Below, please find issue 127 of ENS' tax in brief, a snapshot of the latest tax developments in South Africa.
case law
- C:SARS v Tunica Trading 59 (Pty) Ltd
(1252/2022) [2024] ZASCA 115
- Tunica Trading 59 (Pty) Ltd (“Tunica”) sought a refund from the South African Revenue Service (“SARS”) for excise duty and fuel levy on fuel purchased from Masana Petroleum Solutions, which it sourced from BP Southern Africa, a licensed customs and excise manufacturing warehouse. SARS denied the refund arguing the refund was not obtained directly from a licensed warehouse.
- Tunica issued a notice to SARS of its intention to institute legal proceedings in terms of section 96 of the Customs and Excise Act, 1964 (“Customs and Excise Act”). SARS responded to the notice.
- The court held the following:
- SARS' response was not a reviewable decision under the Promotion of Administrative Justice Act, 2000;
- Section 64F of the Customs and Excise Act requires fuel to be obtained directly from a licensed warehouse; and
- Tunica did not comply with the statutory requirements for a refund, as it purchased fuel from an intermediary.
- Find a copy of the judgment here.
SARS publications
- Tax Practitioner Connect | Issue 54
- The new issue focusses on filing season, dates and changes and provides a list of updated guides
- Find a link to the issue here.
- Government Connect | Issue 20
- The new issue focusses on filing season, dates and changes and provides a list of updated guides.
- Find a link to the issue here.
- Submitting returns older than five years
- SARS has recently received complaints from tax practitioners regarding difficulties in accessing their clients' returns older than five years.
- To address this issue, tax practitioners are required to reconfirm their status on eFiling before attempting to request or submit such returns. Once their status has been successfully reconfirmed, tax practitioners may proceed with these requests or submissions.
- Additionally, it has been noted that tax administrators linked to tax practitioners are currently unable to request or submit old returns, placing an undue burden on the tax practitioners.
- In response, SARS has implemented a change allowing tax administrators linked to tax practitioners to request or submit returns older than five years.
- Interpretation Note (“IN”) 132 |
Persons not eligible to register as a tax practitioner and
deregistration of registered tax practitioners for tax
non-compliance
- This IN provides guidance on when, due to tax non-compliance, a person may not register as a tax practitioner, and when SARS must deregister a registered tax practitioner, as well as the period of non-qualification for registration
- Find IN 132 here.
- Public Notice 5077 | Extension of date to request a reduced or
additional assessment
- Public notice 5077 of Government Gazette 50986 dated 26 July 2024 has been published in terms of section 95(6) of the Tax Administration Act, 2011 extending the date by which a taxpayer, eligible for automatic assessment, must submit an income tax return.
- Find the notice here.
- Draft Guide | Allowances and deductions relating to assets used
in the generation of electricity from specified sources of
renewable energy
- This draft guide provides general guidance on the tax incentives available for the generation of electricity from specified sources of renewable energy under section 12B(1)(h) and (i) of the Income Tax Act, 1962 (“ITA”), the enhanced form of this deduction under section 12BA of the ITA and the deduction under section 12U of the ITA for amounts actually incurred on the construction of any road, the erecting of any fence and a foundation or supporting structure designed for such a fence as well as on the cost of the improvements to any road, fence or foundation or supporting structure that are used for the generation of electricity from specified sources of renewable energy.
- The due date for public comment is 30 August 2024.
- Find the draft guide here.
- Draft Guide | Mineral Royalty Petroleum Resources Royalty Act
- This draft guide provides a general overview of the application of the Mineral and Petroleum Resources Royalty Act, 2008 and administration of the royalty under the Mineral and Petroleum Resources Royalty (Administration) Act, 2008.
- The due date for public comment is 13 September 2024.
- Find the draft guide here.
- Updated Guide | Complaints functionality on eFiling
- The Guide to Complaints functionality on eFiling has been updated to align with the latest list of Recognised Controlling Bodies.
- Find the updated guidehere.
advance tax ruling
- Binding Private Ruling (“BPR”) 405
| Third-party backed shares and hybrid interest
- This BPR determines whether cumulative redeemable preference shares will be issued for a qualifying purpose and whether they will constitute third-party back shares.
- The funds raised from the issue of the preference shares will be advanced as a loan and the BPR determines whether the return received in respect of the loan will be regarded as hybrid interest.
- Find the BPR here.
- BPR 406 | Supplementary pension fund payments
- This BPR determines that Belgium has the taxing rights to amounts to be received by or accrue to South African residents under Belgium's supplementary pensions system.
- Find the BPR here.
- Binding Class Ruling (“BCR”) 89 |
Qualifying purpose and third-party backed shares
- This BCR determines whether cumulative redeemable preference shares will be issued for a qualifying purpose and whether they will constitute third-party back shares.
- Find the BCR here.
- Binding General Ruling (“BGR”) 73
| Meaning of taxable income for purposes of setting off a balance
of an assessed loss of a company
- This BGR provides direction for the consistent application of the limitation on the setoff of any balance of assessed loss by a company under section 20(1)(a)(i) of the ITA as amended by section 18 of the Taxation Laws Amendment Act, 2021.
- Find the BGR here.
customs and excise
- Automation of Customs and Excise bonds | Guarantee Management
Service (“GMS”) system
- SARS is enhancing its digital platforms to help traders and taxpayers meet their tax and customs obligations with ease. As part of this modernisation, SARS is automating the management of customs and excise bonds.
- This includes the introduction of the GMS system, which will serve as a comprehensive platform for managing these bonds through eFiling to provide traders and taxpayers with bond-information records.
- From 26 July 2024, the GMS system will process cases
automatically by:
- notifying traders and taxpayers of SARS requests, surety receipt and cancellation; and
- providing taxpayers and traders, upon request, with a list of guarantees/bonds held by SARS.
- For this phase of the implementation, only clients with access to an eAccount on eFiling can view their list of bonds held with SARS.
- Find the steps here.
- Environmental Levy on Electricity Generation
- The Excise Environmental Levy on Electricity Generation policy
has been updated in the following manner:
- to align the policy with Note 2(a) of Schedule 1 Part 3B; and
- to reference the requirements of Note 6 of Schedule 1 Part 3B in the policies.
- Furthermore, the Environmental Levy on Electricity Generation External Guide has been converted from a manual.
- Find the updated policy here.
- Find the updated guide here.
- The Excise Environmental Levy on Electricity Generation policy
has been updated in the following manner:
international
- Organisation for Economic Co-operation and Development
(“OECD”) | Pilot launch
- The OECD announced a pilot phase to monitor the application of the Hiroshima Process International Code of Conduct for Organisations Developing
- Advanced Artificial Intelligence (“AI”) Systems (“Hiroshima Code of Conduct”).
- This initiative will test a reporting framework intended to gather information about how organisations developing advanced AI systems align with the actions of the Hiroshima Code of Conduct and is a significant milestone under the G7's ongoing commitment to promoting safe, secure and trustworthy development, deployment and use of advanced AI systems.
- Find the press release here.
- Find a copy of the Hiroshima Code of Conduct here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.