REVENUE LAWS AMENDMENT BILL
This is a brief description of the main amendments proposed in the Bill. It is recommended that, if you believe that any of these amendments might impact your business, you contact us to seek more specific tax advice.
FACT 1:
Amendments to “dividend” definition and Secondary Tax on Companies (STC)
The dividend definition (section 1) is to be broadened and as a result various amounts will be deemed a dividend and subjected to STC.
• There is a simplification of STC in an intra-group situation.
• Amendments have been made to the CGT provisions dealing with so-called “dividend-stripping”.
• Amendments have been made to the method of taxing capital distributions.
FACT 2:
Section 6quat relief
This section has been extended to allow for deductions of foreign taxes in certain circumstances.
FACT 3:
Deemed capital on sale of shares
The 5-year safe harbour provision has been reduced to 3 years and now applies automatically to all shares, but with certain anti-avoidance provisions relating to fixed property companies.
FACT 4:
Amendments to company reorganisation rules
- Removal of the financial instrument limitations.
- Amendment of “group of companies” definition.
- Impact on Collective Investment Schemes.
FACT 5:
Intellectual property payments
New measures introduce to prevent intellectual property arbitrage and limit deductions.
FACT 6:
Amalgamation of professional and amateur arm sporting bodies for tax purposes
Tax relief for amalgamation of professional and amateur arms and a special allowance for amateur sporting bodies.
FACT 5:
Intellectual property payments
New measures introduce to prevent intellectual property arbitrage and limit deductions
FACT 7:
Amended and new depreciation provisions
- 20 % rolling stock allowance.
- 20 % port assets capital allowance.
- 5 % commercial buildings allowance introduced. New rules for transfers of depreciable property between connected persons.
FACT 8:
Deductions for environmental expenditure
Allowance granted for environmental assets and activities, in certain instances.
FACT 9:
Tax relief for co-operative banks
Co-operative banks now eligible for small business tax relief.
FACT 10:
Exemption for occupational death benefits
New R300 000 exemption in certain circumstances.
FACT 11:
Changes to fringe benefits and deductions for individuals – Residential Acc
Residential accommodation – tax-free residential accommodation for expatriates limited to 183 days.
FACT 12:
Changes to fringe benefits and deductions for individuals – Medical Costs
Medical expenses – tax relief for mandatory medical services.
Refer to the following diagram to assess the possible impact of the Bill to your business
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