Below, please find issue 37 of ENSafrica's tax in brief, a snapshot of the latest tax developments in South Africa.

case law

  • no new case law noted

legislation and draft legislation

  • no new legislation/draft legislation noted

advance tax rulings

  • binding private ruling 330 | distributions of dividends and other amounts from a trust to beneficiaries on termination of their employment.
    • section 1(1) definition of "gross income"; 8C; and 10(1)(k)(i) of the Income Tax Act, 1962 (the "Act").
    • paragraph 1 of the Fourth Schedule to the Act definition of "remuneration".
    • this ruling determines the tax consequences of the distributions of dividends and other amounts on the termination of employment of trust beneficiaries.
    • find a copy of the ruling here.

SARS publications

  • Guide on the Determination of Medical Tax Credits (issue 10)
    • this guide provides general guidelines regarding the medical scheme fees tax credit and additional medical expenses tax credit for income tax purposes.
    • find a copy of the guide here.
  • draft interpretation note 16 (issue 3) | exemption from income tax: foreign employment income
    • section 10(1)(o)(ii) of the Income Tax Act, 1962 (the "Act").
    • this note discusses the interpretation and application of the foreign employment remuneration exemption in section 10(1)(o)(ii).
    • due dates for comments: 1 November 2019
    • find a copy of the draft interpretation note here.
  • Frequently Asked Questions: Foreign Employment Income Exemption
    • an amendment to section 10(1)(o)(ii) of the Act has been promulgated and will come into effect on 1 March 2020. The Frequently Asked Questions in this document have been compiled on the basis of questions that employees, employers and the public at large have about the implications of the amendment.
    • find a copy of the FAQs here.
  • interpretation note 99 (issue 2) | unclaimed benefits
    • paragraph 4(1) of the Second Schedule to the Act.
    • this note explains the treatment of lump sum benefits classified as unclaimed benefits that accrued to members (both before and from 1 March 2009) for income tax purposes.
    • find a copy of this interpretation note here.

exchange control

  • no new exchange control circulars noted

customs and excise

  • Customs and Excise Act, 1964 | draft rule amendment notice
    • amendment to item 200.08 of the Schedules to the rules places where container depots may be established.
    • section 6(1)(hB) of the Customs & Excise Act, 1964 (the "CEA"), empowers the Commissioner to appoint places where licensed container depots may be established for the storage, detention, unpacking or examination of containers or the contents of containers, for the delivery to importers of the contents of containers after such contents have been duly entered or for the packing of containers for export. This amendment is intended to list Komatipoort in item 200.08 in terms of section 6(1)(hB) of the CEA as approved places where licensed container depots may be established.
    • due date for comments: 15 October 2019
    • find a copy of the notice here.
  • Customs and Excise Act, 1964 | draft rule amendment notice
    • amendment to rules under section 110 tobacco product counters.
    • new rules are proposed under section 110 of the CEA that oblige the licensee of a customs and excise manufacturing warehouse for the manufacture of tobacco products to determine the quantities of all tobacco products manufactured in the warehouse by means of a functional product counter on each tobacco manufacturing machine. The draft rules explain the physical requirements of the product counter system of which further details will be communicated by the Commissioner to the licensee in writing at least 30 days before the installation date. The licensee would need to further adhere to strict reporting requirements, but may request approval from the Commissioner for an alternative methodology if the prescribed product counter system cannot be used.
    • due date for comments: 4 November 2019
    • find a copy of the notice here.
  • Customs and Excise Act, 1964 | notice R.1289 in Government Gazette 42740
    • amendment to Part 1 of Schedule No. 2 by the deletion of various antidumping items under item 215.02 and insertion of new anti-dumping items under item 215.02 in order to amend the applicable tariff headings liable to anti-dumping duty for wire ropes and cables Minute 05/2019
    • find a copy of the notice here.
  • Customs and Excise Act, 1964 | notice R.1290 in Government Gazette 42740
    • amendment to the rules under section 38 Southern African Customs Union (SACU) Unique Consignment Reference (UCR) number.
    • find a copy of the notice here.
  • Customs and Excise Act, 1964 | draft rule amendment notice
    • insertion of draft rules in terms of section 58A anti forestalling rules
    • new rules are proposed under section 110 of the CEA, that oblige the licensee of a customs and excise manufacturing warehouse for the manufacture of tobacco products to determine the quantities of all tobacco products manufactured in the warehouse by means of a functional product counter on each tobacco manufacturing machine. The draft rules explain the physical requirements of the product counter system of which further details will be communicated by the Commissioner to the licensee in writing at least 30 days before the installation date. The licensee would need to further adhere to strict reporting requirements, but may request approval from the Commissioner for an alternative methodology if the prescribed product counter system cannot be used.
    • due date for comments: 4 November 2019
    • find a copy of the draft notice here.

international

  • OECD | Denmark deposits its instrument of approval for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ("MLI").
    • find a list of all signatories and parties to the MLI here.
  • OECD | Montenegro joins international efforts against tax evasion and avoidance
    • Montenegro signs the multilateral Convention on Mutual Administrative Assistance in Tax Matters ("Convention").
    • find the media release here and a copy of the Convention here.
  • OECD | OECD leading multilateral efforts to address tax challenges from digitalisation of the economy
    • the OECD Secretariat publishes a proposal to advance international negotiations to ensure large and highly profitable Multinational Enterprises, including digital companies, pay tax wherever they have significant consumer-facing activities and generate their profits. The proposal is for a "Unified Approach" under Pillar I of the Inclusive Framework on BEPS' Programme of Work adopted on 28 29 May 2019.
    • find the media release here and the proposal here.