Category Archives: Tax

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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Register for tax

If you need to register for tax,  confused or uninformed, we will have no problem in providing you with the information you require in order to make everything easier for you. If you need to register for tax, follow these instructions to complete your registration: You will need to complete the IT 77 form which is available from a SARS branch office or provided on their website. Once the form has been completed, you should visit your nearest SARS Bbranch office to hand it in.…

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International tax planning

The place of residence of a company dictates the country that has taxing rights over its income and the basis upon which that income would be taxed. Similar to many other countries South Africa taxes its residents on a worldwide basis. A company is considered to be resident in South Africa if it was incorporated established or formed in the Republic or has its place of effective management in the Republic but excluding an international headquarter company. Company tax is also applied to non-residents carrying…

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Interest on a bond as a deduction

A recently published Tax Board Decision concerned the deductibility of interest on a bond where the proceeds of the bond were utilised to acquire a property to be rented out in order to receive rental income. The taxpayer concerned acquired a new property. She paid the deposit while the remaining portion of the purchase price was covered by a loan secured by a bond taken over existing unbonded property and a second bond over the new property. The taxpayer rented out the existing property and…

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