The draft Tax Administration Laws Amendment Bill (DTALAB) proposes to amend the reportable arrangement provisions currently enacted in sections 34 to 39 of the Tax Administration Act (TAA). The proposed amendment clarifies the definition of tax benefit and widens the reporting obligation to fall on any participant of a Reportable Arrangement (RA), including a promoter. In terms of the proposed change the RA must be reported within 45 business days from the date on which the arrangement qualifies as a RA. Notably the participant definition will include natural persons.
In addition, the Draft Notice, released earlier this year, indicates that arrangements where a 'tax benefit' is not one of the main benefits may no longer be excluded from reportable arrangements.
To the extent that a new RA Notice is gazetted, any arrangement falling within the ambit of the Notice will need to be reported within 45 days from the date of such gazette.
Fines for failure to report may be imposed to a maximum of ZAR300,000 per month for each non-reporting participant or promoter of the arrangement.
If passed, these amendments will have retrospective effect from 16 July 2014.
For an in-depth analysis of the current reportable arrangement regime, we refer to an article by Dan Foster to be published in the October edition of Accountancy SA, circulated by the South African Institute for Chartered Accountants.