Excise Tax is indirect duties, levies and taxes imposed on certain locally manufactured and imported goods, which are consumed in South Africa. Excise Legislation makes provision for certain goods to be taxed at the closest point to where they are manufactured. The revenue-raising objective of Excise Tax is to finance…

I, for one, never wish to pay SARS more tax than necessary. In fact, we pay too much in comparison with worldwide averages. This article explains how Section 7E of the Income Tax Act prevents just that when SARS owe a taxpayer interest. Avoid double taxation at all costs. This…

Income Tax Act 58 OF 1962, Section 12R(4)(b)Binding General Ruling (BGR) dated 22 February 2022 The Department of Trade and Industry has established various special economic zones (SEZ's) within designated areas in South Africa. SEZ's are geographically designated areas of a country set aside for specifically targeted economic activities, supported…

SARS updated their Employers Guide for Tax Allowances related to Subsistence Allowance, Travelling Allowances and Public Office Holder Allowances in line with the budget presented in February 2022. SUBSISTENCE ALLOWANCE Section 8(1)(a) read together with section 8(1)(c) of the Income Tax Act No. 58 of 1962 (the Income Tax Act).…

Construction Industry Development Board (CIDB) Construction plays a vital role in South Africa’s economic and social development. It provides the physical infrastructure and backbone for economic activity. It is also a large-scale provider of employment. All contractors wishing to tender for construction projects in the public sector must be registered…

SARS published a Guidance Note in March 2022 discussing matters of compliance with Section 37A and mining rehabilitation. This SARS Note provides guidance on the interpretation and application of section 37A which deals with payments made by persons to a mining rehabilitation company or trust where that company or trust…

SARS released an Interpretation Note in March 2022 for public comment due on or before 27 May 2022. The relevant law is Section 222(5) of the Tax Administration Act. This Note provides clarity on the interpretation and application of the phrase “maximum tax rate applicable to the taxpayer” used in…

Tax incentives are applied to encourage certain behaviours and activities by providing businesses and individuals with favourable tax treatment. The introduction of a tax incentive is generally based on a social, economic or environmental need that has been identified and can be alleviated by the actions or behaviours of taxpayers…

VOLUNTARY DISCLOSURE RELIEF SARS allows taxpayers to avoid criminal prosecution and regularise their tax affairs by making a disclosure under the VDP. A successful VDP application allows for an applicant to receive waiver of penalties and to settle outstanding tax liabilities with SARS. The SARS Voluntary Disclosure Programme (VDP) is…

Section 20(2) of the Income Tax Act defines an “assessed loss” as “any amount by which the deductions admissible under section 11 exceeds the income in respect of which they are admissible”. An assessed loss from a trade carried on by a taxpayer for a specific year of assessment, therefore,…