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SA Tax Penalties on Companies

On 14 December 2018, the public notice that allows the South African Revenue Service (“SARS”) to impose penalties on companies for not submitting income tax returns was gazette. This is a new addition to the legion of penalties already faced by companies and permits the imposition of a monthly penalty on a company ranging from...

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Should deposits be included in gross income?

The question of whether deposits should be included in a taxpayer’s gross income has become a contentious topic in recent months following SARS’ increased interest in deposits. Taxpayers are, typically following submission of the ITR14 and subsequent IT14SD, requested to explain why deposits should not be included in gross income. In our view, the rationale...

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Tax on profit only?

In layman’s terms, the general rule is that taxpayers who carry on a trade only pay tax on “profit” (taxpayers registered for turnover tax being one obvious exception to this rule) and not on all amounts received by or accrued to the taxpayer (or “gross income”).  Situations however arise from time to time where a...

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Converting from public to private company – Tax issues

Unlisted public companies may want to convert from public to private companies for various reasons. Often times it is the free transferability of shares that cause a concern where there is disagreement at shareholder level and the risk of having a third party introduced as shareholder becomes high.   Where such a conversion is indeed pursued,...

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Leasehold improvements – Tax Deduction

Taxpayers who rent their business premises often erect improvements to the premises and the cost of this can be quite substantial. A tax benefit in the form a deduction for such costs assists in alleviating the burden placed on a business. In this article, we investigate some of the requirements for claiming a deduction for...

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Transport services to employees – it is not taxable

On 22 March 2017 SARS issued Binding General Ruling 42 (BGR42) which deals with the question of whether transport services provided by an employer to his employees constitute a taxable fringe benefit. BGR42 follows Binding Private Ruling 262 (BPR262) where a similar question was placed before SARS for a private ruling. In BPR158, SARS ruled...