There is often uncertainty regarding the tax treatment of expenditure incurred by companies prior to the commencement of trading, and none more so than where a taxpayer incurs foreign exchange differences, usually on funding from a non-resident. This article explores in more detail the basic principles in the tax treatment of these items.
Africa holds 30% of critical minerals globally, and a fourfold increase in global demand is expected by 2030. With the right approach, investing in the African mining sector may yield a favourable return on investment. However, there are several factors that mining businesses should consider when expanding their footprint into Africa.
Retirement planning is not just about saving for the future; it’s a powerful tool for immediate and long-term tax savings that will form an important part of your wealth creation strategy.
Imagine this...A well-prepared benchmarking analysis that is revised when necessary, a Local File, a Master File, and documentation to support all transfer pricing adjustments. Transfer pricing done and dusted. But is it the end of the road?
As multinational enterprises (MNEs) continue to expand their global operations, transfer pricing compliance has become a critical focus area for tax authorities worldwide.
For years, Mauritius applied the arm’s length principle in theory, but without requiring companies to formally demonstrate compliance. This is now changing. The Finance Act 2025 introduces a mandatory transfer pricing documentation framework, marking a turning point for all businesses with cross-border related-party transactions
References to International Financial Reporting Standard (“IFRS”) are littered throughout South African tax legislation. Its influence came under the spotlight on 3 September 2025, when National Treasury retracted its proposed draft tax amendments relating to hybrid equity instruments which sought to align the IFRS and tax treatment of certain preference shares. This article explores in more detail...
The recent High Court decision in Nairobi Bottlers Limited v Commissioner of Domestic Taxes has sparked widespread discussion among international tax professionals, particularly for South African multinationals operating in Kenya. This landmark case highlights the practical impact of Limitation of Benefits (LoB) clauses and raises fundamental questions about the interplay between domestic law and...
The so-called corporate restructure rules which include the roll-over relief provisions are contained in sections 41 – 47 of the Income Tax Act 58 of 1962 (“the Act”).
In BCJ v Commissioner for the South African Revenue Service (2024/8) [2025] ZATC 7 (23 May 2025), a recent Tax Court judgment handed down on 23 May 2025, the court criticised SARS for failing to provide proper reasons when it disregarded a taxpayer’s capital gain following a group restructuring. While the court ultimately found in favour of the taxpayer on the substantive issue, the judgment is a...
When it comes to VAT and the exportation of goods, people usually think, “exports are simple, you just zero rate it!” The exportation of goods is far more nuanced and if it were that easy, there wouldn’t be detailed legislation, interpretation notes and regulations on the matter.
Moving to another country can sometimes come with a lot of anxiety and decisions to be made. Decisive tax planning in both countries before your relocation can help mitigate against penalties and excessive taxes being paid in both countries. Leaving South Africa without obtaining proper tax advice may be a costly exercise.
In this article we examine the employees’ tax (PAYE) risks and reporting obligations for a person or entity when engaging with a personal service provider (PSP).
Lessons from the Commissioner for the South African Revenue Service (SARS) v SC (Pty) Ltd Tax Court Case
Indirect Exports offer valuable opportunities for South African businesses to expand internationally, but navigating the VAT regulations requires caution. When the foreign buyer takes responsibility for arranging transport, the supplier (also referred to as the seller) must meet specific criteria to apply a preferential VAT rate. One of the most crucial requirements is securing proper export documentation...
The Value-Added Tax Act No. 89 (1991) regards certain activities pertaining to cryptocurrency as financial services. But what if the supply involves a crypto asset and not cryptocurrency?
On 15 May 2025, the High Court of Gauteng held that Leo Cash and Carry (Pty) Ltd were not in contravention of Exchange Control Regulations to the extent that this applied for the forfeiture of funds from their money market bank account.
The South African Revenue Service (SARS) has officially shifted gears in its approach to taxing crypto trading income. The SARS Crypto Asset Unit, established to monitor and enforce tax compliance in the digital asset space, has begun issuing assessments and audit notices to individuals, many of whom are only now realising that their crypto trading gains are taxable.
During VAT reviews, we often encounter vendors claiming input tax deductions for expenditure related to staff welfare, meeting refreshments, year-end functions and client lunches. Vendors contend that the expenditure is business-related and expended for purposes of trade.
Section 82 of the Companies Act No. 71 (2008) states that a company may be deregistered with the Companies And Intellectual Property Commission (“CIPC”) when the affairs of a company have been completely wound up, and it has ceased to carry on business.
When considering the potential acquisition of another company’s shares, a key concern is the ‘tax health’ of the target entity or group.
The post-pandemic era has witnessed a dramatic escalation in the utilisation of independent contractors in hybrid working environments. Additionally, many job-seekers are looking more at flexible and contractual work to fit their private life demands.
Following the change in the foreign employment exemption resulting in only a maximum of R1,25m of a resident’s foreign remuneration being exempt from income tax in South Africa, the South African Revenue Service (“SARS”) have enhanced their tax directive system to allow employers to apply for a directive to reduce the PAYE to be withheld from the remuneration paid to the employee that is also taxed...
The 2025 Fiscal Budget has allocated additional funding to SARS who will deploy these resources, inter alia, to pursue debt that is owed to the organisation and outstanding returns. These funds will also be used to modernise and strengthen SARS technological capability. Now, more than ever, taxpayers should make sure that their (tax) house is in order.
On 13 November 2024, National Treasury issued a discussion document setting out various proposals regarding a revised tax regime for Collective Investment Schemes (“CIS”). Public comment was called for by 13 December 2024, whereafter a workshop with relevant stakeholders was held on 17 January 2025.
The employment tax incentive (“ETI”) was introduced on 1 January 2014, to help incentivise South African employers to employ young people and provide skills and experience to young South Africans who are unemployed and possibly discouraged in finding employment opportunities.
While the spotlight has predominantly been on the 2% VAT increase in what seems to be a conventional budget speech, it is crucial not to overlook the nuanced provisions embedded within the budget aimed at enhancing future revenue collections.
The 2025 Budget Speech has proposed amendments to section 20A of the Income Tax Act No. 58 of 1962 (“the IT Act”) that will aim close existing loopholes by redefining the application of the ring-fencing rules. South Africa’s tax system has long grappled with the challenge of balancing legitimate tax relief with the risk of tax abuse. Section 20A of the IT Act was introduced to curb the improper use...
UDZ Incentives and Transfer Duty Adjustments: A Catalyst for Urban Renewal
National Treasury has not renewed the accelerated 125% capital allowance related to renewable energy assets. We explore below the remaining capital allowances available for renewable energy assets.
“Navigating M&A with Tax DD: Trends, Grants, and Common Pitfalls" "Tax Due Diligence in M&A: Trends, Tips, and Tricks for Success"
In an increasingly globalised economy, multinational enterprises (MNEs) have become adept at leveraging differences in tax systems to minimize their tax liabilities. This practice, known as Base Erosion and Profit Shifting (BEPS), has led to significant revenue losses for countries worldwide. To address these challenges, the Organisation for Economic Co-operation and Development (OECD) and the G20...
In X and Another v Commissioner for the South African Revenue Service (52/2023) [2024] ZATC 12 (2 December 2024), the Tax Court of South Africa dismissed an application made to the court seeking validation of the objection submitted to SARS.
On 13 November 2024, National Treasury issued a discussion document setting out various proposals regarding a revised tax regime for Collective Investment Schemes (“CIS”). Public comment was called for by 13 December 2024, whereafter a workshop with relevant stakeholders was held on 17 January 2025. We unpack our perspectives on the consultation process to date.
Following an announcement made by the Minister of Finance in the 2024 Budget review, Circular 13 of 2024 came into effect on 26 November 2024. The circular addresses the changes made to exchange control ruling B.3(C) dealing with royalties and fees payable by South African resident entities to non-resident parties.
Provisional taxpayers are required to submit two bi-annual provisional tax returns in a tax year. The purpose of provisional tax is essentially a mechanism whereby normal income taxes are collected in advance.
Section 20 of the Income Tax Act No. 58 (1962) (“IT Act”) provides for the utilisation of prior year assessed losses against taxable income derived by a company. Certain legislative limitations impact the quantum of the assessed loss that may be utilised by companies.
The South Africa Revenue Service (“SARS”) has the ability to issue revised assessments in terms of the Tax Administration Act No.28 of (2011) (“TAA”). In this regard, SARS is bound by regulations with regards to the period in which SARS can issue revised assessments. This period is referred to as the ‘period of limitations for issuance of assessments’ or the so-called ‘prescription period’.
Section 12P of the Income Tax Act No. 58 (1962) (“IT Act”) plays a crucial role in fostering economic development by providing tax relief for certain qualifying government grants.
The 2024 Taxation Laws Amendment Bill (“TLAB”) introduces amendments specifically addressing the interaction between section 7C and section 31 of the Income Tax Act No. 58 (1962). Section 7C deals with interest-free or low-interest loans to trusts, and section 31 governs transfer pricing in cross-border transactions. The aim is to provide clarity and ensure that lending to offshore trusts is treated...
On 11 December 2023, the South African Revenue Service introduced the issuance of estimated assessments in respect of value-added tax.
Over the past few years, the South African Revenue Service (“SARS”) have been enhancing their information gathering tools and technical skills in respect of South African trusts.
SARS has finally provided some long-awaited guidance on the meaning of the term ‘similar finance charges’. In this article, we unpack the draft Interpretation Note issued in September 2024, to help you understand how SARS is likely to interpret this definition going forward.
Whether you are a seasoned tax professional or new to the field, navigating a tax due diligence process can be a complex and daunting task. This article offers our insights and practical advice to help you navigate the intricacies of a tax due diligence.
In determining a tax liability, the taxpayer will generally take a number of tax positions. To avoid tax disputes and the imposition of understatement penalties, it would be prudent to consider obtaining tax advice before a tax position is taken.
It is not easy being responsible for the tax function of a business in South Africa. The chances are that there are insufficient tax resources and that the tax function is perceived simply as a back-office compliance cost centre.
According to the 2023 South African Energy Sector Report, the primary source for South Africa’s energy supply is still coal. Renewable energy contributed only 1% to the total energy supply in 2021, while 80% of domestic energy production was generated by domestically produced coal.
The South African Revenue Service (“SARS”) issued Binding Private Ruling 410 (“BPR 410”), providing insights into a technical aspect of South African income tax law concerning controlled foreign companies (“CFCs”) and their interaction with various sections of the South African Income Tax Act. Released on 11 September 2024, this ruling clarified the income tax and capital gains tax (“CGT”) consequences...
With the growth in cross-border transactions, it is anticipated that the supply of goods and services to non-resident companies will increasingly be scrutinised by the South African Revenue Service. Therefore, it is important that South African vendors familiarise themselves with the requirements of the value-added tax provisions relating specifically to supplies made to recipients that are not residents...
South African expatriates working abroad in the mining industry must deal with complex tax challenges due to the interplay of South African tax laws and those of host countries.
The 2024 Draft Taxation Laws Amendment Bill (“2024 draft TLAB”) was published on 1 August 2024. It proposes that legislative amendments be effected to require input tax deductions to be claimed in the original tax period in which the entitlement to the input tax deduction arose.
Originally announced by the National Treasury in their National budget address in February 2021, it was proposed that changes were to be made in the retirement savings system of an individual to try and encourage saving for retirement and to prevent South Africans from purposefully resigning when facing financial hardship in order to access their retirement funds. The proposed changes aim to promote...
On 17 January 2023 the South African Revenue Service (SARS) issued Interpretation Note 127 (IN 127) providing long awaited guidance as to the treatment of cross-border intra-group funding transactions for transfer pricing purposes.
If you have been living outside of South Africa for an extended period of time or regard yourself as a person who has emigrated from South Africa, this document is important for you to read.
It is proposed that changes be made to the VAT Act by the insertion of section 18D which will deal with the deemed change in use adjustment required when a dwelling is let for the first time if the dwelling remains permanently in the scope of VAT and the deemed supply made when the dwelling is subsequently sold. Section 18D is proposed to come into effect on 1 April 2022.
Have you accepted the responsibility as a fiduciary representing a Public Benefit Organisation (“PBO”) and do you know what you are responsible for?
Since the forced lockdown experienced in 2020, many employees have had to work from home. In some instances, due to a shift in corporate culture, employees have chosen to continue this practice by no longer travelling to a fixed office on a daily basis. In some cases people have converted space at their home to function as their home office.
It has been more than three years since SARS’s media statement on cryptocurrencies. In this statement SARS stated that it will apply “normal income tax rules” to cryptocurrencies when assessing whether a gain is revenue or capital in nature and that crypto assets are not seen as currency for income tax purposes.
With the global online age it is easy for a taxpayer to advertise and rent out part of their home, or investment property, to paying guests. Many people are using online platforms, who can then monitor booking and assist with the logistics in the collection of the rental income. As easy as it is for a home owner to add his property to such an online site, so, can SARS, as the “prospective” renter,...
On 31 August 2020, the South African (“SA”) Tax Court delivered judgement in the case referred to as SARSTC 14302. The court ruled against the taxpayer in respect of an application for discovery of documents relating to an underlying transfer pricing assessment matter. The case, as well as the underlying transfer pricing dispute, are briefly summarised below.
An APA is an agreement between a taxpayer and SARS in terms of which the transfer pricing methodology for the pricing of a taxpayer's cross-border related party transactions are determined in advance for future years.
On 12 November 2020 the South African Revenue Service (SARS) issued a notice extending the deadline for the submission of Country-by-Country Returns (CbCR) under Notice No. 1117 published in Government Gazette No. 41186 dated 20 October 2017, for Reporting Fiscal Years commencing before 1 March 2020.
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