The secondary-tax-on-companies ("STC") will come to an end on 31st March 2012. The STC regime was introduced in 1993 with a view to encouraging investments in the form of the re-investment of retained earnings rather than distribution to shareholders. The move was aimed at ensuring investment in the SA market even at the time when the economy was unstable due to political changes. Failure to re-invest the company after-tax profits would result in any distribution to shareholders being subjected to an additional tax. The STC was thus a punitive tax over and above the tax on company profits.
The IASB and FASB are developing joint proposal for the revenue recognition standard following decade of documented corporate revenue recognition problems. The purpose of the joint proposal for revenue recognition is to provide more transaparency to the investors of the amount of revenue recognised, as it is intended to make sure that the amount recognised as revenue almost equates to the amount of cash that would be ultimately collected or received from contracts.
The proposed National Health Insurance (NHI) is supposed to be a financing system that will make sure that all South Africans are provided with essential health care, regardless of their employment or economic status, Section 27(1) a and Section 27(1) b of our South Afican constitution , stipulates clearly that every citizen has a right to healthcare and that the state must ensure that it take legal measures within its available resources to meet these social needs.
Keyman insurance policies are typically taken out by employers to cover them against the loss of a key employee or director. The cover would normally provide some cash to the employer where an employee's services are lost due to retirement, serious illness or death. The National Treasury recently raised concerns about the bene ts ultimately paid to employees by employers. In addition, National Treasury was of the view that the deduction granted to employers under section 11(w) of the Income Tax Act No. 58 of 1962 ("the Act") had to be reviewed. This led to the amendment of the Act at the beginning of January 2011.
The apportionment of Input VAT, in cases where a Vendor is involved in buying and selling taxable and exempt supplies is not an easy task. In this Issue we look closely into some of the complexities that di erent taxpayers have to deal with in order to ensure that they are fully compliant with the relevant sections of the Value Added Tax No.89 of 1991.
The Value-added-tax Act provides in section 16(3) that the vendor may claim any amount of input VAT paid or payable to the supplier in the case where the expense incurred or the assets acquired will be used in the course of making taxable supplies. The challenge faced by many vendors is the allocation of the input VAT in the correct tax period in compliance with the timing of the supply as required by section 9 of the VAT Act. For example, input VAT on nance leases should be claimed upfront on the recognition of an asset and not necessarily when lease payments are made on a periodic basis.
Retirement Savings are one of the key elements, which, if done properly reduces the burden on the fiscus in the longer term...
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In this year's budget, a change has been introduced that will place more responsibility on employers to monitor their employee's business travel through the 20% inclusion of travel and right of use of motor vehicle bene t on employee's PAYE, if the employer is satis ed that an employee will use the car 80% of the time for business purposes. In this issue, we are examining this change more closely and also distinguishing between a Reimbursive travel and a standard travel allowance, and how they have to be treated for tax purposes.
Most employers incentivize their employees through Discretionary awards which they mistakenly do not subject to PAYE, as most of the time they do not go through the payroll system. In this Issue, we examine closely the most common awards given to employees and their PAYE status. These are the Excellent Performance Awards, the Long Term Service Awards and the Bravery Awards
The 2011 bugdet has brought about some interesting changes, some of which are meant to bring some relief to tax payers and some of which are meant to increase revenue to the scus. In this issue we are looking closely into the "Pay-Now-Argue-Later" principle, the Carbon Tax, Fringe Bene ts arising from low interest rates and Transfer Duty
