Presentation Footer1 The South African Institute of Chartered Accountants (SAICA) presentation to...
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Presentation Footer 1 The South African Institute of Chartered Accountants (SAICA) presentation to the Standing Committee on Finance Presented by: Piet Nel: Project director: Tax Wessel Smit Member of SAICA’s tax committee
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Transcript of Presentation Footer1 The South African Institute of Chartered Accountants (SAICA) presentation to...
Presentation Footer 1
The South African Institute of Chartered Accountants
(SAICA) presentation to the Standing Committee on Finance
Presented by:Piet Nel: Project director: Tax
Wessel SmitMember of SAICA’s tax committee
2SAICA presentation to ScoF – August 2012
22 August 201222 August 2012
Presentation to ScoF
Retrospective effective dates
Employer provided motor vehicle
Fringe benefits
International tax
Sundry and other issues
Additional medical expenses tax credit
Debt reductions for less than full consideration
Fair value and market-to-market
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Retrospective proposed dates of commencement
Draft Taxation Laws Amendment Bill, 2012
Hybrid equity – 1 April 2012
SAICA presentation to ScoF – August 2012
The effective date of the increase in the dividends tax rate and other related amendments
Rates and Monetary Amounts and Amendment of Revenue Laws Bill
Draft Taxation Laws Amendment Bill, 2012
Amendments to the dividends tax legislation – 1 April 2012
Dividends declared by listed companies (dividends tax)
Draft Tax Administration Amendment Bill, 2012,
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Additional medical expenses tax creditPages 2 – 4 of the SAICA submission
Not clear how it will apply
in cases of superannuation, ill-health or other infirmity
Impact on payroll systems (PAYE)
SAICA presentation to ScoF – August 2012
It does not recognise the expected increase in cost of medical care
For taxpayers under 65 (25% and 7,5%) limited instances where deduction will be available
where the individual turns 65 during a year of assessment
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Employer provided motor vehicle
Pages 6 – 12 of the SAICA submission
‘operating lease’
‘the actual cost to the employer incurred under that operating lease’
The treatment of the cost of fuel
SAICA presentation to ScoF – August 2012
The definition of an operating lease (as defined in section 23A of the Income Tax Act) is too narrow.
Not clear what this must include
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Debt reductions for less than full consideration
Page 27 of the SAICA submission
Reduction in base cost of assets
The interaction between section 19 and section 24J(4A) where the debt reduction relates to a financial instrument
The capital gain legislation provided relief for liquidating companies in certain instances
SAICA presentation to ScoF – August 2012
The link with the capital gain provisions must be made (paragraph 20(3)(b))
The debt reduction regime should provide similar relief
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Fair value and market-to-market
Page 30 - 42 of the SAICA submission
Proposed effective date of 31 December 2012 to be reconsidered
A definition of ‘hedge’ or ‘hedging‘ needs to be included in the legislation
Expanded definition of ‘covered persons’
SAICA presentation to ScoF – August 2012
Complex legislation
Impact of fair value accounting on previous global financial crisis
IFRS might change – could effect tax legislation
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International tax
Page 45 – 52 of the SAICA submission
Definition of resident: Effective management – 75% rule
The post-transaction requirement for cross-border asset-for-share transactions – the law does not give effect to the intention as expressed in the Memorandum
SAICA presentation to ScoF – August 2012
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Sundry issues
Mentioned in budget – not addressed in the draft legislation
Provisional tax
Addressed in the Draft Tax Administration Amendment Bill
SAICA presentation to ScoF – August 2012
Clarification of date of registration for value-added tax purposes
Introduction of compulsory (automatic) penalty questioned
Regulation of tax practitioners
Addressed in the Draft Tax Administration Amendment BillIntroduction of controlling bodies and the regulatory body
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Other matters raised in the SAICA submission
Interest incurred in acquisition transactions
Corporate rules
Residential – stand alone submission
SAICA presentation to ScoF – August 2012
The final dividend cycle and the STC credits
Fringe benefits
