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Value added tax (VAT)

Value Added Tax (VAT) was introduced on 30 September 1991 at 10% and increased to 14%  on 7 April 1993. The VAT system comprises three types of supply Standard-rated supplies – supplies of goods and services subject to the VAT rate in force at the time of supply Exempt supplies – – supplies of goods and services subject to the VAT rate in force at the time of supply Zero-rated supplies – supplies of certain goods or services subject to VAT at zero percent. The…

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What is my tax number?

Where is my tax number? If you are thinking about your tax number, you may be busy completing your e-filing or tax return? Your tax number should be printed on your tax return already! But if you need your tax number for correspondence or to provide to your tax consultant, tax practitioner,  financial consultant or any one of the other hundreds of reasons, you can start looking for your tax number on your payslip or on your IRP5 issued by your employer. You can also…

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The capital gains tax consequences of resident trusts

INTRODUCTION When one considers creating a trust regard must be had not only to the reason why a trust is chosen as a vehicle as apposed to a partnership company or close corporation but also to the provisions relating to capital gains tax income tax donations tax value added tax (VAT) estate duty and transfer duty. The introduction of Capital Gains Tax (CGT) on 1 October 2001 complicated the use of trusts from a fiscal point of view. The following issues are discussed in this…

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The difference between tax avoidance and tax evasion

Tax avoidance is generally the legal exploitation of the tax regime to your own advantage. This is done in an attempt to reduce the amount of tax that is payable by means that are withing the law whilst disclosing material information to SARS. Tax evasion is the general term for when individuals, firms, trusts and other entiteis trying to evade the payment of their taxes by illegal means. This is characterised by deliberately misrepresenting or concealing the true state of their affairs to the tax…

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Tax avoidance

As a general rule a transaction agreement or arrangement must have a commercial purpose in order to be classified as acceptable for the purpose of income tax. Also such a transaction agreement or arrangement must be based on actual facts and circumstances and must be legally enforceable within the parameters of the South African law generally. More specifically the Income Tax Act contains provisions to curb tax avoidance schemes. For the purpose of this article we deal with only two examples of such provisions namely…

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Valued added tax – VAT

Who is liable for the payment of vat? VAT is levied on all supplies made by registered vendors in the course or furtherance of their enterprises. Only a registered vendor may levy VAT. A vendor making exempt supplies or who is not registered may therefore not charge VAT and may not claim back any VAT borne by the enterprise. A vendor that makes taxable supplies of more than R150 000 per annum must register for VAT. If a vendor makes taxable supplies of less than…

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Tax and Receipts from fraudulant activities

Tax and Receipts from fraudulant activities T The issue in 67 SATC 1789 was whether amounts paid by investors in a fraudulent and unlawful pyramid scheme to the taxpayer were received as gross income within the meaning of section 1 of the Income Tax Act 58 of 1962. The taxpayer acting through different entities and represented by agents solicited many millions of rand from a multitude of investors in a scheme which was fraudulent and unlawful from the outset. The court held that the essential…

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Tax Calendar

The tax calendar has been drawn up with some of the basic taxes and their payment dates. This allows taxpayers to know when they should pay any appropriate taxes. Please note that if a payment date on the tax calendar falls on a public holiday or a weekend, you must pay on the last business day prior to the date. Individuals Tax Season: The tax season for individuals normally runs from July to November for non provisional taxpayers. Provisional taxpayers having until end January to…

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OFFICIAL INTEREST RATES

Interest rates charged on outstanding taxes duties and levies and interest rates payable in respect of refunds of tax on successful appeals and certain delayed refunds DATE FROM DATE TO RATE 30.06.1982 7.50 01.07.1982 31.08.1984 10 01.09.1984 31.05.1989 15 01.06.1989 31.03.1994 18 01.04.1994 30.11.1998 15 01.12.1998 30.04.1999 19 01.05.1999 31.08.1999 16 01.09.1999 29.02.2000 14.50 01.03.2000 30.09.2002 13 01.10.2002 31.03.2003 15.50 01.04.2003 30.06.2003 16.5 01.07.2003 31.08.2003 15 01.09.2003 30.09.2003 14 01.10.2003 30.11.2003 13 01.12.2003 31.10.2004 11.50 01.11.2004 31.10.2006 10.50 01.11.2006 28.02.2007 11.00 01.03.2007 31.10.2007 12.00 01.11.2007…

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Provisional Tax

WHAT IS PROVISIONAL TAX? Where an individual earns taxable income that is not subject to SITE or PAYE deductions such as interest rental or business income he/she must pay provisional tax on this income on a six-monthly basis. Provisional tax is intended to assist taxpayers to meet their tax liabilities on an on- going basis as opposed to paying a large amount once a year on assessment. The provisional tax paid will be offset against the final income tax that the individual has to pay…

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