For years of assessment ending on / after 31 March 2023 the corporate income tax rate will reduce from 28% to 27%. How will this impact the annual financial statements?
The Tax Administration Act No. 28 (2011) (“TAA”) allows the South African Revenue Service to provide and procure administrative assistance to and from foreign tax authorities under international tax agreements. Such administrative assistance can be effected in the form of an automatic exchange of information request.
The Tax Administration Act No. 28 (2011) (“TAA”) prescribes the powers and duties of SARS and aims to ensure that tax is effectively and efficiently collected. Of late, however, it has been our experience that there has been an increase in the turnaround time within which SARS attends to corporate tax compliance matters.
For a summary of some of the proposed corporate tax policy and administrative adjustments resulting from the 2022 annual tax policy review,
On 19 January 2022, the 2021 Taxation Laws Amendment Act was promulgated. There are some significant amendments that will impact corporate tax compliance,
For any tax system to be fair, effective and efficient, it has to be flexible. Current international tax rules have created certainty by facilitating the implementation of arm’s length principles and attempting to eliminate double taxation. However, increased digitalisation of various economic sectors has emphasised that the current international tax rules are not adequately designed to accommodate business models that do not require physical presence in an enterprise’s target markets and where value creation is driven mainly by intangible assets.
Wealth accumulation is generally perceived to signify the achievement of a particular status, financial or otherwise, in society. Of late, such status may also have resulted in attaining membership to SARS’ new exclusive club for high-net worth individuals which, unfortunately, does not have an ‘opt out’ button.
Of late, it appears as if the courts are increasingly leaning towards the interpretation of tax law in a manner that is in accordance with constitutionally compliant precepts. This emphasises that the interpretation of tax law is evolving on a continuous basis and that now, more than ever, the outcome depends on the facts and circumstances of each case. This interpretative evolution has even resulted in a court disregarding a SARS Interpretation Note in making its ruling.
The recent Absa Bank Limited and Another v Commissioner for the South African Revenue Service (21825/19)  ZAGPPHC 414 (25 August 2020) judgement, highlighted the importance of knowing the actions that SARS is allowed and required to take, the due process to be followed when disputing an assessment and your rights as a taxpayer.
In the 2021 Budget Speech, Finance Minister Tito Mboweni indicated that South Africa has a relatively high corporate income tax rate in comparison with other countries. Government’s policy intent is to reduce the number of tax incentives, expenditure deductions and assessed loss offsets available to corporate taxpayers, with the view of lowering the corporate income tax rate over the medium term. In line with Government’s policy objectives, it was announced that the corporate income tax rate will reduce to 27% for companies with years of assessment commencing on or after 1 April 2022. For a summary of other corporate income tax proposals: