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Clarity regarding applications for tax clearance to expatriate funds for foreign investment purposes

Posted by: Ibay | Posted on: October 5th, 2015 | 0 Comments

It is important to note that SARS is obliged to ensure that taxpayers are fully tax compliant before approving a clearance for the funds to be expatriated.

All applications, irrespective of the amount are subjected to a risk evaluation.  SARS continue to apply processes which best deals with the risks related to these applications.

To clarify the process:

  • SARS evaluates all applications for Foreign Investment purposes, regardless of the amount involved in terms of a standard internal operating process.
  • In this process, SARS applies various risk rules to ensure that taxpayers are fully compliant.  The risk rules applied during this process are not dependant on the threshold set for exchange control purposes.
  • All applications, irrespective of the amount involved, must be completed on a FIA001 form which must be submitted to a SARS branch.
  • For cases up to R4 million, a Tax Clearance Certificate (TCC) is issued and printed when it is approved.  These TCC’s are collected at a SARS branch.
  • Similarly, for cases above R4 million, once approved, a TCC is also issued by way of a Letter of Compliance by the SARS Case Selection Division and is sent by e-mail to the taxpayer.
  • Once issued, the abovementioned TCC or Letter of Compliance can be presented to the relevant Commercial Bank for processing.

For more information visit the SARS website on www.sars.gov.za, or call the SARS Contact Centre on 0800 00 SARS (7277).

 

 

Author:   SARS

 

 

SARS increases the mandatory foreign allowance audit threshold

Posted by: Ibay | Posted on: October 5th, 2015 | 0 Comments

SARS has increased the threshold for mandatory audits for applications in terms of the foreign investment allowance.  The threshold has been increased from R4 million to R10 million.

This new threshold now corresponds with the increased threshold announced by Finance Minister Nhlanhla Nene in the national budget in February.  This increase in the allowance was aimed at allowing taxpayers to take up to R10 million out of the country in a relatively swift manner.  In practice, applications were delayed as all applications exceeding R4 million were flagged for an audit – as it was under the previous threshold – and this process normally took a few months to complete, whereas applications for amounts less than R4 million were usually granted in a few days.

Individuals who have already applied for a foreign tax clearance of up to R4 million in 2015, can now apply for the balance of R6 million under their annual R10 million allowance before 31 December 2015.  As these applications will no longer be handled by SARS special audit unit, we can expect the same two- to three-day turnaround times as before on the FTCC (foreign tax clearance certificates) applications.

 

Author:   Moneyweb’s Tax Breaks

All Foreign Companies with SA sourced income must file tax returns for 2015

Posted by: Ibay | Posted on: October 5th, 2015 | 0 Comments

SARS has released the Notice to Furnish Returns for 2015 setting out who must submit an income tax return for the 2015 year of assessment.

The 2015 Notice differs in three respects to the 2014 Notice:

Any foreign company or trust with South African sourced income must file a tax return.

This is the most significant change. In the past, a foreign entity was only obliged to file an income tax return if it:

  • carried on a trade through a “permanent establishment” in South Africa;
  • derived a capital gain sourced in South Africa,
  • or had South African sourced “service income”.

The first two tests remain. However the third test has been amended to replace the reference to “service income” with any “income”.

“Income” is defined in the Income Tax Act, No. 58 of 1962 to mean gross income less exempt income. A foreign company therefore need not file a return if its only South African sourced income is exempt from income tax and the other tests do not apply.

Residents holding foreign assets valued at over ZAR 200 000 are obliged to file

The Notice increases the threshold at which the value of foreign assets held by a resident individual will trigger a tax filing obligation. The threshold has increased from SAR 100 000 to ZAR 200 000.

Individuals earning amounts of less than ZAR R350 000, that are subject to PAYE, are not obliged to file

Where an individual only earns remuneration which has been subject to PAYE, he or she need not file a return if the amount of remuneration is less than R350 000. This threshold was previously ZAR 250 000.

The revised filing requirement for non-resident companies and trusts will impact many foreign investors who have neither a permanent establishment nor capital gains in South Africa and did not previously need to prepare and submit tax returns. Such companies will need to carefully consider whether they have South African sourced income or not during the 2015 year of assessment, which is often a very technical analysis.

Increased scrutiny from SARS can be expected with respect to foreign companies filing for the first time, particularly in relation to the purported non-existence of a permanent establishment.

The article first appeared on webberwentzel.com
Author: Webber Wentzel

2015 Budget Speech Summary

Posted by: Ibay | Posted on: March 9th, 2015 | 0 Comments

The following is a summary of the tax related budget proposals announced by the Minister of Finance on 25 February 2015.

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Employment Tax Incentive (ETI)

Posted by: Ibay | Posted on: March 5th, 2015 | 0 Comments

Why is there an ETI?

Millions of young South Africans are excluded from participating in economic activity, and as a result suffer disproportionately from unemployment, discouragement and economic marginalisation. High youth unemployment means young people are not gaining the skills or experience needed to drive the economy forward. This lack of skills can have long-term adverse effects on the economy.

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