South Africa: Tax Authorities

This issue of ENS' tax in brief provides a comprehensive snapshot of recent tax developments in South Africa, covering significant Supreme Court and High Court judgments on taxpayer representation and customs seizures, legislative amendments to customs rules and fuel levies, SARS publications on compliance requirements, and updates on exchange control regulations including crypto asset treatment.

The African Tax Administration Forum and OECD have concluded transfer pricing workshops for Francophone tax officials, while multiple African nations implement significant tax reforms including VAT changes, e-invoicing requirements, and new compliance measures. From Kenya's reduced petroleum VAT rates to Liberia's comprehensive tax amendments and Uganda's proposed alternative minimum tax, these developments reflect a continent-wide effort to modernize tax administration and enhance revenue collection.

Special Economic Zones in South Africa face a critical VAT discrepancy that can cost operators up to 15% of government grant funding. The inconsistent treatment between designated entities under Section 8(5) and other vendors under Section 8(5A) creates a two-tier system that directly impacts infrastructure delivery and investment readiness across the SEZ programme.

It is becoming increasingly unlikely that SARS will meet the collection targets required to achieve the additional R35 billion reflected in National Treasury's monthly publications.

The Tax Court has refused SARS's application to amend its rule 31 statement in the ETI test case that will determine the outcome of ETI disputes faced by over 400 employers. The judgment raises questions about who bears the cost when SARS causes delays.

In terms of South African tax law, retirement benefits received by South African tax residents from foreign retirement funds may be fully exempt from tax in certain circumstances.

Section 45 of the Income Tax Act 58 of 1962 (the "ITA") provides a valuable tax deferral mechanism for corporate groups wishing to reorganise their internal structures without incurring immediate tax consequences.

This article forms part of a series of articles exploring the corporate reorganisation rules under the South African Income Tax Act 58 of 1962 (the "ITA"). Each entry in this series will discuss...

Section 46 of the Income Tax Act 58 of 1962 (the "ITA") provides roll-over relief where a company distributes shares it holds in another company to its own shareholders...