3 Rose Street, Wellington, 7646
+27 (0)21 864 5180
admin@fhbc.co.za
Visit FHBC in Namibia
FHBC FHBC
  • Home
  • About us
    • MISSION AND CORE VALUES
    • BACKGROUND
    • COMMUNITY
  • Meet the team
    • Directors
    • Management
    • Personnel
  • Services
    • Accounting
    • ADMINISTRATION AND SECRETARIAL SERVICES
    • CORPORATE STRUCTURES AND STRATEGY
    • ESTATES AND TRUSTS
    • HUMAN RESOURCE MANAGEMENT
    • PAYROLL PROCESSING AND ADMINISTRATION
    • TAX COMPLIANCE AND ADMINISTRATION
    • LEGAL SERVICES
  • Careers
    • Current Vacancies
    • Submit Application
  • News
    • Latest News
    • Important Dates
    • NEWSLETTER SUBSCRIPTION
  • Contact us
PRESIDENT CYRIL RAMAPHOSA HAS SIGNED NEW TAX AND FINANCE RULES INTO LAW – HERE ARE THE CHANGES YOU SHOULD KNOW ABOUT

PRESIDENT CYRIL RAMAPHOSA HAS SIGNED NEW TAX AND FINANCE RULES INTO LAW – HERE ARE THE CHANGES YOU SHOULD KNOW ABOUT

6March 2, 2021May 4, 2021
By FHBCIn Tax Compliance and Administration

On 15 January 2021, the president has signed new tax and finance-focused bills into law, including the Taxation Laws Amendment Act (TLAA), and the Tax Administration Laws Amendment Act (TALAA).  These Acts came into effect on 20 January 2021.

Jean du Toit, head of Tax Technical at Tax Consulting SA, stated that these changes must be taken note of by the everyday South African.

These are the following important changes.

  1. Withdrawal of retirement funds upon emigration
    From 1 March 2021, taxpayers will no longer be able to access their retirement benefits upon completion of the emigration process through the South African Reserve Bank, commonly referred to as financial emigration.After this date, taxpayer will only be able to access their retirement benefits if they can prove they have been non-resident for tax purposes for an uninterrupted period of three years.

    Importantly, taxpayers can still access their retirement benefits under the old dispensation if they filed their financial emigration application on or before 28 February 2021.  If you missed the deadline, your retirement benefits will be locked in for a period of at least three years.

  2. Anti-avoidance rules bolstered for trusts
    The anti-avoidance rules aimed at curbing tax-free transfers of wealth to trusts have been strengthened to prevent persisting loopholes.The amendment is directed at structures where individuals subscribe for preference shares with no, or a low rate of return in a company owned by a trust connected to the individual.

    Ongoing changes to these rules again bring into question the thinking that trust structures are tax efficient.

  3. Reimbursing employees for business travel expenses
    Employees are not subject to tax on an amount paid by their employer as an advance or reimbursement in respect of meals and incidental costs where the employee is obliged to spend a night away from home for business purposes – provided it does not exceed the amount published in the Government Gazette.The TLAA includes an amendment which extends the treatment to expenses incurred on meals and other incidental costs while the employee is away on a day trip.

    Du Toit said that this will only apply if the employer’s policies expressly make provision for and allow such reimbursement.

  4. Relief for expats confirmed
    Due to the travel restrictions under the Covid-19 pandemic, the days requirement for the foreign employment exemption has been reduced from 183 days in aggregate to 117 days.The relaxation only applies to the aggregate number of days and the requirement that more than 60 of the days spent outside South Africa must have been consecutive remains applicable.

    This amendment is not a permanent fixture and will only apply to any 12-month period for the years of assessment ending from 29 February 2020 to 28 February 2021.

  5. Employer-provided bursaries
    The Income Tax Act makes provision for the exemption of bona fide bursaries or scholarships granted by employers to employees or their relatives.Historically, employees used this exemption as a mechanism to structure their remuneration package to reduce their tax liability.

    The exemption will no longer apply where the employee’s remuneration package is subject to an element of salary sacrifice; that is where any portion of their remuneration is reduced or forfeited because of the grant of such a bursary or scholarship.

  6. Tax treatment of doubtful debts
    The doubtful debt allowance provision has been amended to bring parity between taxpayers that apply IFRS 9 and those who do not.Where the taxpayer does not apply IFRS 9, the amount of the allowance is calculated after considering any security that is available in respect of that debt.
  7. Roll-over amounts claimable under the ETI
    The Employment Tax Incentive Act has been amended to encourage tax compliance.The amendment determines that excess ETI claims of employers that are non-compliant from a tax perspective will no longer be rolled over to the end of the PAYE reconciliation period.
  8. Estimated assessments
    The terms under which SARS may issue an assessment based on an estimate has been expanded.  SARS may now issue an estimated assessment where the taxpayer fails to respond to a request from SARS for relevant material.The amendment also bars the taxpayer from lodging an objection against the estimated assessment until the taxpayer responds to the request for material.
  9. SARS can withhold your refund if you are under criminal investigation
    In terms of the Tax Administration Act, SARS is entitled to withhold refunds owed to taxpayers in certain circumstances.The TALAA expands these provisions to determine that if you are subject to a criminal investigation in terms of the Tax Administration Act, SARS is entitled to withhold any refund it owes you, pending the outcome of the investigation.
  10. Criminal sanctions for minor tax offences
    Previously, a taxpayer would only be guilty of a criminal offence for non-compliance under the Tax Administration Act if they “wilfully” failed to comply with their tax obligations.With the new amendments, non-compliance will constitute a criminal offence where it is because of the taxpayer’s negligence.

    “In other words, intent is no longer required; where you are non-compliant because of ignorance of your obligations, you may be found guilty of a criminal offence.  These offences are subject to a fine or imprisonment of up to two years,” Du Toit said.

At least it is not all bad news, the most important change that applies to all taxpayers is the one that criminalises negligent non-compliance.

This and other administrative changes mean the taxpayers will be held to a higher standard, which serves as a cue for everyone to take ownership of their tax affairs.

If you have any enquiries, please contact Adri Britz at abritz@fhbc.co.za

Source Reference:

Ramaphosa has signed new tax and finance rules into law – here are the changes you should know about

https://www.news24.com/citypress/voices/2020-tax-proposals-signed-into-law-10-key-changes-20210126

DIE AANSTELLING VAN ‘N ONAFHANKLIKE TRUSTEE IN ‘N TRUSTDIE WAARDE VAN U BOEDEL EN BOEDELBELASTING

Categories:

  • Accounting Services
    (16)
  • Administration and Secretarial Services
    (18)
  • All Categories
    (62)
  • Associate Services
    (6)
  • Commencement and Structuring of Businesses
    (8)
  • Estates and Trusts
    (110)
  • Human Resource Management
    (28)
  • Legal
    (32)
  • Office and Personnel
    (118)
  • Payroll Processing and Administration
    (6)
  • Tax Compliance and Administration
    (97)

FHBC Wellington

  • 3 Rose Street
  • Wellington
  • View Map >>

FHBC SOMERSET-WEST

  • Unit 101 Crossfire Place, 15 Gardner Williams Avenue, Paardevlei
  • Somerset West
  • View Map >>

FHBC Payroll Services

  • 21 Jan van Riebeeck Street
  • Wellington
  • View Map >>

FHBC TRUST ADMIN SERVICES (PTY) LTD

  • 3 Rose Street
  • Wellington
  • View Map >>

Connect with us

  • + 27 (0)21 864 5180
  • admin@fhbc.co.za
  • Newsletter Subscription

Office Hours

  • Monday - Thursday: 08:00 - 16:45
  • Fridays: 08:00 - 15:30
  • Saturday - Sunday: Closed
FHBC FHBC
  • Home
  • About us
    • MISSION AND CORE VALUES
    • BACKGROUND
    • COMMUNITY
  • Meet the team
    • Directors
    • Management
    • Personnel
  • Services
    • Accounting
    • ADMINISTRATION AND SECRETARIAL SERVICES
    • CORPORATE STRUCTURES AND STRATEGY
    • ESTATES AND TRUSTS
    • HUMAN RESOURCE MANAGEMENT
    • PAYROLL PROCESSING AND ADMINISTRATION
    • TAX COMPLIANCE AND ADMINISTRATION
    • LEGAL SERVICES
  • Careers
    • Current Vacancies
    • Submit Application
  • News
    • Latest News
    • Important Dates
    • NEWSLETTER SUBSCRIPTION
  • Contact us
FHBC © 2016 | All Rights Reserved | Legal Notices | T&C of Services