is a tax levied on all income and profit received by a taxpayer which includes individuals, companies and trusts. Sars expresses interesting view on an amalgamation transaction. All interpretation notes referred to are available on the sars website at. Income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website.
Withholding tax in terms of section 35a of the income tax. We are the leading resource for freely available legislation in south africa and. Africa or has its place of effective management in south africa will also qualify as a resident. Income tax act 58 of 1962 the act republic of south africa, 1962. Section 64fa1c and paragraph 51a of the eighth schedule to the act. Income tax act, 1962 regulations in terms of section 12t8 of the income tax act, 1962, on the requirements for tax free investment i, nhlanhla musa nene, minister of finance, under section 12t8 of the income tax act, 1962 act no. Section 10c of the income tax act 3bytwo financial planning. Amendment in respect of foreign employment income exemption. Acts online provides legislation, including amendments and regulations, in an intuitive, online format.
This note provideguidance and clarity on the tax s ofimplications amounts. This famous dictum of lord macnaghten,1 says, with respect, little in fact, it begs the question. In terms of this section, in certain circumstances, income is deemed to be income received by or accrued to a taxpayer. Provided that i where a deduction has been allowed under paragraph d, the. Pdf a critical analysis of the application of section 31. South african institute of chartered accountants integritax newsletter income tax and vat acts online. The legal nature and classification of trusts and the evolution oftheir use in south africa are examined. With acts you are guaranteed the latest and most up to date resource for your legislative needs. Paragraph 78 of schedule 1 is deemed to have come into operation on 1 january 2011 and applies in respect of premiums incurred on or after that date. This usually materialises when a taxpayer sells his or her property that produces income. The most recent ruling in this regard is binding private ruling. Schedule amendment of skills development act south african revenue service act, no. Section 80acii was introduced in the revised proposals on tax avoidance and section 103 of the income tax act, 1962 revised proposals.
Unless indicated otherwise, the latest issue of these documents. While section 11a provides positively for what may be deducted, section 23g provides negatively for what may not be deducted. This note provides guidance on the application and interpretation of section101 e. May 06, 2016 the ruling concerns the tax consequences of the disposal of an asset in terms of an assetforshare transaction as defined in s421 of the income tax act, no 58 of 1962 act within 18 months of its acquisition in terms of an intragroup transaction as contemplated in s451a of the act. The general deduction formula is contained in section 11a read with section 23g of the income tax act 58 of 1962 the act. The form of tax that people generally associate with the concept of income tax is normal income tax. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. Silke on south african income tax online my lexisnexisoctober 2017 in 8. Tbe rates of normal tax to be levied in terms of section 52 of the income tax act, 1962 act no. Income tax act 28 of 1997 south african revenue service act 34 of 1997. Covid19 the benefits of tax compliance in unprecedented times. The section treats interest which is incurred by a company during a year of assessment tax. The provisions of section 31 of the income tax act no.
Schedule 3 amendment of legislation affected by this act tax administration act, no. Income tax act 58 of 1962 south african government. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria. Southern african legal information institute saflii on laws of south africa. Pdf environmental policy integration in terms of section 37d of the. The reach and implication of section 454b of the income tax act 58 of 1962 section 45 of the income tax act1 provides a mechanism whereby a company may dispose of its assets to another company and defer the tax consequences thereof, if both companies form part of the same group of companies. Be it enacted by the parliamentof the republicof south africa, as follows. Subparagraphs g, h, i and j of paragraph 60 of schedule 1 come into operation on the date on which part viii of chapter ii of the income tax act, 1962, comes into operation. Finance in a calabash introduction income tax is a charge levied on income, pro. A critical analysis of tax avoidance in the south african income tax act 58 of 1962, as amended article in mediterranean journal of social sciences 46 july 20 with 54 reads. A research team from a south african resident company b visits the congo and makes contact with a congolese healer. The research will address the income tax, capital gains tax, valueadded tax and other tax consequences that may arise with restructuring a group, specifically analysing a south african tax resident company, a.
The savings allow for tax deduction of 95ckwh saved on energy consumption. Nor can the ordinary meaning of income be resorted to to explain the income tax in south africa, for income is defined in the income tax act, 1962,2 as amended. Refinement of section 7c 29 august 2017 in brief section 7c of the income tax act, 1962 act no. The receipts or accrual basis of the south african income tax. Initially in the draft taxation laws amendment bill, 2017 draft bill, the proposal was to repeal the exemption on foreign employment income in terms of s101oii of the income tax act, no 58 of 1962 act. Tax administration act 28 of 2011 south african government. Several provisions of both the eighth schedule to the income tax act 58 of 1962 and the act itself have to be taken into account in determining whether a taxable capital gain or an assessed capital. The income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website. The 12l tax incentive, according to income tax act, 1962 act no. Evaluation of the source rules as contained in section 9. Unless indicated otherwise, the latest issue of these documents should be consulted.
When addressing the related parties definition, the south african legislation refers to the concept of a connected person that is defined in section 1 of the sa income tax act and further guidance is provided for in interpretation note 67 to the sa income tax act. Dec 11, 20 the provisions of section 31 of the income tax act no. Section 31 was introduced in 1995 to grant the commissioner power to adjust tax calculations where a taxpayer was involved in crossborder transactions not at arms length. Links to adobe pdf versions of the government gazettes as published by. Previously, at retirement, any disallowed contributions that did not rank for deduction in terms of section 11 of the ita could be set off against any taxable lump sum taken at retirement. Of the income tax act 58 of 1962 fixing of rate per kilometre in respect of motor vehicles for the purposes of section 8b. A critical analysis of the meaning of the term income in. Fixing of rates of normal tax and amendment of certain amounts for purposes of act 58 of 1962 1. The reach and implication of section 454b of the income tax act 58 of 1962 section 45 of the income tax act1 provides a mechanism whereby a company may dispose of its assets to another company and defer the tax consequences thereof, if both companies form part of. Consequently, this dissertation conducts an analysis of the relevance and appropriateness of south africa s source rules pertaining to software arrangements as contained in section 9 of the income tax act ita and as espoused in the common law. South african residents account for tax on their worldwide receipts and accruals, if they are tax resident on the basis of being ordinarily resident or through the physical presence test. Section 10c of the income tax act, 58 of 1962 ita came into effect on 1 march 2014. A critical analysis of tax avoidance in the south african. Income tax act 90 of 1988 income tax amendment act 99 of 1988.
It is the national governments main source of income and is imposed by the income tax act no. Income tax act, 1962 convention between the republic of south africa and the government of the republic of uganda for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income in terms of section 1082 of the income tax act, 1962 act no 58 of 1962, read in conjunction with section 2314 of the. Under proviso a to the definition of a resident a day includes a part of a day. Income tax act 58 of 1962 section south african revenue. All interpretation notes referred to in this note are available on the sars website at. Determining a taxable capital gain or an assessed capital. The reach and implication of section 454b of the income. Gazette as contemplated in section 18a1a of the income tax act, 1962, shall be incorporated into that act within a period of 12 months after the date fixed by the president in terms of subsection 2b. Pdf south african income tax implications for income earned in. Thereafter, an indepth analyses of antiavoidance provisions contained in the income tax act is undertaken. Income tax act, 1962 regulations in terms of section 12l of the income tax act, 1962, on the allowance for energy efficiency savings i, pravin jamnadas gordhan, minister of finance, in terms of section 12l5 of the income tax act, 1962 act no. South african institute of chartered accountants integritax newsletter income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website the consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website. The objective of this study was to establish the origin, meaning, application and effect of section 80acii of the act.
In the south african service industry it is a wellestablished practice and fact that. A tax residents income is taxed in south africa, regardless of the source of the income. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website. Sars expresses interesting view on an amalgamation. All guides, interpretation notes and rulings referred to in this note are available on the. Uif refers to unemployment insurance fund contributions as determined in the unemployment insurance contributions act, 2002.
The rates of normal tax to be levied in terms of section 5 2 of the income tax act, 1962 act no. Section 31 of the income tax act 58, 1962 ita a definition of transfer pricing and thin capitalisation. Successive corporate reorganisation transactions a number of advance tax rulings have recently been released by the south african revenue service sars relating to the corporate tax rollover relief rules contained in s41 to 47 of the income tax act, no 58 of 1962 act. Section 7 of the income tax act 58 of 1962 the act was introduced as an antiavoidance measure to prevent tax avoidance by means of a donation, settlement or other disposition in various types of schemes. E it enacted by the parliament of the republic of south africa, as follows. Cliffe dekker hofmeyr successive corporate reorganisation. House of assembly of the republic of south africa, as follows. All guides, interpretation notes, forms and returns referred to in this note are. Section 80acii of the income tax act 58 of 1962, as amended the act, introduced a new concept to the south african income tax environment. Section 24i of the income tax act 58 of 1962 was introduced to deal with foreign exchange gains and losses on any unit of currency on hand, debts due to or by a taxpayer, forward exchanges contacts, and forward currency option contracts. Proposed repeal of foreign employment income exemption july 26, 2017 in brief south african residents are entitled to an exemption for remuneration received or accrued with respect to services rendered outside south africa pursuant to section 101oii of the income tax act, 1962 act no. An analysis of section 80acii of the income tax act no. National treasury treasury thereafter engaged in an extensive consultation process on the proposed amendments with various stakeholders.
As from 1 january 2016, section 12b of the income tax act south africa was amended from a threeyear 50% 30% 20% accelerated depreciation allowance on renewable energy to an even quicker depreciation allowance of just one year 100%. The south african tax system will provide a tax subsidy of up to zar 500 per month for the next four months. Apr 01, 2009 in november 2006, section 1031 of the income tax act was abolished and replaced by a new part iia, containing sections 80a to 80l, which target impermissible tax avoidance arrangements. South african revenue service act 34 of 1997 amended by income tax act 28. Transfer pricing income tax act 58 of 1962 section 31. The ambit of sections 80a and 80l may 2010 issue 129 it recently came to our attention that the south african revenue service sars had purportedly acted in terms of section 80a of the income tax act, no 58 of 1962, as amended the act, to disallow an estate duty deduction claimed by the executors of a deceased estate. Where a debt is therefore due to a south african taxpayer not a.
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