Who qualifies for a special trust and how is it taxed?
Unlike “conventional trusts” that are taxed at a flat tax rate, a special trust is taxed on the same sliding scale applicable to natural persons. The Income Tax Act provides for two types of special trusts: a so-called type-A and type-B trust. In essence, a type-A trust is created for a person (or persons) having […]
UNDERSTANDING THE PERIOD OF LIMITATION
In terms of section 99 of the Tax Administration Act, 28 of 2011, an assessment may not be made three years after the date of an original assessment by the South African Revenue Service (SARS), or in the case of a self-assessment by a taxpayers (such as in the case of a Value-Added Tax return), […]
CRYPTOCURRENCIES: THE NEW GENERATION’S CASH
Background to Bitcoin Bitcoin, Ether and Litecoin. These are some of the most prominent cryptocurrencies on the market today. Bitcoin is by far the best-known cryptocurrency due to the substantial increase in the price that was experienced in the past couple of years. Bitcoin is a cryptocurrency – a digital asset designed to work as a medium of exchange that uses cryptography to […]
HOW TO QUALIFY AS A PUBLIC BENEFIT ORGANISATION
Non-profit organisations can apply for approval as a “public benefit organisation” (“PBO”) in terms of section 30(3) of the Income Tax Act[1] in order to qualify for tax exemption under section 10(1)(cN) of the Income Tax Act. In terms of these provisions, the organisation’s sole or principal object must be the carrying on of one […]
VAT RATE INCREASE FROM 14% TO 15% – HOW TO COMPLETE THE VAT201
The Minister of Finance announced a VAT rate increase from 14% to 15% effective 1 April 2018 in the 2018 Budget Speech. To assist you in preparing your VAT return (VAT201) submission, the South African Revenue Service (SARS) would like to bring the following to your attention: The new tax fraction applicable from 1 April 2018 […]
DEDUCTIBILITY OF SED AND ED EXPENDITURE
The South African Revenue Service (“SARS”) recently issued a binding private ruling (“BPR”)[1] in which the income tax consequences of expenditure in respect of socio-economic development (“SED”) and enterprise development (“ED”) obligations were considered. The applicant in this case is a company that owns and operates a wind farm that generates electricity. In terms of […]