Below, please find issue 136 of ENS' Tax in brief, a snapshot of the latest tax developments in South Africa.
legislation and draft legislation
- Tariff Amendments 2024 | Customs and Excise Act, 1964
- The tariff amendments notice, scheduled for publication in the Government Gazette, relate to the imposition of provisional payments in relation to anti-dumping duties against the increased imports of U, I and H sections of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded (excluding H- Sections of a height greater than 200 mm), and other angles and shapes of iron or nonalloy steel, of a height of 80 mm or more not further worked than hot-rolled, hot drawn, or extruded, originating in or imported from the People's Republic of China and Thailand (ITAC Report 737)
- The scheduled Notice can be found here.
SARS publications
- Tax Exempt Institutions | Guide to Complete the Application for
Exemption from Income Tax ("EI1") Form
- To qualify for income tax exemption, the applicable entities are required to register for income tax and submit the EI1 form. Applying entities are required to complete the form with the applicable organisation's information and provide the required supporting documents.
- A guide and annexures have been developed to assist organisations applying for income tax exemption with the completion of the EI1 form.
- Find the guide here.
- SARS Guide | Guide on the Allowances and Deductions Relating to
Assets Used in the Generation of Electricity from Specified Sources
of Renewable Energy
- This 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), the enhanced form of this deduction under section 12BA and the deduction under section 12U of the Income Tax Act No. 58 of 1962 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.
- Find the guide here.
- Clarification Note | Automatic Exchange of Information: Additional Compliance Reason Codes
exchange control
- Exchange Control Circular No. 15/2024 | Customer foreign
currency ("CFC") accounts: Settlement over CFC accounts
- Authorised dealers will now be permitted to process legitimate foreign transactions in respect of all current account payments to be paid from CFC accounts. All capital account payments, inter alia loans, equity and dividends are excluded.
- The payments may only be processed provided that the Authorised Dealer concerned has satisfied itself that the transactions are permissible in terms of the various sections of the Currency and Exchanges Manual for Authorised Dealers ("Authorised Dealer Manual") or in respect of which a specific authority has been granted by the Financial Surveillance Department.
- The Authorised Dealer Manual has been updated accordingly.
- Find the circular here.
- Exchange Control Circular No. 14/2024 | CFC accounts:
Settlement, on an agent basis, in foreign currency between resident
entities
- Authorised dealers will now be permitted to process requests by local agents of exporters of goods from South Africa to settle export proceeds in foreign currency over CFC accounts of resident exporters.
- In addition, Authorised Dealers will be permitted to process requests by resident entities, excluding state-owned companies, purchasing goods from local suppliers that must import certain or all of the components from abroad, to settle only the cost of the imported component(s) in foreign currency over the respective CFC accounts.
- The Authorised Dealer Manual has been updated accordingly
- Find the circular here.
- Exchange Control Circular No. 13/2024 | Royalties and fees
payable by South African resident entities to non-residents.
- This circular covers the amendments to section B.3(C), which deals with royalties and fees payable by South African resident entities to non-residents.
- With regard to transactions involving related parties, Authorised Dealers must receive confirmation from senior management of the applicant company that transfer pricing documentation is maintained as prescribed by SARS.
- With regard to ad-hoc services rendered between related parties, Authorised Dealers must receive written confirmation from senior management of the applicant company that the transaction was concluded at fair and market-related prices.
- Attention is also drawn to the transfer pricing record-keeping requirements in Public Notice 1334 of 28 October 2016.
- Authorised Dealers are required to report all transactions under the above dispensation as "related party payment" and to submit a quarterly report of all related party considered during that period to the SARB.
- Find the circular 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.
- Policy Update and New Guide | 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") Blog | Five need-toknows on income-based tax
incentives ("IBTIs") for research and development
("R & D") and innovation.
- Find the blog here
- OECD Peer Review | Automatic Exchange of Financial Account
Information 2024 Update
- The Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) is a multilateral framework for tax transparency and information sharing, within which over 170 jurisdictions participate on an equal footing. The Global Forum monitors and peer reviews the implementation of the international standards of Exchange of Information on Request ("EOIR") and AEOI.
- To ensure it is fully effective, the Global Forum carries out a review of each jurisdiction's domestic and international legal frameworks to ensure they are complete, as well as a review of the effectiveness of their implementation of the standard in practice. The report presents the latest conclusions of the peer reviews of the legal frameworks put in place by jurisdictions.
- Access the peer review report 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.
