Tax News - September 2017
1. SARS August 2017 Employer Interim Reconciliation submissions open 15 September 2017
The Employer Interim Reconciliation submission period is now open from 15 September and runs to 31 October 2017. During the Interim Reconciliation submission period, employers are required to submit an Employer Reconciliation Declaration (EMP501) and Employee Income Tax Certificates [IRP5/IT3 (a) s] for the six month period 1 March to 31 August 2017. The interim IRP5/IT3(a)s for the six month period 1 March to 31 August 2017 must not be issued to an employee unless it is a final certificate (where the employee has left the service of the employer or the employer ceased to be an employer on or before 31 August 2017.
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2. Locus Standi for interested parties in legal proceedings with SARS
By Ayanda Masina, Associate in the Shepstone & Wylie Attorneys’ tax team

In the unreported case of Sariette Groenewald v Commissioner for the South African Revenue Service (“the Commissioner”) case no: 4049/2016, the Gauteng High Court had to determine whether a sole member of a close corporation (“the intervening party”) had legal standing in an application. Following the Taxpayer’s liquidation on 28 May 2015 a creditors meeting was held where SARS submitted its claims under the liquidation process for assessed taxes owed by the Taxpayer.
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3. Zero rate and standard rate VAT on export of goods
By Madhi Meyer Steyn

Section 11(1) (a) of the VAT Act (the rate of zero per cent), applies where the supplier has supplied the goods (being movable goods) in terms of a sale, or an instalment credit agreement, and the supplier has exported the goods in the circumstances contemplated in paragraph (a), (b) or (c) of the definition of “exported” in section 1(1).
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4. Tax residence for individuals
By Newtons Accountants

Tax residence is not linked to migration status. In other words, irrespective of which country’s passport one carries, tax residence may still be established in South Africa by virtue of the domestic tests applied by the Income Tax Act. In terms of that Act, an individual will be tax resident in South Africa if either that person meets the criteria of the “physical presence” test, or if that person is “ordinarily resident” in South Africa.
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5. Transfer pricing regulations pertaining to the capital sum of a loan
By Anton Lockem, Head of Tax and Andre Greeff, Candidate Attorney in the tax team,Shepstone & Wylie Attorneys

Prior to 1 April 2012, the South African rules on thin capitalisation provided a safe harbour ratio of 3:1 for debt-to-equity. Thereafter, the thin capitalisation rules were subsumed by the current transfer pricing legislation. Section 31 of the Income Tax Act 58 of 1962 (“the Act”) essentially provides for cross border transactions between connected parties to be at arm’s length. Therefore SARS may, for example, disallow the interest deductions pertaining to interest on that ”thinly capitalised” amount (i.e. on that excessive amount).

According to the Draft Interpretation Note on section 31, the arm’s length nature of the loan agreement must be assessed from the perspective of the borrower as well as the lender.
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The Tax Ombud Judge Bernard Ngoepe has released the final report on the investigation into alleged delays in payment of refunds by the South African Revenue Service (SARS). The final report has findings, comments and recommendations by the Tax Ombud.
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Introducing Sugar Ntwampe as SAIPA’s new Contract Tax Specialist
SAIPA welcomes Ms Sugar Ntwampe to the Technical & Standards team on a fixed term contract with effect from 27 September 2017.

Sugar is the former Branch Manager for the Tax Practitioner Unit in Brooklyn, Pretoria. She brings with her vast experience from SARS. For all your Tax queries, you can contact her at
SAIPA is continuously working on improving our engagement with our members through the SAIPA briefcase which is our Client Relationship Management system (CRM). We encourage you to utilise this platform to log any queries you may have. You will be able to track the progress of your enquiry, and even escalate it if you have not received an answer within a satisfactory time period.
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Have you been struggling with the understanding of some of your client’s International tax transaction?

If so, look no further. The SAIPA Tax Team has developed an International Tax Guide, sponsored by JUTA and Sanlam, to simplify transactions for you. This guide is available for purchase at R50 including VAT excluding postage per copy. To order your copy please email /

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