|
|
Announcements
EMP501 BI –ANNUAL RECONCILIATIONS for AUGUST 2010
SARS have announced that the filing season for the submission of the new bi-annual PAYE reconciliation will open on the 1 September 2010 with the final deadline being the 31 October 2010.
The following should be noted:
The IRP5 and IT3 certificates issued for the period March – August 2010 will be submitted to SARS only. These certificates are not to be issued to employees.
Certain mandatory fields that were relaxed somewhat on the Feb 2010 submissions will now be re-instated and you will not be able to complete and submit your reconciliation with out accurate and complete information on each employee. These mandatory fields are:
- Full names of employee
- Identity Number or passport number
- Physical residential address
- Dates of employment in the current financial year
- Complete breakdown of salary/wages received for the year
- Income tax reference – please refer to below for further information on this.
- Bank account details. If the employee does not have a bank account in their name they may use a joint or third party account, but this must be specified as such.
If an employer fails to disclose the above information as part of its PAYE reconciliation process, SARS will reject the PAYE reconciliation. SARS may impose a potential penalty on the employer, equal to 10% of the total amount of employees tax deducted from the remuneration of employees during the tax year for non-submission of the reconciliation form
SARS have advised that if a certificate for this first bi –annual reconciliation only, is issued without an employee’s tax reference number, they will verify the details on the IRP5/IT3 certificate to check if the individual is a registered taxpayer and automatically register individuals that are not on register. They will notify both the employee and the employer of the tax reference number accordingly.
Please note that this is a ONCE off bulk registration and any employees employed on or after the 1 September 2010 will have to supply the employer with their tax reference number or an ITREG application will need to be completed for each individual to facilitate tax registration.
Please refer to the SARS website www.sars.gov.za for the complete public release on this matter.
Should you require our office to attend to this bi-annual recon on your behalf, please ensure that the information is delivered to our office and clearly marked for the attention of Kim Engelbrecht, no later than the 10th September 2010. Please ensure that the information is complete and in the format required as SARS have indicated that they will impose stiff penalties and interest for late or incomplete reconciliations
Kind Regards
Royden Whitfield
FINTAX PE TRUST
6/08/2010
| 6 August, 2010 | NEW DISCLOSURE REQUIREMENTS FOR PAYE RECONCILIATIONS
With effect from the 2011 tax year, all employers will be required to submit bi-annual PAYE reconciliations, with new disclosure requirements. The first reconciliation is expected to be due in August 2010 and the second will be due at the end of May 2011.
The new IRP5/IT3(a) disclosure requirements will place a significant compliance and administrative burden on employers.
It will be compulsory for all employers to disclose the following information on its employees IRP5/IT3(a) certificates:
• the employees income tax reference number (regardless of whether the employees income earned for the tax year falls above or below the tax threshold and regardless of whether the employee is in standard or non-standard employment);
• the employees banking details where the employee is paid directly via a bank transfer;
• the employees residential address;
• the employees identity number.
If an employer fails to disclose the above information as part of its PAYE reconciliation process, SARS will reject the PAYE reconciliation. SARS may impose a potential penalty on the employer, equal to 10% of the total amount of employees tax deducted from the remuneration of employees during the tax year for non-submission of the reconciliation form.
The requirement to provide SARS with all the employees income tax reference numbers is one of the immediate issues that employers need to deal with as they may not have this information readily available at present. This will be particularly so where the employer employs casual labour, part-time staff or contractors on a regular basis.
Where employees are not registered for income tax purposes and hence do not have a tax reference number, SARS plans to have introduced an online registration process to enable employers to register such employees.
Employers should already have started a process of collating the required information as this will prove to be an onerous and lengthy task and failure to comply will result in the abovementioned penalty.
| 29 June, 2010 | Media statement released by Cipro on 25 May 2010
Media Statement
Companies and Intellectual Property Registration Office (CIPRO) CIPRO
Reaching out to the business community
Pretoria, Tuesday, 25 May 2010 CIPRO Acting Chief Executive Officer, Lungile Dukwana today said that CIPRO wants to assist the business community to submit annual returns for their companies and close corporations.
“CIPRO appreciates the impact deregistration of companies and close corporations will have on the economy of South Africa, and therefore has decided to give further extension to business entities in submitting annual returns until 15 July 2010. Deregistration processes will commence immediately thereafter”, said Dukwana.
Annual returns are not a new requirement for CIPRO, for public companies and external companies they were implemented in August 2003, whilst in September 2008 they were implemented for private companies and close corporations. Provision for submitting annual returns was made in terms of Section 173 of the Companies Act, Act 61 of 1973 as amended and Section 15A of the Close Corporations Act, Act 69 of 1984 as amended, as well as Section 16A of the Close Corporations Administrative Regulations.
Annual returns are therefore a statutory duty that is contained within the above Acts. The purpose of annual returns is also to confirm that the business entity’s information is up to date with CIPRO; and that the entity is still doing business. Annual returns are used in most countries across the globe to update information kept by an Office of the Registrar.
Annual returns must be lodged electronically on the CIPRO website within the anniversary month of the business entity’s incorporation. Penalty fees will be incurred within a month of non-compliance. Information about any possible outstanding annual return fees can be viewed on the CIPRO website. It is important that payment has to be made to CIPRO before the annual return lodgement process can be completed.
In addition to the extension of submitting annual returns, CIPRO is furthermore embarking on a roadshow during June and July 2010 to assist customers in submitting annual returns. All provinces will be visited and towns to be visited will be broadcasted on community radio stations and put on CIPRO website throughout June and July 2010.
Dukwana emphasised, “CIPRO will continue improving its services to our customers and businesses in South Africa as we realise the importance of the role CIPRO is playing in contributing to the economy of our country”.
Customers who require further information should visit the CIPRO website, www.cipro.gov.za or could email tshingange@cipro.gov.za, bmodise@cipro.gov.za or jmphahlele@cipro.gov.za
Issued by : CIPRO Contact : Dr Elsabé Conradie Telephone : (012) 394 5467
Email : econradie@cipro.gov.za
| 31 May, 2010 | UNEMPLOYMENT INSURANCE FUND (UIF)
Those clients who attend to their own payroll must please note that members, directors or trustees have to pay UIF on their salaries. This is limited to the amount of R124.78 per month.
Herewith a breakdown reminder below on all monthly requirements:
VAT (Valued Added Tax)- Should the income of the business exceed R1 million per annum, it is compulsory to register for VAT; below this threshold you may apply voluntarily, but SARS has the right to object to such registration.
PAYE (Pay as you earn) – Should you employ a staff member and s/he earns a salary in excess of R4750.00 p/m, registration for PAYE is compulsory. If you are a member of a CC or director of a Company, PAYE registration may be compulsory.
SDL (Skills Development Levy) - Should you employ staff and the total salaries per annum exceed R500 000.00, registration for SDL is compulsory.
UIF (Unemployment Insurance Fund) - Should the CC employs staff for more than 8 hours in a calendar week, registration for UIF is compulsory. UIF is limited to the amount R124.79 per month.
Workmen’s Compensation - Should you employ staff, registration for Workmen’s Compensation is compulsory and non-registration could lead to a fine being imposed by the labour department and employers being liable for all medical costs for staff injured on duty (IOD).
Should you need any assistance with regards to any of the above, please email charmaine@fintaxpetrust.co.za. She will also be able to assist in registering your business for Workmen’s Compensation and any other compulsory registration that applies to you such as INCOME TAX, VAT, PAYE, UIF or SDL.
Kind regards
FINTAX PE TRUST / Ref: cl
31 May 2010
| 31 May, 2010 | WORKMENS COMPENSATION
We wish to remind all business’ who employ staff that it is a legal requirement to be registered for Workmen’s Compensation with the labour department. Failure to register for workmen’s compensation may lead to substantial fines and employers being liable for all medical costs for staff injured on duty (IOD)
Kind regards
FINTAX PE TRUST / Ref: cl
31 May 2010
| 31 May, 2010 | EMP501 RECONCILIATIONS AND IRP 5 CERTIFICATES FOR 2010
The 28th February brought the 2010 tax year to a close and with it came the usual deadlines from Sars for the submission of the EMP501 (PAYE) reconciliation and IRP5/IT3 certificates.
The upgrade for the easy-file program will be available from the 1April 2010 and it will be full steam ahead to get these reconciliations completed and submitted to SARS on time.
There has been much media hype surrounding the changes to the reconciliation process itself and the mandatory fields on the certificates. Overall the completion of the reconciliation and certificates requires a significant amount of additional information and time.
If you require our office to attend to these on your behalf, we request that you ensure the information reach us no later than the 31 March 2010. It is crucial that the information supplied is accurate, complete and is presented in an orderly manner.
Please do not include the information with your 2010 tax information as this is handled by a different department and we will assume that you do not require our assistance in completing the EMP501 reconciliation and relevant certificates.
We require direct instruction to do this and all information delivered must be clearly marked as follows: PAYE RECONS 2010
KIND REGARDS
FINTAX PE TRUST
| 11 March, 2010 | URGENT REMINDER: WORKMEN’S COMPENSATION RETURN DUE 31 MARCH 2010
The Workmen’s Compensation return of earnings for the period March 2009 to February 2010 is due to be submitted for your business by no later than the 31st March 2010. Failure to do so by the due date will result in penalties and interest being raised.
The Department of Labour has failed to mail the original returns out to employers on time and you will need to download this from their website (www.labour.gov.za). We note that the Department of labour has amended the forms somewhat and what used to be a two page form for completion has now become a four page detailed reconciliation of estimate salary figures submitted for this year as well as actual salaries paid out and estimates for next year.
Furthermore in addition to the usual list of company directors/members, their identity numbers and physical residential addresses, they now also require a detailed list of all existing and past employees for the financial year and their identity numbers.
As this is going to entail a significant amount of additional time and effort, we strongly advise you attend to this immediately.
Please remember that this form must reach the labour department no later then the 31st March 2010 to avoid additional costs.
| 11 March, 2010 | Silly Season Finally Over
Finally the end of the tax year has arrived with most deadlines for 2009 submissions met and provisional returns submitted , what a mad rush February has become with everything happening at the same time!!.
Thanks to all our fantastic clients who followed our requests and got your information to us early and on time. This really does help make us meet these increasingly more difficult deadlines set by SARS. For the few clients who didn’t PLEASE try this year!!
I list below (again) my normal reminders for 2010.
Please take note of the following:
- Record the closing KM reading on SUNDAY (the 28th) for all PRIVATE cars that are used for business travel.
- See that you have an accurate logbook for each PRIVATE car used for business (e.g. under publications on our website www.fintaxpetrust.co.za).
- Those clients that have their own business that have TRADING stock on hand must do a stock take of all trading stock on the 28 February 2010 (as per normal)
- If you plan to make use of the donations tax exemption - a cash transfer of UP TO R100 000 must be made to your Trust by the end of the month (28 Feb 2010). Remember both spouses may donate up to R100 000 each to their Trusts.
For those few clients that have still not yet handed in their 2009 (1/3/2008 to 28/2/2009 i.e. last year) accounting and/or tax information to us, OR WHO OWE US OUTSTANDING INFORMATION, we suggest you do so ASAP as SARS will start issuing LARGE MONTHLY PENALTIES FROM MARCH.
Don’t forget that this is a general email sent via our website to all our clients so please do not click on reply to sender as it will not reach us.
Many Thanks
FINTAX PE TRUST
Rbw26/02/2010
| 26 February, 2010 | 2010 Budget Brief
Individuals
The tax threshold has been increased for individuals younger than 65 and will be R57 000 and for individuals 65 or older will be R88 528.
Increased exemption for interest and dividend income
• The annual exemption on interest earned for individuals younger than 65 years is raised from R21 000 to R22 300.
• The exemption for individuals 65 years and older increases from R30 000 to R32 000.
• The threshold for the tax-free portion of interest and dividends from foreign investment increases from R3 500 to R3 700.
Medical Expenses
From 1 March 2010 the tax deductible portion of monthly contributions to medical schemes is increased for each of the first two beneficiaries from R625 to R670 and for each additional beneficiary from R380 to R410.
Retrenchment Packages
The R30 000 exemption for termination of services has not been adjusted in many years. It is proposed that this exemption be merged into the retirement fund lump sum benefit system and that the qualifying lump sums be taxed by applying the tax table for retirement fund lump sum benefits. The aggregation principle will apply.
SITE is to be abolished from 1 March 2011.
The company car fringe benefit value is to be increased
Deferred compensation and employer-provided group life insurance will be taxed as fringe benefits
Company Tax
No change is proposed to corporate tax rates
Voluntary Disclosure Programme
It appears as if yet another amnesty type opportunity may be on its way in the following form:
In order for taxpayers to disclose their defaults (non-compliance) and regularise their tax affairs a voluntary disclosure programme will be implemented.
• The programme is to be effective during a window period from 1 November 2010 until
31 October 2011
• The full amount of tax remains due
• Relief with regard to interest and penalties will apply
• Relief is to be granted if–
- The disclosure is complete
- SARS was not aware of the default
- A penalty or additional tax would have been imposed had SARS discovered the default in the normal course of business
Other Very Interesting and Far Reaching Proposals
1. Interest Income
Annual tax-free interest income will be increased from R21 000 to R22 300 for individuals below 65 years, from R30 000 to R32 000 for individuals 65 years and over, and from R3 500 to R3 700 for foreign-interest income. These exemptions will be limited to savings through widely available interest-bearing instruments, such as bank deposits, government retail bonds and collective investment money market funds. The new limits will exclude tax planning aimed at shifting taxable income. Therefore it appears as if the exemption will no longer apply on interest earned from loan accounts!
In addition it appears as if SARS intends restricting the interest exemption for non-residents investing in financial instruments other than South African bonds, unit trusts or publicly available interest bearing instruments. Therefore it appears as if the exemption enjoyed by non resident individuals on interest earned in South Africa will no longer apply on interest earned from loan accounts as well!
2. Estate Duty
Estate duty and capital gains tax are both payable upon death. This is perceived as giving rise to double taxation. According to SARS estate duty raises very little revenue and is cumbersome to administer. Moreover, its efficacy is questionable as many wealthy individuals escape estate duty through the use of trusts and other means. Accordingly SARS will be reviewing taxes upon death.
3. Compliance
According to SARS the general level of tax compliance appears to have deteriorated during the recession. As a result, SARS is refocusing its enforcement and audit capacity, and modernising its systems.
The key areas for improved tax administration over the next three years are:
• Increased digitisation to enable self-service and voluntary compliance
• Further modernisation of personal income tax, pay-as-you-earn, corporate income tax and VAT systems
• Modernisation of customs systems
• Improved call centres, office operations and payment processes
• Increased system infrastructure to process administrative penalties
• Enhanced focus on large taxpayers and high net worth individuals.
Improved data analysis helps SARS to identify high-risk taxpayers for increased enforcement. This process will be enhanced by the improved collection of third-party data that allows for specific case identification.
General Proposals
It is proposed that ownership in liquidating/deregistering companies no longer be grounds for preventing micro and small business relief.
Last year, government announced a three-year window allowing residential property entities to liquidate without triggering additional tax. On further review, it has been determined that this window is insufficient. A new, more flexible window period is proposed so that these residential property entities can to be liquidated or dissolved with limited compliance and enforcement effort.
Consideration may also be given to adjusting the exemption to ensure that taxpayers with little or no provisional tax to pay, but who are currently considered to be provisional taxpayers (such as dormant companies), are exempted.
Several regulatory and enforcement agencies operate under the umbrella of the Minister of Finance. Each of these agencies is subject to secrecy provisions that limit their ability to disclose information to one another, hampering enforcement. It is proposed that the secrecy provisions of the various agencies be revised to allow for some exchange of information within a legislative framework.
Click on www.sars.gov.za/home.asp?pid=55410 to visit SARS website for more details.
FINTAX PE TRUST
RBW 20/02/2010
.
| 20 February, 2010 | Cipro reminder – IMPORTANT NOTICE
We noticed that many clients have paid their Cipro fees, but failed to lodge the return. Note that you MUST PHYSICALLY SUBMIT the return. By purely making a payment to Cipro will not make the problem disappear.
Login with your Cipro details, go to annual returns on the home page, follow the links and submit the returns accordingly. Note that this must be submitted every year in the CC/Pty/Inc’s birth month
Failure to submit the return timeously, will result in Cipro assuming that the company does not trade and accordingly deregister it (terminate the company, which has a major impact on you if your company is in fact trading). Note that if you have a dormant company, and wish to keep it, i.e. for a future use, you must submit its Cipro return to avoid it from being removed from Cipro’s register.
For those clients who have not as yet attended to their Cipro returns, please follow the following process:
1. Visit www.cipro.co.za
2. Register as a customer
3. Only once registered, do you make a payment to them (your login name is your payment reference)
4. Once paid, go to the home page, annual returns, follow the links and submit your return
5. Diarize to submit every year in your CC/Pty/Inc’s birth month
Those of you who have already contacted and given an instruction to Charmaine at our office to submit the return on your behalf need not worry to register on the Cipro site, as she will register and submit your return on your behalf. However, those of you that have not made arrangements with our office, must please attend to the submissions timeously in order to avoid termination. If you are unsure as to whether you have given Charmaine instruction, please don’t assume we are doing it. Please call her to confirm.
If you would like more information on the above, please contact Cipro via telephone 0861843384 or email contactus@cipro.co.za or contact Charmaine at our office on charmaine@fintaxpetrust.co.za.
Legal Department
CL 17/02/2010
| 17 February, 2010 | 2010 Tax Year coming to an end
Please take note of the following:
- Record the closing KM reading on the 28th for all cars that are used for business travel.
- You have an accurate logbook for each car used for business (e.g. under publications on our website www.fintaxpetrust.co.za).
- Those clients that have their own business that have TRADING stock on hand must do a stock take of all trading stock on the 28 February 2010 (as per normal)
- If you plan to make use of the donations tax exemption - a cash transfer of UP TO R100 000 must be made to your Trust by the end of the month (28 Fen 2010). Remember both spouses may donate up to R100 000 each to their Trusts.
For those few clients that have still not yet handed in their 2009 (1/3/2008 to 28/2/2009 i.e. last year) accounting and/or tax information to us, OR WHO OWE US OUTSTANDING INFORMATION, we suggest you do so ASAP as SARS will start issuing LARGE MONTHLY PENALTIES FROM MARCH.
Don’t forget that this is a general email sent via our website to all our clients so please do not click on reply to sender as it will not reach us.
Many Thanks
FINTAX PE TRUST
Rbw6/02/2010
| 6 February, 2010 | REMINDER ABOUT CIPRO - PLEASE READ
PLEASE READ the following as it will effect you if you have a Close Corporation, Pty, Ltd or Incorporated company.
We wish remind you again to submit your Cipro annual returns on the Cipro website. Cipro is the Companies House in Pretoria where all companies are registered and kept on file. Failure to submit the return timeously, will result in Cipro assuming that the company does not trade and accordingly deregister it (terminate the company, which has a major impact on you if your company is in fact trading). Note that if you have a dormant company, and wish to keep it, i.e. for a future use, you must submit its Cipro return to avoid it from being removed from Cipro’s register.
The process to follow is to FIRSTLY register as a customer on the Cipro website www.cipro.co.za (to be able to use the website). SECONDLY to pay them the prescribed fees using your login name as your payment reference (very important. If the ref is not used, Cipro will be unable to allocate your funds). THIRDLY once payment has been made you MUST log onto the Cipro website and submit the returns by going to “annual returns” and following the links to submit the return. By merely paying them, is not sufficient. You must SUBMIT the returns online after payment has been made.
Cipro fees are as follows:
Close Corporations:
Turnover less than R50mil – R100
Turnover R50mil and more – R4000
Penalty for late submission – R150
Pty/Ltd/Inc’s:
Turnover less than R10mil – R450
Turnover R10mill but less than R50mil – R2500
Turnover R50mil and more – R4000
Penalty for late submission – R150
Note that the return is due every year in the company’s birth month, i.e. if established in the month of March; you must submit the return every year in that month. If you are unsure as to your company’s birth month, please contact us to assist you. Cipro DOES NOT send any reminders as to when the return is due, so please diarize to submit annually on the company’s birth month.
Those of you who have already contacted and given an instruction to Charmaine at our office to submit the return on your behalf need not worry to register on the Cipro site, as she will register and submit your return on your behalf. However, those of you that have not made arrangements with our office, must please attend to the submissions timeously in order to avoid termination. If you are unsure as to whether you have given Charmaine instruction, please don’t assume we are doing it. Please call her to confirm.
If you would like more information on the above, please contact Cipro via telephone 0861843384 or email contactus@cipro.co.za or contact Charmaine at our office on charmaine@fintaxpetrust.co.za.
Legal Department
CL 9/12/2009
| 9 December, 2009 | Cipro Annual Returns - NB NB NB
We refer to our previous emails and correspondence and again wish to REMIND you that CIPRO Annual Returns are payable for all Close Corporations & Companies. Cipro uses the annual returns to confirm whether a CC/Co is still active, as well as to update their records. Failure to pay and submit the Cipro return will result in your company being deregistered with Cipro (Companies house in Pretoria where your CC/Co was formed). The deregistration of a CC/Co results in the withdrawal of its juristic status and limited liability of directors; THE ASSETS THAT THE CC/CO MAY HAVE AT THE TIME OF DEREGISTRATION WILL BE FORFEITED TO THE STATE IN TERMS OF BONA VACANTIA.
Cipro has published a list of non-compliant companies and close corporations on their website www.cipro.co.za under News and Events/Information Library/CIPRO Publications. The list may be saved to your local machine and searched by using the “CTRL F” function.
Clients are advised to confirm the status of their companies or close corporations and if necessary, bring all outstanding annual returns up to date in order to avoid deregistration.
We suggest that you visit www.cipro.co.za in order to obtain the necessary information on how to submit your annual return on line or call them on 086 184 3384.
We are able to assist you and submit the returns on your behalf for a fee R171.00 for CC and R285.00 for a Company per submission (this fee excludes the Cipro fees which can be viewed on the Cipro website). You will however have to contact Charmaine at our office should you wish us to assist in this regard as we are unable to assume this responsibility without your instructions.
Charmaine’s email address is - charmaine@fintaxpetrust.co.za or call her on 041-3743201.
Please note that this is a general email to all our clients. Those who have been submitting Cipro returns may ignore this notice.
Legal Services
Fintax PE Trust
CL 26/11/2009
| 26 November, 2009 | Trust and Company owned residential property relief
The 2009 Taxation Laws Amendments allows individuals to transfer their domestic residence out of a company, close corporation OR TRUST, for a period of two years, tax-free.
The motivation for the proposal was to allow such entities to avoid the payment of annual duties. Trusts that own domestic residences have also now been included.
In order to qualify the property must have been owned by the company, close corporation or Trust since 11 February 2009 and must be –
- Used mainly as you or your spouses residential home.
- Used mainly for domestic purposes (this excludes buy to lets “investment properties” or holiday homes).
- Must not be more than 2 hectares in size.
In addition, for companies and close corporations, all of the shares or members interests in the entity have to be held by the person residing in the property, or that person’s spouse, during the period from 11 February 2009 until the date the residence is distributed out of the entity."
For Trusts, the person taking transfer must have donated the house to the Trust or financed its acquisition, improvements, maintenance and all bond payments.
The residence must also be distributed out of the entity and registered in the individuals name before 31st of December 2011.
The effect of the proposal is that the transfer will be free from Capital Gains Tax (CGT), Secondary Tax on Companies and Transfer Duty. The transferee will also be able to benefit from the R1, 5m "primary residence exclusion" from CGT if the residence is subsequently sold for a profit. The transfer will be treated as a roll-over, meaning that the transferee will step into the shoes of the transferring entity insofar as the history of the residence is concerned.
There are many other factors to be taken into account such as Estate Duty, Bond registration costs and whether you will qualify for a bond in your personal names, however we strongly encourage those taxpayers who do own their residential homes in a Trust, Company or Close Corporation to investigate the concession and suggest you contact the partner attending to you affairs for more input.
Remember this is a general email sent to all our clients do not click on “reply to sender” as we will not get it.
FINTAX PE TRUST
RBW-09/11/09
| 9 November, 2009 | OUTSTANDING TAX RETURNS – VERY NB
Most of you would have either read in the papers or seen on TV SARS current campaign regarding outstanding tax returns. The purpose of this email is to warn you that SARS are VERY SERIOUS about their new penalty system for outstanding returns.
Now before we receive hundreds of queries from all our good clients enquiring why we are sending this email to you, it’s a general email that has been sent to ALL OUR CLIENTS. It also refers mainly to the 2008 tax returns that are still outstanding, this is for last year ( 1 March 2007 to 28 February 2008) NOT THE CURRENT YEAR. Now, most (over 90%) of our client 2008 returns are in, there are still a few clients who have not handed in their 2008 information. Please bear in mind that this should have been delivered to our office before the end of MAY 2008.
SARS have indicated that if all outstanding returns (2008 and prior years) are in by the end of November 2009 they will not levy penalties AND you will get extension for this year (2009) until the end of February 2010 provided you are a provisional taxpayer.
The new penalty system is extremely SEVRE with the minimum penalty calculated at R250 per return PER MONTH that you are late. The R250 increases to R16 000 per return per month for LARGE earning taxpayers. Assuming that your 2008 returns are still outstanding and you don’t get them in on time for a group consisting of 5 returns (Mr, Mrs a CC and two trusts) the penalty for the 2008 and now 2009 return could run at R 1250 per month back dated to November last year for the 2008 returns. If you only get these in, in March next year your penalty for the group will amount to R 26250 and that’s calculated on the minimum penalty!!!!!.
So if you have still not sent in your 2008 (1 March 2007 to 28 February 2008) information it must come in before FRIDAY 6 November for us to have any chance of helping you get them in by the end of November.
Please do not panic once you have read this EMAIL, for the majority of clients we have not only completed your 2008 year but also the 2009 year and this DOES NOT APPLY TO YOU. You only need to react to this email of you HAVE NOT YET SUBMITTED YOUR 2008 (OR PRIOR YEARS) INFORMATION OR ARE AWARE THAT YOUR 2008 (OR PRIOR YEARS) TAX RETURNS HAVE NOT BEEN SUBMITTED.
Remember this does not apply to the current year 2009 (1 March 2008 to 28 February 2009), so if we have not completed this year as yet, no need to worry as you have extension to the end of February 2010 as your 2008 returns are in (provided you are a provisional taxpayer). However if you have still not sent in your 2009 information we strongly suggest you get that in ASAP.
Remember this is a general email sent to all our clients do not click on “reply to sender” as we will not get it.
Kind Regards
FINTAX PE TRUST
RBW 01/11/2009
| 2 November, 2009 | Company owned residential property relief
The Draft 2009 Taxation Laws Amendments contain a proposal that, if enacted, will allow individuals to transfer their domestic residence out of a company or close corporation, for a period of two years, tax-free.
The motivation for the proposal was to allow such entities to avoid the payment of annual duties. It appears that Trusts that own domestic residences will not benefit from any relief. All of the shares or members interests in the entity have to be held by the person residing in the property, or that persons spouse, during the period from 11 February 2009 until the date the residence is distributed out of the entity."
The residence has to be used exclusively for domestic purposes during the above period and has to be the sole asset of the company or close corporation. It must also be distributed out of the entity between the 1st of January 2010 and the 31st of December 2011, and finally, the entity has to be wound up after the above distribution."
The effect of the proposal is that the transfer will be free from Capital Gains Tax (CGT), Secondary Tax on Companies and Transfer Duty. The transferee will also be able to benefit from the R1,5m "primary residence exclusion" from CGT if the residence is subsequently sold for a profit. The transfer will be treated as a roll-over, meaning that the transferee will step into the shoes of the transferring entity insofar as the history of the residence is concerned.
Remember that this is just a proposal at this stage and should the proposal in fact become law, we strongly encourage those taxpayers who do own their residential homes in a company or Close Corporation to take advantage the concession. However it does appear that the conditions as currently set out could exclude most property companies as traditionally the shares would be owned by a Trust.
We will have to see what the final wording ends up at before decisions can be made.
FINTAX PE TRUST
RBW06/07/09
| 6 July, 2009 | NB NB NB - Motor Vehicle Log Books
With the tax season fast approaching we would like to again emphasize the importance of ensuring that if you receive a car allowance, or run your own business and use a car for business purposes, you supply us with a detailed and accurate log book of business kilometers travelled for the tax year. This would be required for every car used.
We have, on many occasions, given you details of what is required and remind you to visit our website www.fintaxpetrust.co.za click on ‘important announcements or publications’ and scroll down until you come to the example of a log book if you still need help. WE ALSO NOW REQUIRE THE MAKE OF THE CAR, THE MODEL AND MANUFACTURING YEAR FOR EACH CAR. This is a new requirement so please make sure your log book reflects this info.
SARS are now doing detailed audits on log books where they are not only requesting the log book itself, but proof of the ODO meter reading of the car during the period in question. Basically what they do is they either request from you, or directly from your service provider, a copy of an invoice during the year when the car was sent in for a service. As you know, whenever your car goes in for a service your ODO meter is recorded. They then compare this at the same date in your log book and if things do not balance they could firstly, disallow your entire claim, and secondly, possibly take criminal action for misrepresentation. Therefore, with no accurate and complete log book, there can be no claim.
Please ensure that you follow the correct procedure with regard to log books and understand that should you not bother, you can also lose out on an extensive deduction resulting in additional tax payable. Please note that this is not a requirement by us, but a requirement by SARS and while it is an annoyance, it is something that must be done and it must be done correctly.
FINTAX PE TRUST
| 6 July, 2009 | NEW INCOME TAX PENALTY LAWS
New laws came into effect on 1 January 2009, and apply to all areas of non-compliance occurring on or after 1 January 2009.
The laws allow SARS to impose penalties per month, based on the taxpayer’s previous year’s taxable income as follows:-
Taxable income for preceding year Penalty
(i) Assessed loss - R250
(ii) R0 – R250,000 - R250
(iii) R250,001 – R500,000 - R500
(iv) R500,001 – R1,000,000 - R1,000
(v) R1,000,001 – R5,000,000 - R2,000
(vi) R5,000,001 – R10,000,000 - R4,000
(vii) R10,000,001 – R50,000,000 - R8,000
(viii) Above R50,000,000 - R16,000
The penalty arises on the date of the non-compliance, if the non-compliance is not rectified within 30 days, the penalty is levied again every month. It is clear that SARS intend to penalize more severely taxpayers who do not inform SARS of address changes, i.e. current address details are not on record with SARS or if SARS is unable to deliver the penalty assessment:
SARS in possession of SARS not in possession Current address of current address
Maximum successive 36 48
monthly penalties
Areas of non-compliance and triggering the penalties listed above are as follows :
1. failure to register as required by the Income Tax Act (e.g. as a taxpayer, employer etc)
2. failure to notify SARS of a change in address
3. failure by a company to appoint a public officer, domicilium, etc.
4. failure to submit a return or other required documents/information
5. failure to make available required information, etc.
6. failure to reply to or answer a question when required
7. failure to attend and give evidence when required
8. failure by an employer to notify SARS of a change of address or the fact of
Having ceased to be and employer
9. failure by and employer to submit a monthly declaration of employees’ tax
10. failure by an employer to provide details of an employee
11. failure to deliver an employees’ tax certificate to one or more employees as and
when required by the ITA
12. delivery by an employer of an employees’ tax certificate without first rendering
An employee’s tax return
13. failure by a provisional taxpayer to submit an estimate of taxable income as and
when required under the Act
14. any other non-compliance with an obligation imposed under the ITA.
Note that these fixed-amount penalties are separate from the percentage-based penalties that might also apply in some cases (e.g. 10% for late payment of provisional tax/
Vat / Paye).
SARS are very serious about imposing these penalties and we strongly advise clients to understand their responsibilities regarding their tax affairs and ensure that your affairs with SARS are in order and up to date.
FINTAX PE TRUST
RBW
| 9 March, 2009 | EMPLOYEES TAX RECONCILIATIONS
As we enter the new filing season for the submission of EMP501 returns (annual paye reconciliation and employee tax certificates) we remind you that this can only be done electronically via Sars easy file system, utilising the free software made available by Sars. This can be submitted electronically or on a CD delivered to a SARS office.
This “new” system introduced by SARS last year must be taken EXTREMELY SERIOUSLY by business owners who employ staff and deduct EMPLOYEES TAX from their employees. Every business owner in this position must ensure they understand what their obligations are and will need to ensure that they complete and submit the required forms to SARS well before the deadline date of 30 May 2009 or face SEVERE PENALTIES (10% of the total employees tax deducted on all staff for the year).
This responsibility rests with you and even if we have assisted you to complete and reconcile your IRP5 returns in prior years we will NOT BE ABLE TO AUTOMATICALLY do so this year. You need to specifically request that we attend to this matter and you will need to contact Kim Engelbrecht (kim@fintaxpetrust.co.za) at our office should you require our office to attend to this on your behalf.
Due to the deadline imposed by SARS on the new system we have limited time in which to attend to all these submissions and request that should you require our assistance, you contact Kim at our office without delay.
We will require all information to be delivered on or before the 20 March 2009.
During last years submissions, we noted that information was not always supplied for employees and casual workers on whose salary only uif contributions were paid over or Skills development levy was paid. As the new system requires the reconciliation of all three taxes (Paye, Uif and Sdl) it is imperative that we are supplied with full details on all salary and casual workers.
Please ensure that the information delivered is complete to avoid unnecessary delays.
Please remember that this notice only applies to business that are registered for employees tax and deduct PAYE and SITE from the salaries and wages paid to their staff. If you are not registered for employees tax as a business owner and you do not deduct PAYE/SITE it has no impact on you.
Don’t forget that this is a general email sent via our website to all our clients so please do not click on reply to sender as it will not reach us.
Kind Regards
FINTAX PE TRUST
| 6 March, 2009 | 2009 BUDGET SUMMARY
Please click on
http://www.thebudget.co.za/?20
for all the details on the recent budget.
Kind Regards
Royden Whitfield
FINTAX PE TRUST
| 17 February, 2009 | VAT DEREGISTRATION – PROBLEMS BE CAREFULL
VAT DEREGISTRATION – PROBLEMS BE CAREFULL
by Royden Whitfield
Registered for VAT and thinking of deregistering as a result of the turnover threshold increase in March to R1 million, or have you received a letter from SARS advising you that you have been suspended as a VAT vendor because your income is below R20 000.
Please take note of the following :
The COMPULSORY VAT registration threshold is increasing from R300 000 to
R1 million in March 2009.
The increase in the compulsory VAT registration will simplify tax compliance for small enterprises. Taxpayers with turnover levels below the new registration threshold have been given two options:
(a) retain as is (do nothing) ; or
(b) deregister as VAT vendors.
As far as deregistration is concerned, taxpayers have been given two further options :
i) register as a small business and in future be taxed in terms of a new small business tax regime (which will automatically include deregistration as a VAT vendor); or
ii) deregister as a VAT vendor on the basis of your turnover being below the new registration threshold.
Whatever option is taken, please take note of the consequences of deregistration and ensure that an informed decision is made.
Problems
When a business deregisters for VAT, it is deemed to dispose of all assets held and certain rights attaching to the business immediately before deregistration and: -
a) VAT is payable to SARS on the lower of the cost or the open market value of such assets and rights. This results in VAT being payable to SARS without any commercial sale having been concluded. For example, if your business has a property that cost you R1 million, you will then have to pay VAT back of R140 000 on deregistration.
b) VAT also has to be accounted for on the amount of any outstanding trade creditors as at the date of deregistration.
Relief Provided
a) SARS has provided some relief for businesses that choose to deregister as VAT vendors due to the increased registration threshold. Businesses will be entitled to settle any VAT liability resulting from deregistration (excluding any liability resulting from unsettled creditors at the date of deregistration) over a period of 6 months. SARS has been given a discretion to extend the period beyond six months should the situation warrant it.
b) In addition, no interest will be payable on the outstanding amount during this period. For businesses not registering in terms of the small business tax regime, this relief is however only available if you deregister on or before 30 June 2009.
c ) For businesses that opt to be taxed in terms of the small business tax regime, they will also be entitled to reduce the amount on which VAT must be paid on deregistration (excluding VAT on outstanding creditors) by R100 000. This additional relief results in a VAT saving of approximately R12 300 for the business.
Therefore, careful planning needs to be done before a vendor decides to deregister for VAT purposes or ignores the letter from SARS stating that they are suspending your Vat registration as their could be large costs involved.
| 26 January, 2009 | YEAR END UPDATE -CELEBRATING 20 YEARS IN PRACTICE
What a year this has been. It is amazing how quickly time flies, especially when we are confronted with the extraordinary challenges of our current times.
We did send a very important email out last month with the latest developments and strongly suggest you read it as it contains some very important changes to the tax system to be introduced early next year. A copy is saved under our “Announcements” on our web page.
SARS are continually changing the goal posts and setting earlier deadlines and in order to be able to complete your required returns on time we are going to need all your information as early as possible next year. We are finding that in many instances there is a lot of information outstanding when we start working on client’s affairs making it very difficult for us to complete it, as we have to keep stopping and starting. This can be very time consuming and can add to your costs unnecessarily. With this in mind I plan to send out a more detailed memo on what we require at year end (after end of February 2009) to assist clients to bring in a more COMPLETE list of the information that we will be requiring.
With this being our 20th year in practice we would like to take this opportunity in thanking you for your continued support and loyalty since becoming a client and look forward to looking after your financial affairs for the next 20 years and beyond and assure you of our best service at all times.
We have enjoyed tremendous growth since we started out in a small office with only one employee back in January 1989. We were one of the first accounting practices in Port Elizabeth to have a website and to use the medium of mass emails to keep our clients informed and up to date with important information.
While it can be a challenge at times, we have embraced all SARS moves towards an integrated “intellectual” electronic filing and assessment system and have upgraded our IT and internal administration systems to incorporate those of SARS. While SARS systems still have a way to go we are confident that they are on the correct path and look forward to the future when all has been implemented and running smoothly.
We spend a lot of time and money on continued professional development and while this is a professional requirement we go far beyond those set by our regulatory bodies to ensure that we are always up to date and on top of our game. With the fast changing world of taxation legislation this is vital.
We wish you and your families well over the festive season and hope that everybody takes the opportunity to relax and spend time with family and friends.
Kind Regards
FINTAX PE TRUST
RBW 18/12/2008
| 18 December, 2008 | YEAR END CLOSE DOWN
Kindly note that we will be closing our offices from the 22nd December 2008 and reopening on the Monday 12th January 2008.
We would also like to take this opportunity to wish all our clients well over the festive season and a prosperous New Year and thank you all for your continued support.
Yours Faithfully
Fintax PE Trust
RBW12/12/2008
| 12 December, 2008 | TAX UPDATE FROM FINTAX
by Royden Whitfield
This is a very important update on what’s going on in the world of Taxation Administration in South Africa so please read it.
New R1million Vat Threshold
We have had a lot of enquires regarding the new increased Vat threshold of R1million. Please note that this is effective only from 1 March 2009 and if your turnover is below this level and you intended to step out of the Vat system then this can only be done after 1 March 2009.
Proposed New Small Business Tax
This is also only likely to be introduced next year and could be applicable to business who’s Turnover is below R1million. It will NOT apply to all business and one will need to do some homework to establish if it would be applicable and if so whether it would be beneficial to your specific circumstances. We will send out a detailed explanation on what all this entails early next year and will assist clients who could benefit by switching.
Tax Clearance Certificates
This has become quite literally an absolute nightmare!!
If a taxpayer requires a tax clearance certificate for a government tender or to make an overseas investment, SARS will not issue that certificate unless all supporting documents are provided AND there is NO OUTSTANDING TAX OR RETURNS OF ANY FORM. This includes Income Tax, VAT, SDL, PAYE etc. Now the problem arises in that SARS do not issue any statement of account for any taxes that are outstanding, so a taxpayer has no idea that he may owe one of these taxes until he applies for a Tax Clearance certificate, hard to believe but true. In addition if their office has mislaid or misallocated a payment, its up to the taxpayer to provide proof or explanation of the problem, irrespective of how far back it may go. Even if you have proof that the return was sent in or the cheque has been cleared by your bank you will need to prove to them that its been paid and/or figure out how they have misallocated the funds. We have come across cases where SARS are refusing to issue a TCC because of returns that they say are outstanding for over 5 years, but that they have never advised taxpayers of such. Imagine the problems associated with now trying to go back 5 years to prove that the return or payment was made. In many instances these were submitted on time but not captured on their system!!! At a recent stakeholders meeting with SARS we were told that SARS are looking at introducing a consolidated statement that will reflect all outstanding tax and returns, but that this would take some time to implement.
Therefore we warn all clients that if you require a Tax Clearance Certificate do it sooner rather than later as it can be a very Looooong and costly process. DO NOT LEAVE IT TILL THE LAST MINUTE.
Vat Registrations
SARS have introduced a whole new set of stringent rules regarding Vat registration, making this a very time consuming and costly process.
2nd Provisional Tax Payments
All provisional taxpayers need to take special note of this proposed change. If accepted it could affect ALL provisional taxpayers from their next provisional tax return being 28 February 2009- so read this very carefully. Up till now you were able to base your 2nd provisional tax payment on your last years assessed income to ensure that you did not expose yourself to any risk of penalties.
A recent proposal by SARS will see a change to that practice and a requirement that all 2nd provisional returns will now need to be an 80% accurate payment of their total tax liability for the year ended. Thus for Feb 2009 your provisional tax payment had better be 80% accurate otherwise you will be hit with severe penalties. This is going to be a huge challenge for taxpayers who do not keep accurate monthly records (run monthly accounting). Even for those that do, it is still going to be very difficult to work out one’s liability without all the year-end CGT and other info from financial institutions that is only sent out in about April. While we will try assisting our clients this could be almost impossible for many clients who only start getting their affairs together after the end of the tax year. This change is extremely concerning to us and while we have, via our professional institutes, addressed our concerns with SARS it does not appear as if they will budge on the matter.
Log Books for Traveling Allowances
While I am sure you are tired of our continued reminders about log books we need to again remind you about their importance. SARS are now in nearly all cases requesting (in addition to the log book) supporting documentation to support your opening and closing kilometers. This is done by asking for copies of service history or an invoice from the company that services your car. They also ask for garage card records to ensure your mileage is correct to your logbook. Please ensure that you keep an accurate logbook for each car that you use for business and that you intend to claim as a business deduction.
Finally, this months recommended read - the article on the front page of Finance Week- 6 November Edition.
Kind Regards
FINTAX PE TRUST
RBW/ 14/11/2008
| 14 November, 2008 | FOREIGN TAX CLEARANCE CERTIFICATES
Bellow is an email recently forwarded to us from SARS regarding tax clearance certificates
Good day
As most of us know by now the process of a foreign investment has changed. There is no more issuing of manual certificates as all foreign applications must be captured on the TCC system.
Herewith are some key points regarding the process of the foreign investments:
The applications may be submitted and collected at ANY branch office as the issuing of a TCC for FIA is not area restricted
The application must be fully completed and signed by the taxpayer
All documents for proof of the source of capital must be attached to the application (original documents)
Application to be processed within 3 to 5 working days
Documents needed for different sources:
LOAN (loan agreement must be attached)
Where the parent lends money to the child
The parent must provide evidence of the source of the capital AND
A loan agreement must be provided
The trust lends money to the trustee/beneficiary
A trust deed must be provided:
Loan agreement AND
List of names of all trustees and beneficiaries
The company lends money to a director
Loan agreement between the company and the director AND
Original bank statements from the company, duly stamped by the financial institution, not older than one month
DONATION
If the donation is between spouses
Only a declaration must be submitted
If the donation is not between spouses
Proof (the receipt) that donations tax is paid and
Original bank statements duly stamped by the financial institution, not older than one month (from both parties)
INHERITANCE
A letter from the executor of the estate must be attached
A copy of the liquidation & distribution account must be attached
Original bank statement duly stamped by the financial institution, not older than one month
SAVINGS/CASH/BANK ACCOUNT
Original ban statement duly stamped by the financial institution, not older than one month
FIXED DEPOSITS
A current original bank statement duly stamped by the financial institution where the money is held
SHARES
A letter from the institution confirming that the institution will transfer the funds offshore will be sufficient
This letter must contain the amount of shares and estimated current market value available
SALE OF PROPERTY
A copy of the Deed of Sale
A copy of the transfer duty declaration signed by both parties where they affirm the purchase price
A letter of the conveyancer to confirm the transfer of the property
The transfer duty receipt
Original bank statement duly stamped by the financial institution, not older than one month or
A letter from the conveyancer stating that the money will be transferred from his/her trust account
OTHER
Proof and explanation must be submitted
EARNINGS
Where a taxpayer has recurring foreign investments not exceeding R30 000 per annum a salary slip is needed once a year
The policy number and
It must be noted the institution (e.g. Sanlam/Old Mutual) will apply on behalf of the taxpayer
A TCC cannot be issued if a taxpayer is not on register for income tax purposes
The TCC system will decline where another TCC application is captured on the system which is less than 30 days from the new application.
COLLECTION OF A CERTIFICATE (at any SARS Branch Office)
A tax clearance will only be issued:
On presentation of the letter received via e-mail and
South African identity document
If the TCC is collected by a representative (i.e. any other person except the taxpayer) then a power of attorney must be produced to the SARS Branch Office
VALIDITY OF A TCC
A TCC remains active for 12 months provided that the taxpayer remains compliant with SARS
The new FIA001 is available on SARS Intranet and the website. Please ensure that the new application form is completed when applying for a clearance ( see attached application form)
These changes only applies to foreign investments, nothing has changed regarding to the tender and good standing applications.
Kind regards
Chantel Pretorius
Uitenhage Branch Office
Fax: 0865 192 374
E-mail: cpretorius1@sars.gov.za
Please Note: This email and its contents are subject to our email legal notice which can be viewed at http://www.sars.gov.za/Email_Disclaimer.pdf
| 13 November, 2008 | CIPRO ANNUAL RETURNS FOR CLOSE CORPORATIONS
We refer to our previous emails and correspondence and again wish to REMIND you that CIPRO Annual Returns will become payable for all Close Corporations from 1 September 2008.
All returns must be submitted on the anniversary date of the formation of your Close Corporation. Therefore it is vital that you are aware of the anniversary date of the formation of your Close Corporation and ensure that your annual return is submitted by the end of the month following the month of the anniversary of the incorporation of the CC.
Fees payable to CIPRO are as follows:
R100 for a CC with turnover of up to R50 million
R4000 for a CC with turnover more than R50 million
Penalties of R150 will be payable if the annual return is not lodged by the end of the month following the month of the anniversary of the incorporation of the CC, as prescribed by Sec 15A(3) of the Close Corporations Act.
If returns are not submitted CIPRO will take steps to have the CC removed from the register.
We suggest that you visit www.cipro.co.za in order to obtain the necessary information on how to submit your annual return on line or call them on 086 184 3384.
We are able to assist you and submit the returns on your behalf for a fee R171.00 per submission (this fee excludes the Cipro fee). You will however have to contact Charmaine at our office should you wish us to assist in this regard as we are unable to assume this responsibility without your instructions.
Charmaine’s email address is - charmaine@fintaxpetrust.co.za or call her on 041-3743201.
| 6 October, 2008 | 2008 Financials and Tax Returns and 3Rd Top up Provisional payment.
August 2008
2008 Financials and Tax Returns and 3Rd Top up Provisional payment.
As you may be aware SARS now require (as from 2008) that all IRP 5 certificates and reconciliation’s be completed via the new easy file (efiling) system. While this is a very good idea in the long term, the move to this new system has delayed the issuing of IRP 5 and other supporting documents until the end of August this year. This has resulted in many clients not been able to submit all their required information to us on time.
In addition SARS has delayed the efiling season this year and we have been advised that we will only be able to start the efiling process from the 1 September.
While this is again going to put us under pressure to meet deadlines, we do not see this as a major problem (at this stage) as, in addition to increasing our staff compliment, we have extension for the submission of all business returns until the end of the year.
We request that you bear with us over this period and appreciate that our main concern at this stage is to get the financials and relevant tax returns completed. We do have a first in first out queuing system for clients work received to ensure that we maintain a fair system on delivery.
Those taxpayers with possible top up payments are able to make voluntary 3rd top up payment at anytime after the end of September should they wish to avoid interest. Remember this is not a deadline for the submission of the returns but just a voluntary payment to avoid interest running on any short payment of provisional tax from1 October 2008. The interest SARS charge is currently 14% per year while interest on an overdraft at prime is 15.5% per year. Therefore should you be worried that your taxable income has increased significantly on last year and that you may have underpaid on provisional tax, please send us an email ASAP and we will estimate an amount to be paid.
Remember this would only be necessary should you not wish to pay SARS interest.
Kind Regards
FINTAX PE TRUST
| 15 August, 2008 | Security Transfer Tax
Security Transfer Tax has been introduced by SA Revenue Services to replace the revenue stamp duty system and is effective as from 1 July 2008. Thus if a change in membership in a Close Corporation or change in shareholding in Pty/Ltd Company (listed or unlisted) occurs, STT must be paid over to SARS. The amount payable is determined & calculated on the value of the member’s interest/shares transferred, at a rate of 0.25%. STT must be paid by the 14th day of the month following the month during which transfers occurred.
Payment can only be made via SARS e-filing (www.sarsefiling.co.za). We are corresponding with SARS to enable manual payments (cheques or cash). Failure to make the required payments will result in interest and penalties.
Should our office attend to any of these amendments on your behalf, we will calculate the tax payable and accommodate where we can to assist with the payments via e-fling.
You may contact Charmaine Lötter charmaine@fintaxpetrust.co.za at our office for any queries or assistance required in this regard. Alternatively contact Morgan Whitfield on morgan@fintaxpetrust.co.za.
FINTAX PE TRUST
RW/cl 15/08/2008
| 15 August, 2008 | SARS NEW EMPLOYEES TAX SYSTEM
by Royden Whitfield
SARS have announced that from 1 July 2008 to 29 August 2008 businesses will be required to submit PAYE information (EMP501 returns and employee tax certificates) using the new procedures for the Employers Filing Season 2008.
This can be done electronically using the online e-filing system on free software that will be made available by SARS. SARS says it will ensure greater accuracy and allow all IRP5, IT3 (a) and IRP501 returns to be submitted electronically or on a CD delivered to a SARS office.
This “new” system to be introduced by SARS must be taken EXTREMELY SERIOUSLY by business owners who employ staff and deduct EMPLOYEES TAX from their employees. Every business owner in this position must ensure they understand what their obligations are and will need to ensure that they complete and submit the required forms to SARS well before the deadline date of 29 August 2008 or face SEVERE PENALTIES (10% of the total employees tax deducted on all staff for the year).
This responsibility rests with you and even if we have assisted you to complete and reconcile your IRP5 returns in prior years we will NOT BE ABLE TO AUTOMATICALLY do so this year. Therefore, if you have already submitted your employees tax info (IRP5, Payroll and Recons etc) to us with your year end information assuming that we will attend to this for you when we draft your year end financials you will need to come and collect and attend to the submission of these returns via the electronic format now required by SARS.
We have been provided with very little information from SARS to exactly how this will work but they do assure us that by implementing their automatic payroll software it will be fairly easy because the software automatically produces all the information required to populate the on-line forms and returns. Only time will tell how successful this “new” system and its implementation by SARS will be.
The SARS Port Elizabeth office, are providing FREE training and assistance in this regard and we strongly suggest you contact Chantel Pretorius cpretorius1@sars.gov.za who can arrange a session to discuss the changes and impact on your business from a PAYE perspective and meet and train your payroll staff in the coming weeks on the new SARS Software, e-filing and returns regarding PAYE.
Due to the short notice and deadline imposed by SARS on the new system we are going have to have to rely on SARS to assist our clients as far as possible and STRONGLY suggest that you make contact with them if you are having any problems with the conversion to this new system.
Please remember that this notice only applies to business that are registered for employees tax and deduct PAYE and SITE from the salaries and wages paid to their staff. If you are not registered for employees tax as a business owner and you do not deduct PAYE/SITE it has no impact on you.
Don’t forget that this is a general email sent via our website to all our clients so please do not click on reply to sender as it will not reach us.
Kind Regards
FINTAX PE TRUST
RBW 27/06/2008
| 27 June, 2008 | THE ESTATE AGENTS AFFAIRS BOARD ANNUAL AUDIT REPORT 2008
If you run your own Estate Agency business the annual audit report for the estate agents affairs board needs to be completed for your business for the 2008 tax year.
Kindly forward the necessary bank statements from 1 March 2007 - 28 February 2008 FOR YOUT CLIENT TRUST ACCOUNT in order for our office to attend to this for you. Even if there has been no activity on the Trust Account bank statements we still need them. If you have received the official audit report in the mail from the board, please deliver this as well.
Please ensure that we receive the requested information no later then 31st May 2008 in order to ensure that it is completed and submitted timeously to the board.
| 16 May, 2008 | CAR LOG BOOKS – SARS
With the tax season fast approaching we would like to again emphasize the importance of ensuring that if you receive a car allowance, or run your own business and use a car for business purposes, you supply us with a detailed and accurate log book of business kilometers travelled for the tax year. This would be required for every car used.
We have, on many occasions, given you details of what is required and remind you to visit our website www.fintaxpetrust.co.za click on ‘important announcements or publications’ and scroll down until you come to the example of a log book if you still need help.
SARS are now doing detailed audits on log books where they are not only requesting the log book itself, but proof of the ODO meter reading of the car during the period in question. Basically what they do is they either request from you, or directly from your service provider, a copy of an invoice during the year when the car was sent in for a service. As you know, whenever your car goes in for a service your ODO meter is recorded. They then compare this at the same date in your log book and if things do not balance they could firstly, disallow your entire claim, and secondly, possibly take criminal action for misrepresentation. Therefore, with no accurate and complete log book, there can be no claim.
Please ensure that you follow the correct procedure with regard to log books and understand that should you not bother, you can also lose out on an extensive deduction resulting in additional tax payable. Please note that this is not a requirement by us, but a requirement by SARS and while it is an annoyance, it is something that must be done and it must be done correctly.
FINTAX PE TRUST
| 9 May, 2008 | LEARNERSHIP AGREEMENTS
The purpose of this e-mail is to remind clients again of the Section 12 H deduction allowed in terms of the Income Tax Act where an employer has entered into a Learnership Agreement with a staff member.
If you have entered into a Learnership Agreement, which is registered with your relevant Skills Development Levies SETA, it is imperative that you provide us with details of that agreement, as well as details of specific remuneration paid for that employee, in order that we can claim this Section 12 H deduction when completing your year end financials and tax returns. For more details on what this learnership allowance is all about please visit our website, click on publications, and then click on learnership agreements.
FINTAX PE TRUST
RBW 30/4/2008
| 30 April, 2008 | EXCHANGE CONTROL
by Royden Whitfield
One of the most important changes to Exchange Control policy for individuals is the introduction of a single discretionary allowance. Any natural person over the age of 18 years is allowed a single allowance of R 500 000 per calendar year, without the requirement to obtain a Tax Clearance Certificate. It is used to cover the following expenses:
· Monetary gifts and loans to non-resident individuals and to resident individuals who are overseas temporarily (excluding residents who are abroad on holiday or business travel).
· Donations to missionaries – on the strength of a letter from a recognized religious body.
· Maintenance transfers to a father, mother, brother, or sister who is ‘in necessitous circumstances’.
· Travel allowance. These may now be transferred to the resident’s bank account overseas. Note that South African residents studying abroad may not receive a foreign exchange travel allowance.
This is separate from the R2 million foreign capital allowance. It may not be used to invest in overseas assets. Residents under 18 do not get the allowance. They will be entitled to the normal R 160 000 travel allowance per calendar year.
An increase in the R 500 000 discretionary allowance will only be agreed to in exceptional cases.
| 25 April, 2008 | 2008 TAX REQUIREMENTS
IMPORTANT NOTE : READ CAREFULLY
Dear Client
As you are no doubt aware, the 2008 tax year came to an end on 28 February 2008 and we will soon be requiring all your relevant information to complete and submit your IT12/IT14 income tax returns.
To give you time to gather the relevant information we will, on your behalf, attempt to arrange for an extension for the submission of your returns to the South African Revenue Services until September 2008. However, Revenue will NOT grant extension for your 2008 tax return should your 2007 returns not have been submitted or should you have any outstanding tax liabilities.
Revenue has indicated that no further extension will be granted after the end of September for salaried taxpayers and only in select instances will additional extension be granted for businesses until the end of December 2008. Penalties of up to 20% of your tax liability can automatically be levied if your returns are late this year.
It is VITAL that your financial information is submitted to us in sufficient time to enable us to finalize your tax and accounting matters well before the final due dates of September and December. Accordingly we require ALL your information by no later than 30 May this year. Information submitted later could result in us being unable to finalize your financials on time.
Please note the onus for submission of returns to the South African Revenue Services rests with you, the taxpayer.
PLEASE REMEMBER THAT EACH TRUST AND CLOSE CORPORATION IS A SEPARATE TAXPAYER AND SEPARATE RETURNS NEED TO BE SUBMITTED.
Please bear in mind that should your net taxable income exceed R 50 000 for the year, a third topping up provisional payment is required before the end of September.
Please note that should you use your vehicle for business purposes we will be unable to submit a claim if you do not provide a logbook for each vehicle with the relevant information.
KINDLY NOTE WHEN DELIVERING INFORMATION TO OUR OFFICE – MARK YOUR INFORMATION CLEARLY FOR THE ATTENTION OF THE SPECIFIC PERSON HANDLING YOUR AFFAIRS, THE TAX YEAR AND YOUR NAME
Please turn over to get a brief indication of the type of information we will be requiring which must serve only as a guide to assist you. Please ignore details that do not affect you.
Kind Regards
FINTAX PE TRUST
RBW 28/3/2008
GUIDE OF INFORMATION REQUIRED
___________________________________
1. IT12 Income Tax Return. (This will in most cases be in our possession).
2. Interest Statement IT3(a). IT3 Certificates.
3. Retirement Annuity Certificates.
4. IRP5 Certificates.
5. Section 18 (A) Donation Certificates.
6. Cash Book or computer printout of TRIAL BALANCE and DETAILED LEDGER.
7. VAT 201 Returns and working papers.
8. Bank Statements, cheques / deposit books for the year ended 28 February 2008.
9. List of Stock on hand as at 28 February 2008.
10. List of Creditors as at 28 February 2008.
11. List of Debtors as at 28 February 2008.
12. Cash on hand as at 28 February 2008.
13. Copies of monthly: UIF Returns, Employees tax returns
14. Copies of new lease, rental and Installment Sale Agreements with finance houses
(i.e. Stannic, Wesbank etc)
15. Fixed asset schedules and FULL details of all your motor vehicles including details of cars sold and purchased during the year.
16. List of bad debts.
17. Building Society / Bank / Bond statements for the year ended 28 February 2008.
18. Medical Aid Tax Certificates plus details of number of members and dependents covered by the medical aid.
19. CGT MATTERS. Details of all Capital assets disposed of during the year that may have Capital Gains Tax implications.
20. LOG BOOK for each vehicle used for business (This must reflect opening and closing KM)- see example under publications on our website www.fintaxpetrust.co.za
21. Details of the bank account for each taxpayer within your group - VERY NB
| 28 March, 2008 | CIPRO ANNUAL RETURN FOR CLOSE CORPORATIONS
Dear Client
We wish to inform you that CIPRO (Registrar of Close Corporations) now requires annual returns of information to be submitted for all Close Corporations from 1 May 2008. Fees that need to be paid to CIPRO are as follows:
R100 for a CC with turnover of up to R50 million
R4000 for a CC with turnover more than R50 million
Penalties of R150 will be payable if the annual return is not lodged by the end of the month following the month of the anniversary of the incorporation of the CC, as prescribed by Sec 15A(3) of the Close Corporations Act.
All Close Corporations (active or NOT) need to file an annual return. We suggest that you visit www.cipro.co.za in order to obtain the necessary information on how to submit your annual return on line or call CIPRO on 086 184 3384.
We are able to submit these returns on your behalf – our fee will be R171.00 per submission (this fee excludes the CIPRO fee). Please contact Charmaine charmaine@fintaxpetrust.co.za or call her on 041 3743201 should you require our assistance.
Don’t forget that this is a general email sent via our website to all our clients so please do not click on reply to sender as it will not reach us.
Regards
FINTAX PE TRUST
14/03/2008
| 14 March, 2008 | HAPPY NEW TAX YEAR
The beginning of March brings with it the beginning of another new Tax year. We will soon be requiring all your relevant information to complete and submit your 2008 IT12/IT14 income tax returns and will send out our normal reminders at the end of March. However you can visit our website www.fintaxpetrust.co.za and download the YEAR-END GUIDE so long that will indicate to you what information we will need.
As you know, the introduction of e-filing by SARS has not gone nearly as smoothly as they had hoped and at this stage only individual e-filing seems to be running at a satisfactory level. What this basically means is that e-filling of close corporations, companies, incorporations and trusts is still not yet fully operational from SARS point of view. With SARS extensions policy dictating that all filing must be done via e-filing this year, you can appreciate that this has put us under great pressure and we would like to this opportunity to thank all our clients who have been patient with us over this testing period. We sincerely hope that SARS resolve these gremlins and we can get back to normal as soon as possible. Despite these problems, we are excited about this new format of filing tax returns and are encouraged by SARS attempts to resolve problem areas and their proposed vastly improved system that we believe should be implemented during the course of this year.
It is becoming VITAL to keep up to date on all Taxation and related matters and ensure that ALL Tax returns are submitted on time. It is therefore VERY important for clients to read all our e-mails and visit our website www.fintaxpetrust.co.za regularly to keep abreast and confirm due dates etc. Remember that your tax affairs and ensuring that you comply with the various sections of the Tax Act and the submission of all your Tax Returns on time remains YOUR responsibility and accordingly you need to be as informed as possible.
Don’t forget that this is a general email sent via our website to all our clients so please do not click on reply to sender as it will not reach us.
FINTAX PE TRUST
RBW/03/03/2008
| 3 March, 2008 | 2008 Tax Year coming to an end
Friday is the last day of the 2008 tax year. Please take note of the following:
- Record the closing KM reading on Friday the 29th for all cars that are used for business travel.
- You have an accurate logbook for each car used for business (e.g. under publications on our website www.fintaxpetrust.co.za).
- Those clients that have their own business that have TRADING stock on hand must do a stock take of all trading stock on Friday the 29 February 2008 (as per normal)
- If you plan to make use of the donations tax exemption - a cash transfer of UP TO R100 000 must be made to your Trust by the end of the month (29 Fen 2008). Remember both spouses may donate up to R100 000 each to their Trusts.
For those few clients that have still not yet handed in their 2007 (1/3/2006 to 28/2/2007 i.e. last year) accounting and/or tax information to us, we suggest you do so ASAP as SARS will start issuing FINAL DEMANDS shortly.
Please note that we are experiencing an extremely high volume of phone calls this week and with nearly all our staff tied up with efiling and provisional tax deadlines with SARS until Friday evening, we request that you rather contact us next week should you need any assistance.
Don’t forget that this is a general email sent via our website to all our clients so please do not click on reply to sender as it will not reach us.
Many Thanks
FINTAX PE TRUST
Rbw27/02/2008
| 27 February, 2008 | 2008 Main tax proposals
The 2008 Budget proposes R10.5 billion in net tax relief. The proposals include:
• Personal income tax relief for individuals amounting to R7.7 billion
• An increase in the compulsory VAT registration threshold from an annual turnover of R300 000 to R1 million
• A simplified tax package for very small businesses with an annual turnover up to R1million
• A reduction in the headline corporate tax rate by one percentage point from 29 to 28per cent
• A review of learnership allowances to encourage apprenticeships
• The second phase of reforms to the secondary tax on companies (STC), culminating in the introduction of a final withholding dividend tax at shareholder level in 2009
• Incentives to encourage venture capital equity investments in small and medium sized businesses
• R5 billion in tax subsidies over the next three years to support the emerging industrial policy
• Measures to encourage private land owners to protect biodiversity
• The introduction of an electricity levy of 2 cents per kilowatt hour.
| 20 February, 2008 | ANNUAL TAX ADMIN BILL
Our Annual Tax Admin Charge, billed in January of each year covers your ENTIRE group of active income tax entities and covers the following:
1) The completion and submission of both August & February IRP6 Provisional Tax Returns for the calendar year for ALL your active entities (i.e. Mr, Mrs, Trusts, CC etc).
This entails:
1. Receipting all the IRP 6 Returns.
2. Obtaining duplicates if not issued or sent to another address.
3. Checking the Last Taxable income and relevant calculations.
4. Discussing the payment requirements with clients if need be.
5. Sending letters notifying clients of amounts to be paid.
6. Collecting the relevant payments from clients. (Including follow-ups)
7. Capturing all of the above procedures and payments on our computer system. (Which is now vital due to SARS misallocations)
8. Hand delivering the payments and returns to SARS on the due date.
2) The obtaining of an extension for the submission for the IT12 or IT14 income tax return from the South African Revenue Services until October of each year.
1. This is done for all your entities.
2. Progress reports and re-submissions have to be made to SARS.
3) The receipting and checking of ALL your IT34 Income Tax Assessments raised by SARS.
This entails –
1. Receipting of all the IT34 assessments from SARS.
2. Checking to see if they are correct.
3. Notifying SARS by way of a letter of any errors on the assessments. However, an additional fee,
based on time spent may have to be raised on assessment that are found to be incorrect due to
SARS errors or as a result of incorrect or outstanding information from the client.
5. Notifying SARS Accounts Department to withhold collection procedures on incorrect assessments.
6. Forwarding assessments to clients.
7. Notify clients of tax refunds.
8. Notify client of payment requirements..
4) Computerised recording of all the transactions.
5) Incidental costs such as filing and storing of records and acting as registered and postal address for the South African Revenue Services.
A fee of R 592.80 (incl. Vat) will be charged for your first entity. Should you have more than one active taxpayer, we allow a discount of 10% on the second entity, a further 10% on the third and a further 10% on the fourth, etc. You will NOT receive small debit notes from time to time to cover these services as they have been covered in the Annual Tax Charge. Please note that this fee does not cover SARS audits or tax queries, general assistance and consultations that you may require during the year.
Please note that your statement is a valid tax invoice.
Yours faithfully
FINTAX PE TRUST
| 14 February, 2008 | YEAR END UPDATE
14 December 2007
Dear Clients
It is quite unbelievable how time has flown this year and that we are already moving towards the festive season.
This year has been extremely testing for us, mainly due to the small business tax amnesty that had to be submitted within deadline dates and all the additional workload that accompanied the amnesty. As our clientele is traditionally in the small, medium business sector and the professional arena, many of our clients could apply for and enjoy the benefits of the amnesty. As a result of that, and the continuous amendments and changes at the last minute by SARS, it was a very testing time for us to be able to get clients’ amnesty applications in on time and also continue with our normal work.
All amnesty applicants who have a levy to pay must please make sure you pay your levy by the deadline date. Remember your amnesty will fail if you do not pay your levy by the due date.
As can be appreciated all this additional work has resulted in a little bit of a backlog with regard to our normal accounting and tax filing function this year. However, I am glad to say that we have nearly caught up.
Another matter that SARS forced upon us this year was the move to the e-filing process which, in the long run, is going to be substantially beneficial not only to SARS, but also to you, the taxpayer, and ourselves who assist clients in this regard. However, the introduction of the e-filing by SARS has not gone nearly as smoothly as they hoped and I can say that, at date of writing, only individual e-filing seems to be running at a satisfactory level. What this basically means is that the submission of close corporations, companies, incorporations and trusts is still not yet fully operational from SARS point of view. However, we will continue to persevere with SARS and provide whatever input we can and move forward in this direction. As many of you know, we
have registered all our clients and that is not only individuals, but your trusts, close corporations and companies on e-filing. We have upgraded our computer systems, our e-filing capacities and employed personnel specifically in this department and will endeavor to file by whatever deadlines are set by SARS, provided SARS are up and running properly.
With the move towards e-filing and the so-called ‘paperless society’, there is a misconception amongst some clients that you don’t need to provide supporting documentation anymore because SARS don’t require them. Nothing could be further from the truth. From our perspective, before we can actually submit a return electronically, we need to submit certain information that we need to obtain off the relevant supporting documentation and without that information we are unable to submit the return electronically as SARS just automatically reject it. So, for example, this idea that you no longer need to submit logbooks is incorrect as without certain information that we need to take off the logbook, we are unable to complete the return correctly resulting in it being rejected. The same thing applies with regard to IRP.5’s, Retirement Annuity Certificates, Medical Aid contributions and so on. In this regard we can also advise that with us now having to do a lot of the work for SARS it will free up more of their personnel to attend to areas such as audit and investigations and accordingly we are anticipating an increase in this form of activity by SARS in the future. Therefore it is imperative that clients keep accurate and precise accounting records of their various businesses and personal taxation matters. In short, if you do not have a good accounting system within your business operation this needs to be outsourced, or you need to employ someone to do this as the consequences of erroneously or incorrect submissions to SARS can be extremely severe and can even lead to criminal sanction. Therefore, we cannot stress enough the importance of ensuring that your accounting and taxation affairs are accurate, up to date and submitted to us timeously to ensure that deadlines are achieved. .
I do believe next year is going to be fairly challenging as SARS continue to roll out the e-filing process with the time that it takes to settle and to sort out the various gremlins. However, it is clear that the e-filing process is the way forward as it will reduce the large number of errors that are coming out of SARS’ office. SARS themselves are facing serious challenges of their own with regard to restructuring and administration and we are finding it very difficult to be able to deliver in certain aspects where we are reliant on SARS. The examples of these are tax clearance certificates, statements of account, revised assessments and so on. As you know, we are unable to deal with the local office but have to deal through a call center now and that is proving to be quite a challenge. We do believe that SARS are addressing a lot of these issues and we hope that matters will settle in the not too distant future. However, clients need to appreciate that in most instances the delays in obtaining tax clearances, foreign investment clearance certificates, details as to additional assessments raised, or just refund cheques or assessments, is really out of our hands and we are totally reliant on SARS in this regard.
An excellent survey has been recently carried out by the Foreign Investment Advisory Services of the World Bank Group. This was a survey of tax practitioners performed with the co-operation of South African Institute of Chartered Accountants, the South African Institute of Professional Accountants and the South African Institute of Certified Bookkeepers. It was interesting to find that the most burdensome aspect of the tax practitioner at the moment is the capturing and processing errors made by SARS and the time taken to correct these errors by SARS, penalties and interest incorrectly raised by SARS with regard to provisional tax and the time taken to correct these errors and the period taken to register for Vat So clearly dealing with SARS at the moment is a challenge for all of us and I hope that things will be improving. The response from SARS to the survey was that reforms and improvements in addressing most of the concerns raised in the survey are already in process including designing a more streamlined Vat registration process, automatic submission and the tracking of objections and appeals. They also indicated that the issue of errors on the capturing of returns would be addressed by the electronic filing of returns that is going to be made more accessible in the future. Basically this is e-filing and we certainly agree with SARS and that is why we have taken the initiative to register all our clients on e-filing during the course of this year.
FAST CHANGING LAW REGARDING THE ADMINISTRATION AND LAW OF TRUSTS
Another matter I would again like to bring to the attention of all clients who have trusts is the fast change of the law regarding the administration and law of trusts. In the last couple of years there have been some dramatic changes in our law with regard to the administration and certain minimum legal requirements for a trust to be valid. These have come about by the various decisions handed down in our courts. We have over the last couple of years been bringing these matters to your attention, specifically with regard to ensuring that you have independent trustees of your trust and that you correctly administer your trust. Therefore those clients who have trusts please ensure that your house is in order in this regard.
For all clients whose 2007 (March 2006 to Feb 2007) financial information has not yet been submitted to us we suggest that you do so as soon as possible.
Finally I would like to take this opportunity to thank all my clients for your loyal support during the course of the year and we look forward to a long and continued relationship with you. We wish you and your families well over the festive season and hope that everybody takes the opportunity to relax, spend time with their families and we look forward to seeing and hearing from you in the new year.
Please note that our offices will be closed from the 18th December to the 7th January.
Don’t forget that this is a general email sent via our website so please do not click on reply to sender as it will not reach us.
Many thanks.
Kind regards
ROYDEN WHITFIELD
FINTAX PE TRUST
| 14 December, 2007 | E-FILING AT SARS
As you might be aware, the 2007 tax returns are now available for submission on the SARS e-filing website. We are hoping to accommodate SARS’ request and register our entire client base on the SARS website in order to submit these returns on your behalf via e-filing.
In order to lodge these returns correctly we are required to insert each taxpayer’s personal details. Should any information that is mandatory on the tax return be omitted, it will be rejected by SARS and a fresh return would have to be lodged.
Note that the bank details are extremely important, as SARS will no longer issue refunds in cheque format. Instead they will electronically transfer the funds into the taxpayers account. Please state should you and your spouse have joint bank accounts.
In order to ensure that we have EACH TAXPAYERS correct and updated details we request that you please complete the below form for EACH OF YOUR ENTITIES and email back to us at mail@fintaxpetrust.co.za.
We appreciate your prompt assistance in this regard in order to avoid any delays in submission of your 2007 tax returns.
If you have any queries, please do not hesitate to contact our office.
Yours Faithfully
FINTAX PE TRUST
Please complete the details below FOR EACH OF YOUR ENTITIES (e.g. spouse, children, CC’s, Pty’s, Trust’s) and email back to mail@fintaxpetrust.co.za.
FULL NAME OF TAXPAYER: …………………………………………………………………………..
ID (or d.o.b) OR REGISTRATION NUMBER: ……….…………………….……………………………
PASSPORT if no ID: ………………………………………………….……………………………
MARRIED (YES / NO): …………………………………………..………….………………………
MARRIED IN or OUT of community of property: …………… ……………….……….………………
BUSINESS ADDRESS (not postal): ……………………………………………………………………
RESIDENTIAL ADDRESS (not postal): ……………………………………………………………….
HOME TELEPHONE: ……………………………WORK TELEPHONE: …………..………………
FAX NUMBER: …………………………………CELL PHONE: ………………………………………
BANK DETAILS FOR THIS ENTITY
BANK NAME: ……………………………………………………………………………………………
A/C NUMBER: ………………………….………………………BRANCH NO: ………………………
NAME OF ACCOUNT: ……………………………….…………………………………………………
CHEQUE OR SAVINGS ACCOUNT: ………………………………………………………………..
Please reply to mail@fintaxpetrust.co.za
| 17 August, 2007 | Outstanding Fintax Accounts
Dear Clients 25 June 2007
Most of you will be aware of the new National Credit Act that has been introduced with effect from the 1st June 2007.
In terms of this Act, certain businesses who are not traditional credit providers will fall into this legislation as a result of incidental credit agreements such as allowing customers to pay off outstanding accounts. This creates all sorts of compliance formalities and the need to register as a Credit Provider.
As we are not able to register as a credit provider, we are forced not to be able to provide credit any longer to clients. Most of our clients do settle on presentation of their fee note, or statement, but there are certain clients who do take time to pay and therefore this change, forced upon us, will be affecting those clients.
Settlement of our account can be made in cash, cheque, or electronic bank transfer (internet transfers) and/or credit or debit card. We do have credit card facilities and those of you who are unable to settle their account in full immediately can take advantage of their budget facility on their credit card, which effectively means you can pay off your fee by using the budget facility on your credit card.
With effect from the 1st June 2007 we are no longer allowed to advance credit to any client and we request that you please co-operate in this regard. For those clients who have outstanding accounts, we would request you contact the partner attending to your affairs and make arrangements for the settling of the outstanding debt as soon as possible. Please note that we will accommodate clients as best that we can over this transitional period.
We apologise for the inconvenience caused by the above, but obviously have no control over legislation and have to comply therewith.
Yours faithfully
FINTAX PE TRUST
| 1 August, 2007 | TRUSTS-ADMINISTRATION AND FORMALITIES REGARDING YOUR TRUST
Please be advised that once your trust has been established, it is important that you follow all the correct legal, accounting and administrative procedures that are required in terms of Trust Law. To assist you in this regard, we list below certain points that are essential for the good governance, administration and legality of your trust.
1. Please ensure that you open up a bank account for your trust and that the donation received by the trustees from the donor be deposited into this bank account.
2. Should the trust receive any further donations it is imperative that the assets donated, if they are in the form of cash, be deposited into the trust’s bank account. This is not only required from a good governance point of view, but also to ensure that there can be no CGT implications on the waiver of a debt, as opposed to a physical donation of an asset.
3. Please ensure that the trust is always legally solvent i.e. its assets must exceed its liabilities.
4. Please ensure, at all times, that as many trustees as possible should be independent of the beneficiaries and that there must never be a situation that trustees and beneficiaries are the same people as this could invalidate the trust. The more independent trustees the better and when we talk about independent we are talking about trustees who are not beneficiaries.
5. Please ensure that the trustees hold meetings for all decisions that are made and that these meetings are properly minuted, and properly held, and records of all these meetings are kept in a Minute Book for the trust.
6. Where at all possible it is important that unanimous decisions be made by the trustees.
7. It is vital that no single trustee can be seen to be controlling the trust in any way i.e. it should not be seen as one’s alter ego.
8. Not only is it important to minute meetings, but it is imperative that all trustees meet on a regular basis to ensure the good governance of the trust’s assets in the best interest of the beneficiaries.
9. Please ensure that proper accounting and bookkeeping records are kept for the trust and that all information is recorded on an annual basis.
10. Should we be appointed as the trust’s accountant, please ensure you visit our website, www.fintaxpetrust.co.za and click on year end guide to get an indication of the information that we require. We also suggest that you visit our website for the various articles on how to administer and run your trust according to correct legal principles.
11. It is suggested at all times that all the trustees unanimously sign the Financial Statements, or unanimously sign a Minute authorizing an individual to sign the Financial Statements on behalf of the trust, and that distributions, income or capital are unanimously agreed to by all the trustees in the correct manner. (Copies of what should be in this minute is on our website (Publications) and listed on the year end guide.)
12. Finally, we suggest that an agreement be entered into between the trustees to ensure that should you not have a majority of independent trustees, that no major decisions be made on behalf of the trust unless that independent trustee is in the affirmative. In other words he should hold a veto vote on decision making procedures.
Should the above not be clear we suggest that you contact us, or seek further legal advice in this regard.
FINTAX PE TRUST
| 17 July, 2007 | TRUSTS AND AMNESTY FOR SMALL BUSINESSES
We refer to all previous correspondence regarding the small business tax amnesty and must advise that there is going to be a late amendment to the ACT to accommodate certain types of Trusts.
Previously only Trusts where the beneficiaries were ONLY natural persons could qualify. This excluded most Trusts as most Trusts generally have other Trusts and companies and charities included in the definition of beneficiary. However an amendment has been proposed to include Trusts where natural persons are included as beneficiaries and a distribution of Trust income has been made to a natural person as a beneficiary in either the 2004, 2005 or 2006 tax year ONLY.
Therefore Trusts that have distributed to other Trusts, companies or charities etc or have not made a distribution at all or only have other Trusts or companies as beneficiaries will be EXCLUDED and CANNOT apply. This means most Trading Trusts that are owned by family Trusts will be excluded.
All the other conditions as referred to in our previous correspondence on this amnesty must also be met in order for the Trust to qualify.
If you have traded via a Trust and you feel that you may need to apply for amnesty because of non disclosure of income or are worried that the Trusts tax affairs could have been incorrectly declared or 2005 and prior years are still outstanding, then you will need to contact us ASAP for us to determine if your Trust will qualify. This amnesty ends at the end of this month 31 MAY 2007 and we are FAST running out of time. SARS have not helped by leaving this amendment so late and we APPEAL to clients that ONLY those of you who have a concern about the accuracy of your Trusts affairs to contact us.
If you have made full and honest disclosures of your Trusts Tax affairs you do NOT need to apply for amnesty and therefore do not need to contact us. This is ONLY for those whose Trusts Tax affairs are not in order.
If you need help please contact the person who attends to your affairs by email RATHER THAN PHONING as it will make this process a lot easier and quicker for us as we can first then identify if the Trust you wish to apply for is going to qualify or not. We will then get back to you thereafter. If we have not got back to you within 7 days then please call in case your email went missing.
Please do not click on reply to this email as it’s a MASS email and the reply goes to the mass email server and NOT directly to the person attending to your affairs. Therefore please use the following emails should you need assistance depending on who attends to your affairs and make reference to the Trust that you are thinking of applying for.
Royden Whitfield’s clients use Royden@fintaxpetrust.co.za
Minette Nesbit’s clients use minette@fintaxpetrust.co.za
| 11 May, 2007 | AMNESTY FOR SMALL BUSINESSES
We refer to the various correspondence that we have already sent via e-mail, or snail mail, in regard to the above and would like to take this opportunity to bring this to your attention FOR THE LAST TIME.
THIS AMNESTY ENDS ON 31 MAY 2007
If you are a small business trading as a sole proprietor, close corporation, or company with a turnover under 10 million, it is very possible that you qualify for this amnesty. It does not mean that if your affairs are all in order that you cannot apply. Basically this amnesty will cover anybody who qualifies, as referred to above. Even if all your tax affairs are in order and up to date, it is still something worth considering. This amnesty is fantastic mainly due to the fact that you do not have to explain to SARS why you are applying for amnesty. In other words, you do not have to give full details of what transgressions you may have made over the years. All that is required is an amnesty application form being submitted, together with full details of assets and liabilities and your 2006 financials.
Therefore, even if you believe that your affairs are in order, it is still worth considering due to the fact that once amnesty is granted SARS will not go back and audit your affairs for the 2005 and prior years. This has significant benefits in itself. One must remember that errors may have crept into your bookkeeping that you may not even be aware of and therefore if the levy payable is not significant it is certainly something to consider purely for piece of mind to ensure that what is the past is the past and that the door is closed from a SARS audit point of view.
This is an AWSOME AMNESTY that is currently on offer by SARS. Those who qualify and do not ensure that they apply their minds to it properly and make an informed decision regarding it, do so at their peril. We do not see SARS offering anything like it again. So what is it all about?
Visit our website www.fintaxpetrust.co.za or SARS website which is www.sars.gov.za for more information on this amnesty, or contact Jillian at our office who will be able to give you some guidance in this regard.
Yours faithfully
FINTAX PE TRUST
| 3 May, 2007 | OFFICE CLOSURE MONDAY 30 APRIL
Please note that this office will be closed on Monday 30 April 2007 due to the public holidays on the 1 May and 27 April. We will be back at work as usual on Wednesday the 2 May.
Thanks
FINTAX PE TRUST
| 19 April, 2007 | MINUTES REQUIRED FOR YEAR END FINANCIALS
TRUSNAME
MINUTES OF THE MEETING OF THE TRUSTEE AT THE PLACES AND ON THE DATES SET OUT BELOW.
TRUSTEES PRESENT:
TRUS1
TRUS2
TRUS3
TRUS4
NOTICE
Due notice having been given, the meeting was declared properly constituted.
TRUSTEES
The Trustees throughout the accounting period under review and at the date of this report were as per the Letter of Authority issued by the Master of the High Court from time to time.
MEETING OF TRUSTEES AND ADMINISTRATION
The Trustees confirm that appropriate meetings and signed resolutions as well as all procedural and administrative requirements as set out in terms of the Trust Deed, the Trust Property Control Act, 1988 and as would generally be required to be done to perform their duties correctly have been performed/adhered to and filed in an appropriate manner.
TRUSTEES REMUNERATION
Trustees remuneration as provided for in the Financial Statements for the period under review was duly confirmed.
DISTRIBUTIONS MADE TO BENEFICIARIES
Distributions (if any) to beneficiaries of income or capital as reflected in the financial statements were approved by the Trustees in the appropriate manner. Where distributions have been made to beneficiaries who are also Trustees the appropriate voting procedure and measures have been followed by the Trustees to ensure that such Trustee’s private interests have not conflicted with those of the Trust beneficiaries.
FINANCIAL STATEMENTS
The financial results for the period under review are adequately reflected in the financial statements. Accordingly the financial Statements, for the year ended 28 FEBRUARY 2007 were tabled and, after some discussion, were duly approved and adopted. It was agreed that any one of the Trustees listed above could sign the financials and tax returns for and on behalf of the Trust and the other Trustees.
ACCOUNTANTS
FINTAX PE TRUST, was re-elected as the Trusts Accountants.
There being no further business the meeting ended.
PRESENT:
PLACE ____________________ ________________________________
TRUS1
DATE ____________________ ________________________________
TRUS2
________________________________
TRUS3
________________________________
TRUS4
| 16 March, 2007 | YEAR END KM READING -LOG BOOKS
Please note the 2007 tax year comes to an end midnight tonight. Please remember to record your closing KM reading on each of the vehicles you use for business purposes before midnight tonight. This is an important part of the logbook we will require in support of any business claim on traveling for each vehicle used.
FINTAX PE TRUST
RBW 28/2/2007
| 28 February, 2007 | 2007- FINTAX BUDGET BRIEF
TAX Highlights of Finance Minister Trevor Manuels 2007/08 Budget:
· The income tax threshold for people under 65 would be raised by 7.5 percent to R43 000,
· The income tax threshold for taxpayers aged 65 and over would be increased to R69 000 from R65 000 currently, an increase of 6.1 percent.
· Tax-free savings thresholds — interest and dividends — would also be raised to R18 000 from R16 500 for taxpayers under 65 and to R26 000 from R24 500 for taxpayers over 65.
· It was proposed that the annual exclusion threshold for capital gains or losses be increased to R15 000 from R12 500.
· Increased tax-free medical aid contributions (tax-free contributions will rise to R530 from R500 for each of the first two beneficiaries and to R320 from R300 for each additional beneficiary);
· Basic exemption for estate duty adjusted for individuals from R2.5-million to R3.5-million;
· Donations tax adjusted from R50 000 to R100 000;
· The sale of shares held for more than three years would be treated as capital gains.
· Tax depreciation for the wear and tear of commercial buildings would be implemented at a rate of five percent a year — i.e. a write-off period of 20 years.
· Replacement of secondary tax on companies with a dividend tax and reduction in the rate from 12.5 percent to ten percent;
· Abolition of retirement fund tax;
FINTAX PE TRUST
RBW 21/02/2007
| 21 February, 2007 | AMNESTY FOR SMALL BUSINESSES
TAX AMNESTY FOR SMALL BUSINESSES
This is an AWSOME AMNESTY that is currently on offer by SARS. Those who qualify and do not ensure that they apply their minds to it properly and make an informed decision regarding it, do so at their peril. We do not see SARS offering anything like it again. So what is it all about?
In the February 2006 Budget the Minister of Finance announced that the government would be offering a tax amnesty to small businesses to afford them the opportunity to regularize their tax affairs.
This amnesty was introduced on 1 August 2006 and will run until the 31 May 2007. All application forms must be submitted during this period.
The amnesty will be applicable to any individual, unlisted company, close corporation, trust, co-operative or insolvent or deceased estate which meets with the following requirements :-
1. the individual or entity must have carried on a business.
2. the gross income during the 2006 tax year was not more than R10million.
3. in the case of a company or close corporation all the shares must have been held directly by individuals throughout the 2006 year of assessment.
4. in the case of a trust all the beneficiaries must have been natural persons throughout the 2006 year of assessment.
If an application for amnesty is successful, the applicant is granted relief from the payment of:-
1. income tax on the profits of the small business in all years of assessment preceding the 2006 year of assessment.
2. employees tax in terms of the 4th schedule during any tax period ending on or before 28 February 2006
3. VAT during any tax period ending on or before 28 February 2006
4. withholding tax in respect of amounts paid to non-residents during any tax period ending on or before 28 February 2006
5. STC in respect of any dividend declared or deemed declared in all the years of assessment preceding the 2006 year of assessment.
6. UIF during any tax period ending on or before 28 February 2006
7. SDL-skills development levies during any tax period ending on or before 28 February 2006
A levy based on the 2006 taxable profits of the small business will be payable based on a sliding scale starting at 0 to 5% will be payable.
This is a brief summary of the provisions of the amnesty and there are certain EXCLUSIONS as well as OTHER CONDITIONS that are applicable and we suggest you contact the partner attending to your affairs should you feel that this is something you may need to consider.
This is a very broad amnesty and would apply to MOST SMALL BUSINESSES and is certainly something to seriously consider should any aspect of your taxation affairs not be in order and up to date.
Please apply your mind properly to this Notice!!!
Yours Faithfully
FINTAX PE TRUST
| 13 January, 2007 | YEAR END CLOSE DOWN
Kindly note that we will be closing our offices from lunchtime on the 20th December 2006 and reopening on the 8th January 2007.
We would also like to take this opportunity to wish all our clients well over the festive season and a prosperous New Year and thank you all for your continued support.
Yours Faithfully
Fintax PE Trust
RBW12/12/2006
| 12 December, 2006 | TRUSTS AND TRUSTEE ADMINISTRATION
Trusts are still extremely beneficial in Estate and Personal financial planning in South Africa, but it is imperative that when setting one up you fully understand your obligations as a trustee and that the trust is set up correctly from the beginning. We set out below in point form various aspects with regard to trusts and trust administration that we believe you should be aware of. However, it is important that in addition to this that you clearly ensure that you understand your obligations as a trustee when administering a trust.
1. Make sure that you have at least three trustees of a trust and that at least one of these trustees is an independent person i.e. not related to the other trustees and/or any of the beneficiaries. In terms of various recent Court rulings this has now become extremely important and many of the Masters of the High Courts will not register a trust if the trust does not have at least one independent trustee.
2. If a trustee is also a beneficiary ensure that correct voting procedures are laid out for the allocation of benefits to such a trustee as beneficiary.
3. Make sure you clearly understand your obligations as a trustee. Make sure you understand the contents of the Trust Deed and you comply with them.
4. Make sure you understand the various legislation that affects your trust, especially the Income Tax Act and the Trust Property Control Act.
5. Make sure that you have been correctly appointed as a trustee i.e. the Master of the High Court has issued a Letter of Authority which clearly reflects that you and your co-trustees are authorized to act.
6. Always act with due diligence when making decisions with regard to the trust and that all decisions made are clearly recorded, minuted and registered in the records of the trust.
7. Determine the intention of the Donor/Founder of the trust and the needs of the respective beneficiaries.
8. Make sure that no inappropriate investments are made because this is quite often what leads to conflict between the trustees and a beneficiary at some future date.
9. Determine the needs of the beneficiaries. Always pay attention to the short, medium and long term needs of the beneficiaries.
10. Make sure that correct financial statements are prepared and when signing the financial statements make sure that you are duly authorized thereto and that the financial statements clearly reflect the position of the trust as it is the responsibility of the trustees to ensure this.
| 24 November, 2006 | LOGBOOKS CAR ALLOWANCES BUSINESS TRAVELLING
We have on many occasions advised our clients on the importance of keeping accurate log books for each vehicle used for business travel. SARS now automatically disallow any claim made that is not supported by a logbook. We often get details of claims without logbooks and have been submitting returns without the log books in order that our clients get the benefit. However this has created untold problems for us both with SARS and clients. Accordingly we are now unable to submit ANY claim WITHOUT the log book in support. The tax benefit can be large and we cannot stress enough the benefit of the deduction. On many occasions we get very basic log books with little information from clients, which SARS do not accept as a logbook. With this in mind we list below the minimum requirements of the logbook.
1. Description of the vehicle
2. Registration Number of the vehicle
3. Opening and closing KM readings
4. Daily KM record of BUSINESS trips
5. Short description of the business trip ( e.g. Visit to the bank to do deposits)
We do not need details of petrol costs on the logbook or litres used when filling up etc.
You can visit our website www.fintaxpetrust.co.za click on Publications and an example of a logbook can be printed out.
FINTAX PE TRUST
RBW 2/3/05
| 20 November, 2006 | ADMINISTRATION OF TRUSTS
ADMINISTRATION OF TRUSTS
We have on many occasions in the past pointed out the importance of ensuring that the administration of your family trust is done correctly.
It is important that you clearly identify trust assets as being trust’s assets and not those of your own and in order to do this proper accounting and record keeping must be done. In addition, proper Minutes must be passed from time to time empowering certain trustees to act for the Trust to acquire and to sell trust assets such as the acquisition of property, investments in unit trusts, approval of financials statements and the like. All these Minutes and other supporting documents must be signed by ALL trustees and recorded and it is advisable, on an annual basis, to provide copies of these to us to keep on file.
Further, it is strongly recommended that your FAMILY trust have AT LEAST 3 trustees who are all actively involved in the administration of the trust’s assets WITH AT LEAST ONE TRUSTEE NOT BEING RELATED TO THE BENEFICIARIES OR THE OTHER TRUSTEES (an outsider). It is important that not one trustee be seen to be able to make unilateral decisions and effectively controlling the trust. When a trust is to acquire or sell an asset or make an investment, approve financial statements or distributions etc, a proper meeting should be held where the matter is discussed in detail and a decision is then made by the ALL of the trustees to make such an acquisition or investment. There could be severe implications should it be proven at a later date that an individual trustee was effectively controlling the trust and utilizing the trust’s assets as if it was his own.
There have been some interesting court decisions recently regarding Trusts and there are many lessons to be learnt from these judgments such as:-
- Trusts where the Trustees are related to each other and are also beneficiaries should be viewed with circumspection
- People who treat their Trust assets as their alter egos are playing with fire.
- Trustees MUST UNDERSTAND their obligations when accepting such appointment and Trustees who ignore the provisions of the Trust Deed, including procedural and administrative requirements, do so at their peril.
- Persons dealing with Trusts should not assume that the trustees have complied with the procedural requirement of the Trust.
Please ensure that your Trust complies with all of the above and visit our website www.fintaxpetrust.co.za (publications) or contact Charmaine at our office should you require any further assistance in this regard.
Yours Faithfully
FINTAX PE TRUST
| 3 October, 2006 | Provisional Tax – 31 August 2006
Please be advised that SARS are extremely late with the issuing of the August provisional Tax Returns. Whilst we have now received some of the returns many are still outstanding from SARS. We would like to start sending out our usual letters but are unable to do so until we have received at least the majority of the returns from SARS. To do so now would be futile as we would need to send out letters again later and that would cause major confusion. SARS are aware of their problem and have promised to get the outstanding returns issued ASAP. To make matters worse we are unable to prepare our own duplicates as the risk of exposing you to penalties increases should our figures not correspond to theirs. Therefore we request that you be patient and we hope to send out letters by the end of next week.
Please do not reply to this email as it has been sent via a mass mail network and by clicking on reply to this email it will not reach us.
FINTAX PE TRUST
RBW 4/08/2006
| 4 August, 2006 | TAX AMNESTY FOR SMALL BUSINESSES
In the February 2006 Budget the Minister of Finance announced that the government would be offering a tax amnesty to small businesses to afford them the opportunity to regularize their tax affairs.
This amnesty will be introduced on 1 August 2006 and run until the 31 May 2007. All application forms must be submitted during this period.
The amnesty will be applicable to any individual, unlisted company, close corporation, trust, co-operative or insolvent or deceased estate which meets with the following requirements :-
1. the individual or entity must have carried on a business.
2. the gross income during the 2006 tax year was not more than R10million.
3. in the case of a company or close corporation all the shares must have been held directly by individuals throughout the 2006 year of assessment.
4. in the case of a trust all the beneficiaries must have been natural persons throughout the 2006 year of assessment.
If an application for amnesty is successful, the applicant is granted relief from the payment of:-
1. income tax on the profits of the small business in all years of assessment preceding the 2006 year of assessment.
2. employees tax in terms of the 4th schedule during any tax period ending on or before 28 February 2006
3. VAT during any tax period ending on or before 28 February 2006
4. withholding tax in respect of amounts paid to non-residents during any tax period ending on or before 28 February 2006
5. STC in respect of any dividend declared or deemed declared in all the years of assessment preceding the 2006 year of assessment.
6. UIF during any tax period ending on or before 28 February 2006
7. SDL-skills development levies during any tax period ending on or before 28 February 2006
A levy based on the 2006 taxable profits of the small business will be payable based on a sliding scale starting at 0 to 5% will be payable.
This is a brief summary of the provisions of the amnesty and there are certain EXCLUSIONS as well as OTHER CONDITIONS that are applicable and we suggest you contact the partner attending to your affairs should you feel that this is something you may need to consider.
This is a very broad amnesty and would apply to most small businesses and is certainly something to seriously consider should any aspect of your taxation affairs not be in order and up to date.
FINTAX PE TRUST
RBW 27/07/2006
| 28 July, 2006 | 2006 TAX REQUIREMENTS
IMPORTANT NOTE : READ CAREFULLY
Dear Client 1 March 2006
As you are no doubt aware, the 2006 tax year came to an end on 28 February 2006 and we will soon be requiring all your relevant information to complete and submit your IT12/IT14 income tax returns.
To give you time to gather the relevant information we will, on your behalf, attempt to arrange for an extension for the submission of your returns to the South African Revenue Services until September 2006. However, Revenue will NOT grant extension for your 2006 tax return should your 2005 returns not have been submitted or should you have any outstanding tax liabilities.
Revenue has indicated that no further extension will be granted after the end of September for salaried taxpayers and only in select instances will additional extension be granted for businesses until the end of December 2006. Penalties of up to 20% of your tax liability will automatically be levied if your returns are late this year.
It is VITAL that your financial information is submitted to us in sufficient time to enable us to finalize your tax and accounting matters well before the final due dates of September and December. Accordingly we require ALL your information by no later than 30 May this year. Information submitted later could result in us being unable to finalize your financials on time.
Please note the onus for submission of returns to the South African Revenue Services rests with you, the taxpayer.
PLEASE REMEMBER THAT EACH TRUST AND CLOSE CORPORATION IS A SEPARATE TAXPAYER AND SEPARATE RETURNS NEED TO BE SUBMITTED.
Please bear in mind that should your net taxable income exceed R 50 000 for the year, a third topping up provisional payment is required before the end of September.
Please note that should you use your vehicle for business purposes we will be unable to submit a claim if you do not provide a logbook for each vehicle with the relevant information.
KINDLY NOTE WHEN DELIVERING INFORMATION TO OUR OFFICE – MARK YOUR INFORMATION CLEARLY FOR THE ATTENTION OF THE SPECIFIC PERSON HANDLING YOUR AFFAIRS, THE TAX YEAR AND YOUR NAME
To follow is a brief indication of the type of information we will be requiring which must serve only as a guide to assist you. Please ignore details that do not affect you.
GUIDE OF INFORMATION REQUIRED
___________________________________
1. IT12 Income Tax Return. (This will in most cases be in our possession).
2. Interest Statement IT3(a). IT3 Certificates.
3. Retirement Annuity Certificates.
4. IRP5 Certificates.
5. Section 18 (A) Donation Certificates.
6. Cash Book or computer printout of TRIAL BALANCE and DETAILED LEDGER.
7. VAT 201 Returns and working papers.
8. Bank Statements, cheques / deposit books for the year ended 28 February 2006.
9. List of Stock on hand as at 28 February 2006.
10. List of Creditors as at 28 February 2006.
11. List of Debtors as at 28 February 2006.
12. Cash on hand as at 28 February 2006.
13. Copies of monthly: UIF Returns
Employees tax returns
Regional Services Council levies returns
14. Copies of new lease, rental and Instalment Sale Agreements with finance houses
(i.e Stannic, Wesbank etc)
15. Fixed asset schedules.
16. List of bad debts.
17. Building Society / Bank / Bond statements for the year ended 28 February 2006.
18. CGT MATTERS. Details of all Capital assets disposed of during the year that may have Capital Gains Tax implications.
| 10 March, 2006 | HAPPY NEW TAX YEAR
The beginning of March brings with it the beginning of another new Tax year. We are glad to confirm that there were some interesting and beneficial tax proposals in the recent BUDGET (see announcements on www.fintaxpetrust.co.za). It is becoming VITAL to keep up to date on all Taxation and related matters and ensure that ALL Tax returns are submitted on time. It is therefore VERY important for clients to read all our e-mails and visit our website www.fintaxpetrust.co.za regularly to keep abreast and confirm due dates etc. Remember that your tax affairs and ensuring that you comply with the various sections of the Tax Act and the submission of all your Tax Returns on time remains YOUR responsibility and accordingly you need to be as informed as possible.
FINTAX PE TRUST
RBW/01/03/2005
| 1 March, 2006 | LOGBOOK EXAMPLE
LOGBOOK-2004 TAX YEAR
TAXPAYER MR J BOND
VEHICLE DESCRIPTION VW BEETLE
VALUE OF VEHICLE R50 000
VEHICLE REG No TAX 007 EC
OPEN READING 74000
OPEN DATE 01/03/2003
CLOSE READING 84000
CLOSE DATE 28/02/2004
BUSINESS KM 5500 (As reflected below)
TOTAL KM 10000 (Deduct opening KM from closing KM above)
PRIVATE KM 4500 (Total KM for the year less Business KM Reflected below)
DATE KM TRAVELLED DETAILS OF TRIP
03/03/2003 25 SARS REGARDING COLLECTIONS
03/03/2003 20 DEBTORS CHEQUE PROCESSING
05/03/2003 38 MONTHLY REPORTS ON DEBTORS
05/03/2003 28 SARS MONTHLY RETURNS DELIVERY
07/03/2003 29 POST OFFICE COLLECTION OF POST
07/03/2003 38 DEBTORS CHEQUE PROCESSING
11/03/2003 35 CLIENT VISIT – CLIENT NAME
13/03/2003 29 POST OFFICE COLLECTION OF POST
14/03/2003 40 MONTHLY REPORTS ON DEBTORS
17/03/2003 39 VISIT SUPPLIER – SUPPLIERS NAME
17/03/2003 39 DEBTORS CHEQUE PROCESSING
18/03/2003 34 DELIVERY TO CLIENT – CLIENT NAME
19/03/2003 39 DEBTORS CHEQUE PROCESSING
28/03/2003 776 GEORGE CALL ON CLIENT – CLIENT NAME
26/03/2003 37 DEBTORS CHEQUE PROCESSING
03/04/2003 38 VISIT FINTAX REGARDING TAX MATTERS
03/04/2003 36 SARS MONTHLY RETURNS DELIVERY
03/04/2003 37 PURCHASE OF OFFICE SUPPLIES
04/04/2003 38 MONTHLY REPORTS ON DEBTORS
04/04/2003 39 DEBTORS CHEQUE PROCESSING
04/04/2003 30 PURCHASE OF STATIONERY FOR OFFICE
08/04/2003 30 POST OFFICE
08/04/2003 39 SARS MONTHLY RETURNS DELIVERY
SAME AS ABOVE FOR EACH AND EVERY MONTH UNTIL END FEBRUARY
24/02/2004 29 SARS MONTHLY RETURNS DELIVERY
24/02/2004 29 VISIT FINTAX REGARDING TAX MATTERS
27/02/2004 39 DEBTORS CHEQUE PROCESSING
Total Bus.KM 5500
| 28 February, 2006 | YEAR END KM READING -LOG BOOKS
Please note the 2005 tax year comes to an end midnight tonight. Please remember to record your closing KM reading on each of the vehicles you use for business purposes before midnight tonight. This is an important part of the logbook we will require in support of any business claim on traveling for each vehicle used.
FINTAX PE TRUST
RBW 28/2/2005
| 28 February, 2006 | 2006- FINTAX BUDGET BRIEF
Changes effecting Individuals
1. Top marginal tax stays 40%,
2. Top tax threshold increased to R400 000.
3. Minimum tax threshold raised to R40 000,
4. Minimum tax threshold for over 65s raised to R65 000 a year.
5. Transfer duty on houses below R500 000 abolished; five percent rate applies between R500 000 and R1m, and eight percent above.
6. Offshore foreign currency allowance for individuals increased from R750 000 to R2m.
7. Regional Service Council levies abolished.
8. Monthly taxable benefit of a company car increased to 2.5% of its value.
9. Proportion of motor vehicle allowance subject to PAYE increased from 50 to 60%.
10. Threshold for individual tax-deductible medical expenses raised from five to 7.5% of income.
11. Donations tax exemption increased from R30 000 to R50 000.
12. Estate duty exemption increased from R1.5m to R2.5m
13. Primary residence exclusion from capital gains tax increased from R1m to R1.5m.
14. Tax on retirement funds reduced from 18% to nine percent.
15. Municipal property rates revenue zero-rated for VAT.
16. Maximum old age and disability grant, and care dependency grant, increased by R40, to R820 a month; foster care grant by R30, to R590; and child support grant by R10, to R190 a month.
Changes effecting Businesses
1. Annual turnover threshold for small businesses raised from R6m to R14m, and taxable threshold for the lower ten percent rate increased from R250 000 to
R300 000.
2. Small business income tax exemption threshold raised from R35 000 to
R40 000.
3. Small items under R5 000 (previously R2 000) – 100% deduction.
4. Deduction for research and development spending increased from 100 to 150%
5. Tax amnesty for small businesses.
Final Note
The tax benefits of Close Corporations and Companies that qualify as Small Business Corporations has again been increased significantly and must be investigated thoroughly by ALL who may qualify.
FINTAX PE TRUST
RBW 15/02/2006
| 15 February, 2006 | CLOSE CORPORATION ACT CHANGES
It appears as if the Close Corporation Act has been amended to allow for Trusts (with certain limitations) to hold an interest in a Close Corporation. This is a SIGNIFICANT amendment and will have some major estate planning advantages. It will also help to solve some of the problems created by the restrictions imposed on the holding of interests for Small Business Corporations.
FINTAXPETRUST
RBW/25/01/2006
| 25 January, 2006 | YEAR END CLOSE DOWN
YEAR END CLOSE DOWN
Kindly note that we will be closing our offices from lunchtime on the 21st December 2005 and reopening on the 9th January 2006.
We would also like to take this opportunity to wish all our clients well over the festive season and a prosperous New Year.
Yours Faithfully
Fintax PE Trust
RBW/14/12/2005
| 14 December, 2005 | RING FENCING OF ASSESSED LOSSES
SARS have indicated that as from the 2005 Tax Year, a loss from any Trading Activity will programmatically be ring fenced, unless the taxpayer can substantiate their claim by submitting documentation to prove that he carries on a business/trade with a reasonable prospect of deriving taxable income from such a business/trade. The taxpayer will then only be able to deduct the loss from that specific trade against his/her other sources of income for a CERTAIN PERIOD OF TIME.
Important factors to consider when determining whether the business is carried on to derive taxable income and thereby qualifies for the exclusion are as follows:
· The proportion of the gross income in relation to the amount of the allowable deductions;
· The level of activities or the amount spent on advertising and promotions;
· The commercial manner in which the trade is carried on, taking into account:
1. The number of full-time employees (other than persons employed to provide
services of a domestic or private nature);
2. The commercial setting of the premises; the extent of the equipment used exclusively for purposes of carrying on that trade; and
3. The time that the person spends at the commercial premises on the carrying on of the trade;
4. The number of years of assessment during which losses occurred in relation to the period from the date the person commenced with the trade and also taking into account:
5. Any unexpected events giving rise to any of those losses; and
6. The nature of the business involved;
7. The business plans and any changes thereto to ensure that taxable income is derived in future; and
8. The extent to which any trade asset is used, or is available for use for recreational purposes or personal consumption.
The above information is accordingly required in support of your claim. Please provide as much detail as possible in order to submit to SARS together with your 2005 Financial Statements.
| 3 October, 2005 | Access to Information/ PAIA: Exemptions
South African Human Rights Commission has released the following notice see their website www.sahrc.org.za
Access to Information/ PAIA: Exemptions relating to section 51 manuals
The Human Rights Commission welcomes the decision of the Minister of Justice and Constitutional Development to exempt private bodies from compiling and submitting section 51 manuals on 1 September 2005.
All private bodies with the exception of public companies are exempted from submitting the manual from 1 September 2005 until 31 Dec 2005. The effect thereof is that inter alia all sole proprietors, partnerships, private companies, close corporations, section 21 companies and body corporate will now be exempt from compiling and submitting their manuals at least until 31 Dec 2011. However, a further long - term exemption post 31 December 2005 has also been granted. The long - term exemption applies to all private bodies and private companies, except all public companies. The long - term exemption is for the period 1 January 2006 up to and including 31 December 2011.
However, if a private company employs 50 or more employees, or has a total annual turnover equal to exceeding the amounts set out in the Schedule herein below, it must comply with section 51, after 31 December 2011.
However, it is regrettable that this decision of a further exemption was made at this late stage, when members of the public have already incurred expenses in the compilation and submission of the manuals. The Commission did approach the Department of Justice and Constitutional Development for the exemption in question long before the due date.
Notwithstanding the decision of the Minister, the Commissions position has been for the past few years that the Act should be amended in order to exclude small private bodies from submitting the manuals in question - the temporary exemptions are not satisfactory as they result in uncertainty in the law and causes unnecessary stress to members of the public.
Agriculture
R 2 million
Mining and Quarrying
R 7 million
Manufacturing
R 10 million
Electricity, Gas and Water
R 10 million
Construction
R 5 million
Retail and Motor Trade and Repair Service
R 15 million
Wholesale Trade, Commercial Agents and Allied Services
R 25 million
Catering, Accomodation and Other Trade
R 5 million
Transport, Storage and Communications
R 10 million
Finance and Business Services
R 10 million
Community, Special and Personal Services
R 5 million
| 5 September, 2005 | ANNUAL RETURNS FOR COMPANIES
CIPRO has just made it known that all private companies will now be obliged to submit an annual return with effect from the 1st May 2005 together with the prescribed fees.
What this means is, should you have a (Pty) Ltd company (which includes a professional incorporation) you will need to submit an annual return to the Registrar of Companies with effect from the 1st May 2005. At this stage it does NOT apply to Close Corporations but we understand that it will be applying to Close Corporations from a date still to be announced.
Please note, this has nothing to do with your income tax and other returns that you have been submitting on an annual basis this is something new and has to be submitted to the Registrar of Companies (CIPRO).
These returns can only be done on-line. In other words they cannot be done manually or via the post and have to be submitted within the anniversary month of the incorporation date of the company.
Therefore it is vital that you attend to this matter when they become due and in this regard we suggest you contact the Registrar of Companies (CIPRO) direct on the following number in order to get assistance or an explanation as to how these should be done, or alternatively, we will be setting up an infrastructure within Fintax to assist clients with this new obligation. Should you wish to do it yourself CIPRO’S details are as follows :-
TELEPHONE NO: 086 184 3384
Should you wish Fintax to attend to this matter on your behalf on-line, please e-mail Charmaine at charmaine@fintaxpetrust.co.za with your name, contact number and the name of your company in order that we may contact you to explain exactly what we are going to need to do, how it is going to be done, and what our cost to assist you in this regard will be. There are prescribed statutory fees that will have to be paid to CIPRO which have been set out as follows:-
1. Should your company’s annual turnover be less than 10 million, the annual fee that you will have to pay CIPRO will be R 450.
2. If you annual turnover is above 10 million but less than 50 million, the fee that you will have to pay CIPRO will be R 2 500 per annum.
- 2 -
3. If your annual turnover is 50 million and above, the annual fee payable to CIPRO will be R 4 000.
CIPRO warned that should the annual returns not be submitted on the due date an automatic additional fee of R150 will be levied. They also advise that if after successful reminders the defaulter still fails to lodge and/or pay the fee, the Registrar will, after 6 months, institute deregistration proceedings against your company.
From the above you can see that it is vital that you comply with these obligations. Please note that these obligations apply whether your company is active or not. Therefore, if you have a company and it is actually not trading and you consider it dormant but it is still registered with the Registrar of Companies, it appears as though you will still have to submit this annual return and pay the prescribed fee.
Below please find the notification that we have taken off the CIPRO website which gives a full explanation about the abovementioned.
Yours faithfully
FINTAX PE TRUST
RBW/6.4.2005
Dear Customers
Section 173 of the Companies Act, 1973, which came into operation on 25 August 2003, provides that all companies must lodge an Annual Return with the Registrar. The section further requires that this return must be lodged every year by not later than the end of the month, which follows upon the month within which the anniversary of the date of the companys incorporation occurs.
Annual returns refer to the information that companies and close corporations must submit to the Registrar as confirmation that the company / close corporation is still in business and that the information provided is still valid. It has become imperative that Annual Returns should be introduced for purposes of data integrity and information reliability. Annual Returns are used in most countries across the world to update information kept by the Registrar.
All private Companies are obliged to submit their Annual Returns with effect from May 1, 2005 together with the following prescribed fees:
· Annual turnover less than R10m...............................................R450.00
· Annual turnover above R10m but less than R50m...............R2 500.00
· Annual turnover R50m and above...........................................R4 000.00
Since Annual Returns for Private Companies come into effect as from May 1, 2005, this means Companies that were incorporated in May, irrespective of the date and year, will have to submit their Annual Returns by no later than end of the following month, in this case its June. Those incorporated in June will lodge by no later than end of July, and so on.
Companies will only be allowed to lodge Annual Returns electronically. Electronic transactions will have the effect that CIPRO will not accept or receive paper documents or cash from the companies. All lodgments and payments will be done via an electronic banking system preferably by using credit cards. Alternatively, the required money can be deposited in the CIPRO bank account at ABSA Bank, Account no. 4055681017, Branch Code 323345. The reference required on the ABSA deposit slip is most important and all persons wishing to lodge annual returns must first register as a "customer" on the CIPRO Website. It must also be noted that only directors and officers of companies who are registered as such with CIPRO will be able to lodge Annual Returns.
Annual Returns will be facilitated through our CIPRO website where we will be showing the company what information CIPRO has on the company. The annual return information will be stored separately on our database and will not update the actual database. Companies will still be required to lodge any relevant CM Forms to update changed information.
If a company fails to lodge its Annual Returns and subsequently fails to pay the prescribed fee, an additional fee of R150.00 will be levied on the defaulter. If after successive reminders, the defaulter still fails to lodge and/or pay, the Registrar will, after six months, institute deregistration proceedings against the company.
Please note that this information will also be published in the newspapers and other communication media during the course of the week.
Yours faithfully
REGISTRAR OF COMPANIES
| 12 April, 2005 | BENEFITS – SMALL BUSINESS CORPORATIONS
We refer to our previous correspondence with regard to the above and specifically the amendments proposed in the recent budget by Trevor Manual.
We can now advise that the Draft Taxation Laws Amendment Bill of 2005 was recently released for public comment. Whilst this is not final, it does give us an indication as to the extent of the amendments that have been proposed.
The good news it that Section 12E of the Income Tax Act, which governs small business corporations, has been extended extensively and many businesses could now qualify. The most significant change is that the service sector could also qualify if you trade via a close corporation/company and employ 4 staff or more. If you run your business via a close corporation or company and that business provides personal services, which includes the field of accounting, agriculture, architecture, auctioneering, auditing, broadcasting, broking, commercial arts, consulting, draughtsmanship, education, engineering, entertainment, health, information technology, journalism, law, management, performing arts, real estate, research, secretarial services, sport, surveying, translation, valuation or veterinary science, you need to sit up and take note of these amendments.
In short, no tax has to be paid on the first R35 000 of taxable profits and then only 10% tax on the balance up to R 250 000 so the annual tax savings could be significant. In addition to this, accelerated depreciation write offs can also be enjoyed.
Please note that in order to qualify you have to trade as a close corporation or company. This close corporation or company’s turnover must not exceed 6 million rand per annum and no member of the company or close corporation can hold an interest in any other close corporation or company during the course of the year. Accordingly, a certain amount of planning may need to take place and advice given and hence your need to contact the partner attending to your accounting and taxation matters at your earliest convenience in order to determine if your business qualifies.
Yours faithfully
FINTAX PE TRUST
RBW 4/4/2005
| 1 April, 2005 | NB NB 2005 TAX RETURNS
As you are no doubt aware, the 2005 tax year came to an end on 28 February 2005 and we will soon be requiring all your relevant information to complete and submit your IT12/IT14 income tax returns.
To give you time to gather the relevant information we will, on your behalf, attempt to arrange for an extension for the submission of your returns to the South African Revenue Services until September 2005. However, Revenue will NOT grant extension for your 2005 tax return should your 2004 returns not have been submitted or should you have any outstanding tax liabilities. See SARS Extension rules under “Publication” on our website.
Revenue has indicated that no further extension will be granted after the end of September for salaried taxpayers and only in select instances will additional extension be granted for businesses until the end of December 2005. Penalties of up to 20% of your tax liability will automatically be levied if your returns are late this year. SARS EXTENSION RULES HAVE BEEN PASTED ON OUR WEBSITE UNDER ANNOUNCMENTS
It is VITAL that your financial information is submitted to us in sufficient time to enable us to finalize your tax and accounting matters well before the final due dates of September and December. Accordingly we require ALL your information by no later than 30 May this year. Information submitted later could result in us being unable to finalize your financials on time.
Please note the onus for submission of returns to the South African Revenue Services rests with you, the taxpayer.
PLEASE REMEMBER THAT EACH TRUST AND CLOSE CORPORATION IS A SEPARATE TAXPAYER AND SEPARATE RETURNS NEED TO BE SUBMITTED.
Please bear in mind that should your net taxable income exceed R 50 000 for the year, a third topping up provisional payment is required before the end of September.
Please note that should you use your vehicle for business purposes we will be unable to submit a claim if you do not provide a logbook for each vehicle with the relevant information.
Please visit our website www.fintaxpetrust.co.za and click on YEAR END GUIDE for a brief indication of the type of information we will be requiring which can serve as a guide to assist you. Please ignore details that do not affect you.
KINDLY NOTE WHEN DELIVERING INFORMATION TO OUR OFFICE – MARK YOUR INFORMATION CLEARLY FOR THE ATTENTION OF THE SPECIFIC PERSON HANDLING YOUR AFFAIRS, THE TAX YEAR AND YOUR NAME
Yours Faithfully
FINTAX PE TRUST
RBW23/3/05
| 23 March, 2005 | BUDGET TAX PROPOSALS - 2005
Income tax relief for everyone!
An individual younger than 65 years of age earning —
• R35 000 or less pays no income tax
• R60 000 pays tax equal to an average rate of 7,5 per cent of earnings and saves R500 tax a year
• R90 000 pays tax equal to an average rate of 12 per cent of earnings and saves R920 tax a year
• R300 000 pays tax equal to an average rate of 26,5 per cent of earnings and saves R4 570 tax a year
Increased exemption for interest income and distributions from unit trusts
The annual exemption for individuals younger than 65 years of age is raised from R11 000 to R15 000. The exemption for individuals 65
years of age and older is raised from R16 000 to R22 000.
A 40 year old individual investing R210 000 in a savings account at 7 per cent interest per annum is not taxed on the interest income of R14 700.
A pensioner and the pensioner’s spouse (both older than 65) each invests R275 000 (in total R550 000) and earns interest of 8 per cent per annum. They will not pay tax on the combined interest income of R44 000 earned during the tax year.
Claims against motor vehicle allowance for business travel.
Updated cost tables will apply from 1 March 2005 which reflect current fixed, fuel and maintenance cost. Fixed cost is capped at a vehicle to the value of R360 000. Where no log book of business travel is kept it is assumed that the first 16 000 kilometres of the actual distance travelled during the tax year is private and the next 16 000 of actual
distance travelled during the tax year is for business.
Transfer duty payable on the purchase of property is Reduced
The purchaser of a property costing —
• R190 000 pays no transfer duty
• R400 000 pays transfer duty of R12 600 which is R2 300 less than the duty previously payable
Excise tax is increased as follows from 23 February 2005:
• Malt beer – 5c per 340ml can
• Wine – 18c per 750 ml bottle
• Spirits – R1,48 per 750ml bottle
• Cigarettes – 52c per packet of 20
Levies on fuel will be increased from 6 April 2005 by:
• 10c per litre in the case of diesel
• 10c per litre in the case of petrol
Excise duties on sun protection products abolished Stamp duty on debit entries (to credit card and bank accounts) abolished
| 23 February, 2005 | SMALL BUSINESSES TAX PROPOSALS -2005 BUDGET
Budget 2005 contains a host of measures to help small businesses thrive. This is a summary of the tax measures that Minister Trevor Manuel announced today.
Relief for all small businesses
New to the tax system
• Single form: Only one form needed to register for all taxes, including Income tax and VAT
• Voluntary disclosure: Those who are not registered for tax or didn’t declare their income properly will be given a chance to come forward and we will not charge penalties. But you only get this chance if you come forward before we catch you!
Cutting the red tape
• New, simpler VAT scheme: The small retailers’ VAT package will be ready from April 2005. This is a simple way of accounting for VAT for businesses with a turnover of less than R1 million per year. It is meant for small retailers that don’t use modern cash registers.
• Fewer VAT returns: Small business with an annual turnover of less than R1 million will only be required to submit a VAT return once every four months from August 2005.
• Skills Development Levy exemption: Small businesses with an annual payroll of less than R500 000 will no longer pay Skills Development Levies from August 2005.
• RSC levies: Abolished from July 2006.
• eFiling: Applications for tax clearance certificates can be done online.
• Single Customs declaration: Imports and exports will be captured on one form.
Empowering Small Business
• Community tax helpers: SARS will send staff to visit small businesses to help them with tax issues like registration, tax returns and other tax obligations.
• Call centre: A single national call centre number will be created for all tax and customs enquiries.
• Small business help desks: Dedicated facilities will be made available for small business in the call centre and at SARS offices, with extended hours.
• Focus on VAT education: A specific campaign on VAT education will be undertaken.
• Accounting and payroll packages: SARS will make accounting and payroll packages available to small businesses. You can obtain software for your own computer or use one of the SARS kiosks we will set up.
BUSINESS
Relief for close corporations and companies
The following applies only to Small Business Corporations (SBCs):
• SBC programme expanded: The preferential treatment for SBCs will be expanded to include more service industries. SBCs employing at least four employees involved in core operations in, for example, architecture, engineering, entertainment and information technology will now qualify for this preferential system.
• Turnover threshold increase: The maximum annual turnover to qualify as an SBC is increased from R5 million to R6 million.
• Wear and tear: Besides the current 100% write-off for manufacturing assets, all other depreciable assets will be written off for tax purposes on a 50:30:20 basis over a period of three years.
• New tax rate structure:
Taxable income Rates
R 0 – 35 000 0%
R 35 001 – 250 000 10%
R 250 000 + 29%
These changes mean that:
A company that qualifies as an SBC with a taxable income of R400 000 will pay R32 500 less income tax than before.
A company providing information technology services with a taxable income of R400 000 that now qualifies as an SBC for the first time will pay R55 000 less tax than before.
Other companies and close corporations
• Tax rate down: The tax rate for companies and close corporations is reduced from 30 to 29 percent.
For more detailed information, visit the SARS website at www.sars.gov.za
| 23 February, 2005 | SARS POLICY ON DEFERRED PAYMENTS
South African Revenue Service Port Elizabeth Whytes Road, Port Elizabeth, 6001P.O. Box 345, Port Elizabeth, 6000Telephone (041) 5057500www.sars.gov.za
Dear Stakeholder,
SARS POLICY ON DEFERRED PAYMENTS
SARS has implemented several policies as from 1 November 2004 and I would like to take this opportunity to inform you of the policy relating to instalments especially with the Provisional Tax 2005/02 being due on 28 February 2005.
.
The following changes will be applicable with regards to the application for Deferred Payment Arrangements as from 1 November 2004:
· No automatic deferred payment arrangements shall be granted on all taxes.
· No deferment shall be considered unless written application with detailed reasons why a once off payment can not be made is received
· No deferred payment arrangement shall be granted over the telephone
· A Collection Information Statement must accompany all applications for deferred payment arrangements. Attached to this statement must be:
1. Bank statements of all accounts for the latest 3 months
2. Proof of all expenses claimed
3. Proof of income e.g. payslip
4. If married ANC then proof thereof
5. In case of a CC/Company then Cash flow, Debtors- Creditors lists
· Collectors may demand security as a condition of deferment if the client appears to be trading under insolvent circumstances
· No deferred payment arrangement shall be entered into if the taxpayer failed to honour previous deferred payment arrangements
· The deferment shall be granted in writing and the client will have to sign an agreement to secure the installment plan.
I trust that the policy, to grant clients the privilege to remit taxes in deferred payments, is clearer.
Regards
RECEIVER OF REVENUE
| 11 January, 2005 | NB! NB! 2004 TAX RETURNS
As you are no doubt aware, the 2004 tax year came to an end on 29 February 2004 (covering the period 1 March 2003 to 28 February 2004) and we are glad to report that most of our clients have provided us with their relevant information and their returns are in. A big thanks to all those clients who handed in their information on time.
HOWEVER there are still some of you who have not as yet brought in your 2004 Tax and Financial information and for those few, time is running out fast.
Revenue has indicated that no further extension will be granted after the end of February 2005 for the 2004 tax year. Penalties of up to 20% of your tax liability will automatically be levied if your returns are late.
Accordingly it is VITAL that all financial information is submitted to us before we close on the 15 December this year to enable us to finalize your tax and accounting matters well before the final due dates of February 2005. ( NOTE this only applies to those clients who have as yet not given us their 2004 Tax information)
Please note the onus for submission of returns to the South African Revenue Services rests with you, the taxpayer.
PLEASE REMEMBER THAT EACH TRUST AND CLOSE CORPORATION IS A SEPARATE TAXPAYER AND SEPARATE RETURNS NEED TO BE SUBMITTED.
Please note that should you use your vehicle for business purposes we will be unable to submit a claim if you do not provide a logbook for each vehicle with the relevant information.
Please visit our website www.fintaxpetrust.co.za and click on YEAR END GUIDE for a brief indication of the type of information we will be requiring which can serve as a guide to assist you. Please ignore details that do not affect you.
KINDLY NOTE WHEN DELIVERING INFORMATION TO OUR OFFICE – MARK YOUR INFORMATION CLEARLY FOR THE ATTENTION OF THE SPECIFIC PERSON HANDLING YOUR AFFAIRS, THE TAX YEAR AND YOUR NAME
Yours Faithfully
FINTAX PE TRUST
| 8 December, 2004 | YEAR END CLOSE DOWN
Kindly note that we will be closing our offices on the 15th December 2004 and reopening on the 3rd January 2005.
We would also like to take this opportunity to wish all our clients well over the festive season and a prosperous New Year.
Yours Faithfully
Fintax PE Trust
RBW/8/12/2004
| 8 December, 2004 | ADMINISTRATION OF TRUSTS
We have on many occasions in the past pointed out the importance of ensuring that the administration of your family trust is done correctly.
It is important that you clearly identify trust assets as being trust’s assets and not those of your own and in order to do this proper accounting and record keeping must be done. In addition, proper Minutes must be passed from time to time empowering certain trustees to acquire and to sell trust assets such as the acquisition of property, investments in unit trusts and the like. All these Minutes and other supporting documents must be signed and recorded and it is advisable, on an annual basis, to provide copies of these to us to keep on file.
Further, it is strongly recommended that your FAMILY trust have at least 3 trustees who are all actively involved in the administration of the trust’s assets WITH AT LEAST ONE TRUSTEE NOT BEING RELATED TO THE BENEFICIARIES OR THE OTHER TRUSTEES (an outsider). It is important that not one trustee be seen to be able to make unilateral decisions and effectively controlling the trust. When a trust is to acquire or sell an asset or make an investment, a proper meeting should be held where the matter is discussed in detail and a decision is then made by the majority of the trustees to make such an acquisition or investment. There could be severe implications should it be proven at a later date that an individual trustee was effectively controlling the trust and utilizing the trust’s assets as if it was his own.
| 12 November, 2004 | NEW REQUIREMENTS VAT INVOICES
All registered VAT VENDORS should be aware that from 1 March 2005 all tax (vat) invoices have to comply with new rules in order to be valid tax (vat) invoices.
Currently the following must appear on your tax invoice for it to be valid.
- The words “ TAX INVOICE” must appear in a prominent place.
- Your name, address and VAT registration number.
- The name and address of the recipient.
- The serial number and date of issue.
- Accurate description of goods and/or services.
- Quantity or volume of goods or services supplied.
- Price and Vat charged reflected separately with a total of the two together.
From 1 March 2005 your Tax Invoice (this also includes any debit or credit note) will also have to reflect the VAT NUMBER OF THE RECIPIENT (your customer).
However this new requirement will only apply to all transactions over R1000-00.
Please ensure that you make the relevant adjustments to your system in time and start requesting VAT numbers from your clients/customers.
This new rule applies to ALL VAT VENDORS on transactions over R1000-00. Please do not phone us to inquire if it applies to you as the answer is simply YES if you are a registered Vat Vendor ( i.e. charge VAT) and your charge exceeds R1000-00.
SARS VAT department will be able to assist on 5862404 or you may visit their website that may be accessed via our “LINKS” on our website at www.fintaxpetrust.co.za.
FINTAX PE TRUST
RBW11/11/2004
| 12 November, 2004 | THE DEDUCTION OF BOOKS AND JOURNALS FOR SALARIED TAXPAYERS
As all salaried taxpayers are aware, the Income Tax Act was amended significantly two years ago wherein many deductions and allowances that were previously deductible against taxable income were removed. However, one of the deductions that was not removed was the 11 (e) deduction in terms of depreciation. Accordingly, should you be in receipt of a salaried income and it is a condition of your employment that you subscribe to and receive various professional journals and/or books, magazines etc., you will be entitled to deduct this against your salaried income. Examples of this are lecturers, teachers, doctors and other professionals who are expected to keep abreast with certain legislation changes in order for them to perform their employment duties. Accordingly, it is imperative that should you fall into the above category that you provide us with full details of any expenses that you may have incurred in regard to the acquisition of books, journals, magazines etc.
FINTAX PE TRUST
| 23 September, 2004 | LOGBOOKS/TRAVELLING ALLOWANCES
As you are all aware, we have been advising our clients for quite some time now of the importance of a logbook should you utilize your vehicle for business purposes. In this year’s budget Trevor Manual made specific reference to the investigation of car allowances and that they intended to clamp down on abuses in this regard. Should you receive a travelling allowance and utilize your vehicle in the furtherance of your business, SARS will not allow a deduction against this travelling allowance unless a detailed logbook is submitted with your income tax return. Should you not submit a logbook at all, no claim will be entertained whatsoever. Accordingly, it is imperative that a logbook be submitted for each vehicle utilized by yourself in the furtherance of your business.
The logbook must reflect the initial value of the vehicle, the make of the vehicle, the opening kilometers on the 1st March and its closing kilometers on the 28th February of each tax year, together with daily details of the business kilometers travelled.
FINTAX PE TRUST
| 21 September, 2004 | CAPITAL GAINS TAX VALUATION
After being inundated with many calls with regard to capital gains tax valuations, we set out below a brief summary of what needs to be done.
We also refer you to our various articles on capital gains tax that we have posted on our website over the last 24 months that have already addressed this issue. In many instances most of our clients have already taken care of their requirements due to the fact that this deadline was initially the 30th September last year. This deadline has now been extended to this year.
VALUATION OF FIXED PROPERTY
1. Only property that was owned by you prior to the introduction of CGT on the 1st October 2001 needs to be valued. Therefore, any property that you may have acquired or purchased after the 1st October 2001 does not require a valuation due to the fact that it was acquired after the introduction of CGT.
2. All fixed property that you owned prior to the 1st October 2001 should be valued. However, residential property owned by the taxpayer and utilized by the taxpayer, as his residential home is exempt from CGT up to the first million rand.
3. However, should your residential home be owned by a close corporation, company or trust this exemption will not apply and it will be subject to CGT making the valuation imperative.
4. The Act does not stipulate who must do the valuation, anyone may do the valuation, but the valuation must be accurate as at the 1st October 2001 and the valuation must be able to be backed up and explained by whoever did it should SARS query it in the future. Obviously a registered valuator is the ideal person to value a property. However, many clients are utilizing the services of experienced and reputable estate agents and other members of the real estate profession.
5. The valuation only needs to be submitted to SARS when the property is actually sold one day. In other words, it does not have to be submitted by the end of September. The valuation must only have been completed by the end of September. Only properties in excess of 10 million rand will need to be submitted to SARS with the next tax return after the 30th September 2004. In other words your 2005 tax return. All other valuations only need to be submitted when the property is sold one day. As mentioned above, any fixed property with a valuation in excess of 10 million will, however, have to be submitted with your 2005 tax return (in other words next year).
6. We are unable to assist clients with the valuation of fixed property. However, we do recommend that copies (not the original) of the valuations be forwarded to us to be held in your file as a precautionary measure should you lose the original. Please note we only require a copy. We do NOT want the original, and our copy is just a backup to the original, which should be retained by you as the primary valuation copy.
VALUATION OF BUSINESSES
1 Only businesses that were already in existence, or acquired, prior to the 1st October 2001 need to be valued for the purposes of CGT.
2. Again, the Act does not prescribe who must do the valuation but anybody doing the valuation must be able to support his figures and the valuation must be accurate.
3. It is imperative that the valuation is market related with extensive working papers in order to support that valuation.
4. Only intangible assets, e.g. goodwill, that exceed a million rand need to be submitted to SARS with your next income tax return i.e. the 2005 tax year (next year). It does not have to be submitted to SARS by the end of September. All other valuations of businesses will only need to be submitted when the business is ultimately sold.
5. Again, it is recommended that a copy of the original valuation be forwarded to our office to be held on file as a backup to the original valuation, which must be retained by you.
FINTAX PE TRUST
| 21 September, 2004 | REMINDER -CGT VALUATIONS
Please note that SARS have stated that no further extension will be granted for the Valuation of Assets (as at 31 October 2001) after the end of September 2004. Therefore if you have not already got your valuations in order time is FAST RUNNUNG OUT.
FINTAX PE TRUST
26/08/2004
| 26 August, 2004 | URGENT-PROVISIONAL TAX AUGUST 1/2005
There are still many provisional cheques outstanding.
Thanks to all clients that have delivered their cheques timeously.
These cheques should have been delivered to our office before 18 August 2004. In order to avoid late submissions and penalties we need all outstanding cheques by no later than Friday 27 August. Any cheques received after this date will be late and you will be liable for an additional 20% penalty on the amount due. If you have not already sent in your cheque please do so immediately.
Your co-operation in this regard would be appreciated.
| 23 August, 2004 | PROVISIONAL TAX -AUGUST2004
We will be posting Provisional tax letters, for the 1st 2005 period due 31 August 2004, by the end of this week. SARS have introduced a new format to these IRP6 returns and this has resulted in a delay by SARS in sending out the forms. Should you not agree with the SARS estimate, a detailed explanation must be submitted. However SARS have again agreed to consider a split payment (3 months) but this is subject to their approval and we need to make a request to SARS. Remember SARS does charge interest over the 3 month period. Therefore any client who will be requiring a split payment over three months must fax or e-mail such request to us by no later than 18 August 2004.
| 2 August, 2004 | EMPLOYEES TAX/PAYE FOR DIRECTORS OF COMPANIES, CLOSE CORPORATIONS AND TRUSTEES OF TRUSTS
Some time ago the Income Tax Act was amended to make it compulsory for PAYE to be deducted from all the payments made to directors of companies, close corporations or trustees of a trust. Therefore, should you run your own business via the medium of a close corporation, company or trust, any remuneration or salary that you earn from your entity would need to be subject to a monthly deduction of employees tax and paid over to the Receiver of Revenue.
We have been in contact with our clients on many occasions in this regard and have assisted with the calculation of these amounts but must warn you that the situation changes from year to year and that it is important that you deduct PAYE according to the tables on whatever you draw from your entity from month to month.
A recent amendment was made by SARS that now allows Revenue to impose an additional penalty of up to 200 % on any under deduction of PAYE on remuneration earned by any of your staff or you as an employee of your own company, close corporation or trust. Therefore, it is important that you deduct PAYE from whatever you draw as a salary from month to month, as well as on any additional profits that you may draw out of your business from time to time.
Please contact us should you require any help in this regard.
Yours faithfully
FINTAX PE TRUST
RBW/24/5/2004
| 25 May, 2004 | FINTAX CLOSED ON TUESDAY 13 APRIL 2004
Due to the long Easter Weekend and then the public holiday on Wednesday as a result of the election, we have decided to close our office on Tuesday 13 April. We will be open for business as usual again on the Thursday 15 April.
FINTAX PE TRUST
| 2 April, 2004 | NB! NB! 2004 TAX RETURNS
As you are no doubt aware, the 2004 tax year came to an end on 29 February 2004 and we will soon be requiring all your relevant information to complete and submit your IT12/IT14 income tax returns.
To give you time to gather the relevant information we will, on your behalf, attempt to arrange for an extension for the submission of your returns to the South African Revenue Services until September 2004. However, Revenue will NOT grant extension for your 2004 tax return should your 2003 returns not have been submitted or should you have any outstanding tax liabilities.
Revenue has indicated that no further extension will be granted after the end of September for salaried taxpayers and only in select instances will additional extension be granted for businesses until the end of December 2004. Penalties of up to 20% of your tax liability will automatically be levied if your returns are late this year.
It is VITAL that your financial information is submitted to us in sufficient time to enable us to finalize your tax and accounting matters well before the final due dates of September and December. Accordingly we require ALL your information by no later than 30 May this year. Information submitted later could result in us being unable to finalize your financials on time.
Please note the onus for submission of returns to the South African Revenue Services rests with you, the taxpayer.
PLEASE REMEMBER THAT EACH TRUST AND CLOSE CORPORATION IS A SEPARATE TAXPAYER AND SEPARATE RETURNS NEED TO BE SUBMITTED.
Please bear in mind that should your net taxable income exceed R 50 000 for the year, a third topping up provisional payment is required before the end of September.
Please note that should you use your vehicle for business purposes we will be unable to submit a claim if you do not provide a logbook for each vehicle with the relevant information.
Please visit our website www.fintaxpetrust.co.za and click on YEAR END GUIDE for a brief indication of the type of information we will be requiring which can serve as a guide to assist you. Please ignore details that do not affect you.
KINDLY NOTE WHEN DELIVERING INFORMATION TO OUR OFFICE – MARK YOUR INFORMATION CLEARLY FOR THE ATTENTION OF THE SPECIFIC PERSON HANDLING YOUR AFFAIRS, THE TAX YEAR AND YOUR NAME
Yours Faithfully
FINTAX PE TRUST
| 26 March, 2004 | HAPPY NEW TAX YEAR
The beginning of March brings with it the beginning of another new Tax year. We live in fast changing times in the Tax Profession but we are glad to confirm that there were no SIGNIFICANT changes in the recent BUDGET . Nevertheless we all need to keep on the correct side of “Uncle Trevor” and will need to keep up to date on all Taxation and related matters and ensure that ALL Tax returns are submitted on time. It is therefore VERY important for clients to read all our e-mails and visit our website www.fintaxpetrust.co.za regularly to keep abreast and confirm due dates etc.
Remember that your tax affairs and ensuring that you comply with the various sections of the Tax Act and the submission of all your Tax Returns on time remains YOUR responsibility and accordingly you need to be as informed as possible.
FINTAX PE TRUST
RBW/01/03/2004
| 1 March, 2004 | YEAR END LOG BOOKS
Remember year end log books. We again remind you that all clients who run their own businesses or are in receipt of a travelling allowance to please provide us with a log book at the end of the year for each vehicle that is utilized for business purposes. Remember to ensure that you record all your mileage, specifically the mileage at the end of February of each year so one knows exactly what your opening/closing kilometers are year on year and your log book will reflect what would be business kilometers and what is private. Revenue now automatically disallows any motor vehicle claim should an accompanying logbook not be submitted.
| 26 February, 2004 | ASSESSED LOSSES TO BE RING FENCED
As brought to your attention before, it appears as though the proposal first mentioned in the 2003 budget and now contained in the Revenue Laws Amendment Bill, attempts to formalize situations where certain business losses will not be allowed to be deducted against normal taxable income. It should come into effect from the years of assessment commencing on or after 1st March 2004. An interesting note is that these provisions will not apply to companies, close corporations or trusts and only to natural persons who are taxed at a maximum marginal tax rate of 40 %. This means that it would only apply to taxpayers whose income before deducting the assessed loss exceeds the current maximum threshold in any year currently R255000.
If you have a secondary business running at a loss, which is classified or falls under their listing of a suspect trade, the proposed legislation could apply to you. However, even if a trade is classified as suspect, taxpayers do have the opportunity to show that its a legitimate business to avoid the proposed ring fencing of losses. If a taxpayer can prove that the trade constitutes a business with a reasonable prospect of generating taxable income within a reasonable period of time, then ring fencing of losses will not apply. There are certain circumstances to the above that would need to be met and it appears that if trade losses have been incurred in carrying out the so-called suspect activities for 6 years of assessments out of a 10 year period (commencing 1st March 2004), losses will still be ring fenced.
Obviously these amendments have a far reaching impact and should you be an individual whose taxable income exceeds R 255 000 (before your secondary trade assessed losses) you will need to discuss this issue with ourselves in order to understand exactly what implications these amendments will have to your tax affairs.
| 26 February, 2004 | PROVISIONAL TAX – SECOND PERIOD 2004
We will shortly be sending out our letters with regard to what your provisional tax liabilities are for the second period of the 2004 tax year due and payable on the 28th February 2004. Please check our calculations and contact us should you not be in agreement with the figures reflected therein. Please remember that any employees tax that you are paying monthly can be deducted against provisional tax paid. In most instances we would have taken this into account but in some cases, where we are not aware of the fact that you are now paying employees tax, this may not have been taken into account and it is simply a phone call away to discuss this issue should it be applicable. Please make sure that you follow the instructions as per our letter and ensure that we get the cheques timeously within the times as laid down in the letter. Also for those of you who would like arrangements made to pay off their provisional tax, you need to notify us as soon as possible as we have to get written authorization from SARS in this regard. Please, therefore, contact us as soon as possible should you be wanting to have your provisional tax paid over three months. Remember SARS will only allow a maximum of three months in which to pay your provisional tax, the months being February, March and April. Also remember that SARS do charge interest for these split payments.
| 23 January, 2004 | YEAR END CLOSE DOWN
Kindly note that we will be closing our offices on the 19th December 2003 ( monthly accounting close 12th December) and reopening on the 12th January 2004.
We would also like to take this opportunity to wish all our clients well over the festive season and a prosperous New Year.
Yours Faithfully
Fintax PE Trust
RBW/9/12/2003
| 9 December, 2003 | AMNESTY DEADLINE EXTENDED
After receiving what he described as "significant interest" in the governments Exchange Control Amnesty, South African Finance Minister Trevor Manuel has extended the due date of the amnesty from November 30, 2003 to February 29, 2004.
| 12 November, 2003 | FINAL REMINDER-EXCHANGE CONTROL AND TAX AMNESTY
We refer to all our various correspondence with regard to the above matter and must now advise clients that should the above be applicable to yourselves, or should you require any input or assistance from ourselves with regard to the above matter and have not already made contact with ourselves, please do so by the end of this week otherwise we are not going to be in a position to help you should the deadline not be extended after the end of November.
Yours faithfully
FINTAX PE TRUST
rbw10/11/2003
| 10 November, 2003 | EXCHANGE CONTROL & ACCOMPANYING TAX AMNESTY
I refer to the various e-mails we have sent with regard to the abovementioned and can confirm that significant amendments have been released with regard to the above matter.
This is precisely the reason why we have been advising clients to hold back until such time as clarity on certain issues can be obtained and with this now having been done, we can advise that we can now assist clients with regard to the above issues. Those clients who have already made contact with us with regard to the above can be assured that we will be contacting them within the next two to six weeks in order that matters relating to the above can be finalized and the relevant applications submitted.
Yours faithfully
FINTAX PE TRUST
RBW/October 2003
| 9 October, 2003 | DECLARATION FOR NOTIONAL INPUT VAT
SARS in their recent Vat news September 2003 stated that a new form (Vat 264) is presently being drafted to standardize the information which vendors must maintain in terms of Section 20 (8) of the Act to validate the notional input tax claims on second hand goods. The form will be a declaration by the person selling the goods (the owner) to the vendor claiming the notional input tax. This form will be made available on the SARS website shortly.
Accordingly, those of you who from time to time do acquire second hand goods from a non registered Vat vendor and who intend to claim a notional input, it is imperative that you visit the SARS website on a regular basis in order to obtain the new Vat 264 form. You can visit the SARS website at www.sars.gob.za., or alternatively go to our website and click under links.
FINTAX PE TRUST
RBWOctober2003
| 9 October, 2003 | PPS SICKNESS BENEFITS
We have, in the past, advised clients of the possibility of either the reduction of the PPS contributions towards sickness benefits being deductible or alternatively whether the actual benefit payouts would be taxable. After three years intensive discussions between SARS and PPS a ruling has now been received. The situation is now as follows:-
The contributions towards your sickness benefits will, as in the past, not be tax deductible. However, any payments received in future will be considered of a capital nature and therefore not taxable.
PREVIOUS TAX YEARS
It appears as though any sickness benefits that you were taxed on during the 2001 and 2002 tax years was therefore treated incorrectly. PPS has confirmed that they will be sending out letters correcting the situation for past tax years and should any client be in receipt of such a letter, please ensure that we get it immediately so that we can request a revised reduced assessment from SARS.
FINTAX PE TRUST
RBW 11 August 2003
| 11 August, 2003 | FIRST PROVISIONAL PAYMENT 2004 TAX YEAR
We will soon be posting out all Provisional Returns to clients where provisional payments are due and payable. Please keep an eye out for your Provisional letters and ensure that should you require split payment, that you notify us in writing before Monday 11 August 2003.
SARS have again confirmed that they will allow a split payment of a maximum of three months and that interest will be charged as always. Please ensure that all cheques are delivered to our office before the 19th August 2003.
In many instances where there is a nil payment required we won’t generally be advising clients. If you don’t hear from us with regard to the payment of provisional tax and it is your opinion that a provisional payment should be made, please contact our office by no later than the 20th August 2003.
Yours faithfully
FINTAX PE TRUST
RBW 4 August 2003
| 6 August, 2003 | FOREIGN EXCHANGE AND ACCOMPANING TAX AMNESTY
Having completed our first round of workshop seminars and studies with regard to the above issue, we must confirm that this is a very complex legislation .
The one thing that has come out abundantly clear, from every possible avenue , is that anyone who has foreign assets and has transgressed exchange control and/or income tax in that regard, would be a downright fool not to take advantage of the abovementioned amnesty.
There are many unanswered questions due to the complexity, and probably the haste, in which the Act has been drafted and we advise clients not to rush forward with their applications until such time as clarity on all aspects of the amnesty become available. We believe that certain amendments and changes to the Amnesty Act are in the pipeline and accordingly it is imperative that one waits for these amendments before an application is made. Remember that all amnesty applications are coupled with your 2003 tax return, and again we must advise that anyone who is considering applying for the amnesty ensure that all their 2003 taxation affairs, including all the income generated from overseas assets, have been provided to us and, if not, please provide same as soon as possible.
As soon as these latest amendments are published by Government, which we anticipate within the next 2 to 3 weeks, we will then be in a position to start assisting clients in this regard. Remember once this amnesty period is over no professional adviser will be able to assist on ANY matters as relates to “undisclosed foreign assets”
| 6 August, 2003 | FINTAX “SILLY SEASON”
Dear Clients
We like to keep clients informed of developments and what is happening in our profession and at Fintax. For those of you who have not already realised it we are now in the middle of our HECTIC TAX SEASON and need your co-operation to ensure that we keep SARS happy, submit returns on time and complete financials . We are battling tremendously with the volume of phone calls that are being received at the moment and we really need your assistance to try and keep these to a bare minimum. We do have a policy to try and be as accessible as possible but due to the confidentiality of our work when we are consulting we are unable to take calls. It also goes without saying that we need time to draft financials, complete returns, attend seminars and keep up to date with all the new tax laws and hence will be uncontactable from time to time. Please let our staff help you when we are unavailable, if they are unable to help they will always revert back to us or leave a detailed message for us making it a lot easier to sort out your query as soon as possible.
During this hectic TAX SEASON we would really appreciate your help with the following:-
1. Try and contact us with a list of queries as opposed to phoning us every so often.
2. PLEASE DO NOT REFER BANKS directly to us for copies of your financial statements. We will not provide them without a specific instruction from you, the client, and then we will only provide e-mail copies. We will need e-mailed instructions from you with the e-mail address and person you would like us to send them to. Remember you are given a BANK copy with your financials every year.
3. Please take the time to find your copies and originals of TRUST DEEDS and CC CK documents etc when requested by someone and don’t refer them directly to us. These are kept off our premises in a secure archive and is costly to extract and copy them which is an absolute waste of money and more importantly our time. We are more than willing to assist clients when they have mislaid their copies but would appreciate it if this could be kept to a bare minimum. Remember you are always given the ORIGINAL AND a Working copy at the outset. We again will in any event never provide this info to anyone other than the client directly so referring banks to us will not work.
4. Please make sure that you keep the original of any important documentation that you send to us such as CGT Property valuations and alike because these are also kept in a secure archive and is time consuming to extract and make copies for clients down the line . ALWAYS keep your own copy of important documents.
5. When forwarding your financial information to us please do not give us information that you will need back within a short period of time such as a cash book that you may need back to do your next VAT return. Rather close off the year and start a New cash/vat book for the current year. It is very disruptive to have to return books that we are working with.
6. Please try and get us ALL the required YEAR END information TOGETHER and not in bits and pieces, we know this is not always possible but it does make the completion of your financials and tax returns a lot quicker and easier when all the information is on hand . It is also very time-consuming to ensure that each new piece of information reaches your file each time you bring in something new and to follow up outstanding information.
7. Certain of our staff will not be able to see you if you have not made a prior appointment , so PLEASE make arrangements with a specific staff member if you need to see them when popping in to our office.
8. Yes we DO NEED your LOGBOOKS for each and every car that you use for business purposes whether you are a self employed Doctor, a business person running your own business or a salaried employee in receipt of a Traveling Allowance. You can buy a LOG BOOK from CNA or you can down load ours free off our website at www.fintaxpetrust.co.ca . Without the logbook SARS will automatically DISALLOW any motor vehicle claim. If you have already submitted your info to us without a logbook we will request one from you if we need it.
9. Remember you are at liberty to phone SARS on 041- 5057500 with any general query you may have or if you need clarity on basic issues.
10. Yes we HAVE got extension for all our registered clients ( in good standing) whose Tax affairs for last year 2002 Tax year ( March 2001 to Feb 2002) have been submitted, so please do not panic regarding SARS very much published drive that TODAY is D- Day re the submission of 2003 Tax Returns. No need to phone us about this matter.
Remember this is a mass e-mail sent to ALL OUR CLIENTS and is not directed at anyone in particular but is designed to help us provide the best possible service to our clients during these busy periods and more importantly to keep you informed.
Finally we would like to thank you for your continued support and your kind co-operation.
Kind Regards
FINTAX PE TRUST
RBW11/07/2003
| 11 July, 2003 | 2003 TAX RETURNS
2003 TAX RETURNS
SARS will not be granting blanket extensions for the submission of tax returns this year , especially for salaried taxpayers (taxpayers who do not have their own businesses) and accordingly you need to get all your tax information to us as soon as possible. Visit our website on www.fintaxpetrust.co.za and click on year end guide for a reminder of the information that we will require.
FINTAX PE TRUST
RBW 8/7/2003
| 9 July, 2003 | EXCHANGE CONTROL AND ACCOMPANYING TAX AMNESTY
We refer to our various correspondence in the past with regard to the above and recent publication of the Act.
We must advise that whilst the first draft was available quite some time ago, the second draft, which was only released about 3 weeks ago, has now been accepted and is a substantial improvement on the first draft. We have already started dissecting all aspects of this amnesty but unfortunately are going to need a months or so in order to obtain input and assistance from various sectors of the professional fraternity ranging from Exchange Control to the Amnesty Unit themselves. Accordingly, any clients who are considering this amnesty or are not quite sure whether they need to apply for the amnesty or not and require any input with regard to the amnesty, we would request that you please start contacting us only towards the middle of July FOR DETAILED INPUT in this regard.
This amnesty is far reaching and while we can assist now on the basics of the amnesty such as how to apply etc and with the income tax component of the amnesty, the foreign exchange component is a different story and needs a lot of research. We have been in touch with relevant “Forex Authorized dealers” and have managed to get a copy of the Exchange Control Manual” but as this is a specialized field on its own and we need to get more clarity on this aspect of the amnesty.
In the meantime we must, however, remind you that one of the conditions of the amnesty is that your 2003 returns have to be 100% accurate and be completed at the same time when the amnesty is applied for. This means that you need to get cracking with regard to your 2003 financial statements and Tax matters and if you haven’t already submitted them to ourselves please make sure that you do so as soon as possible because if these are not completed you are unable to apply for the amnesty. Remember you have until the end of NOVEMBER to apply for the amnesty so we have plenty of time.
FINTAX PE TRUST
RBW/6 June 2003
| 10 June, 2003 | NB -VAT 201 RETURNS FARMERS
All farmers who are submitting Vat Returns on a six monthly basis need to be aware of the fact that as soon as their turnover exceeds ONE Million Rand per annum they are no longer permitted to submit Vat Returns on a bi-annual i.e. every six months basis but have to submit a return on a two monthly basis. SARS have not been too forceful in following this up in the past but, we believe, they are now looking into this and accordingly we suggest that any farmer who is submitting Vat Returns twice a year and whose turnover does exceed ONE MILLION RAND per year change to two monthly Vat
FINTAX PE TRUST
RBW/10/06/2003
| 10 June, 2003 | UIF CEILING INCREASED
Did you know that the UIF ceiling has been increased from R8099 to R8836 with effect from 1 April 2003 .
Below please find GOVERNMENT NOTICE IN THIS REGARD
GOVERNMENT NOTICE
SOUTH AFRICAN REVENUE SERVICE
No. R.466 1 April 2003
DETERMINATION OF LIMIT ON AMOUNT OF REMUNERATION FOR
PURPOSES OF DETERMINATION OF CONTRIBUTION IN TERMS OF
SECTION 6 OF THE UNEMPLOYMENT INSURANCE CONTRIBUTIONS
ACT, 2002 (ACT NO. 4 OF 2002)
By virtue of the powers vested in me by section 6(2) of the Unemployment
Insurance Contributions Act, 2002 (Act No. 4 of 2002), I, Trevor Andrew
Manuel, Minister of Finance, hereby after consultation with the Minister of
Labour and the Unemployment Insurance Commissioner, determine that
section 6(1) of that Act shall, with effect from 1 April 2003, not apply to
so much of the remuneration paid or payable by an employer to an employee
during any month, as exceeds R8 836.
T A MANUEL
MINISTER OF FINANCE
| 6 May, 2003 | PROMOTION OF ACCESS TO INFORMATION ACT
We can now assist you in the preparation of this manual and lodge on your behalf with the Human Rights Commission. Our fee for a Standard / Basic Manual will be R500 + Vat. Should you require our assistance in this regard, please complete the information below and email to Denise de Lange on denise@fintaxpetrust.co.za or fax her on (041) 3743282. On receipt of your instruction and below details we will contact you for further information that we will require.
Please provide the following information :
1. The Name of the Person who will handle all matters in this regard
(usually the Owner/Partner/Member).
2. Short description of your business / profession.
3. Physical address of your business
4. Confirm your : a. Telephone number
b. Fax number
c. E-Mail address
5. Confirm the e-mail address of the Professional Body you are a member of (if any). This only applies to professional sectors : Doctors, Attorneys, Accountants etc.
FINTAX PE TRUST
| 28 March, 2003 | 2003 TAX RETURNS
As you are no doubt aware, the 2003 tax year came to an end on 28 February 2003 and we will soon be requiring all your relevant information to complete and submit your IT12/IT14 income tax returns.
To give you time to gather the relevant information we will, on your behalf, attempt to arrange for an extension for the submission of your returns to the South African Revenue Services until October 2003. However, Revenue will NOT grant our extention for your 2003 (or Past Years) tax return should your 2002 returns not have been submitted or should you have any outstanding Tax liabilities. Please note the onus for submission of returns to the South African Revenue Services still rests with you, the taxpayer. As Revenue are no longer prepared to grant extensions for indefinite periods it is of VITAL importance that as soon as you have gathered the information for the 2003 tax year, it be submitted to ourselves to enable us to finalise the 2003 income tax returns before the end of May this year.
PLEASE REMEMBER THAT EACH TRUST AND CLOSE CORPORATION IS A SEPARATE TAXPAYER AND SEPARATE RETURNS NEED TO BE SUBMITTED.
Please bear in mind that should your net taxable income exceed R 50 000 for the year a third topping up provisional payment is required before the end of September and accordingly we will require your information by no later than 20 June this year. Information submitted late could result in us being unable to finalise your financials on time.
Please visit our website and click on YEAR END GUIDE for a brief indication of the type of information we will be requiring which must serve only as a guide to assist you. Please ignore details that do not affect you.
| 11 March, 2003 | Promotion of Access to Information Act, (PAIA) 2000 -Extension Granted
Promotion of Access to Information Act, (PAIA) 2000 -Extension Granted
We refer to our recent e-mail in regard to the above Act and are glad to advise that the Minister of Justice has granted an extension for the submission of the required manuals to 31 August 2003.
This goes a long way to reduce the URGENCY in this regard. However as stated in our previous e-mail these manual need to be compiled and lodged with the relevant authorities/bodies. As previously confirmed we will be in a position to assist clients in this regard and will be forwarding a detailed e-mail/article by the end of March.
FINTAX PE TRUST
RBW/06/03/2003
| 6 March, 2003 | INDEPENDENT CONTRACTORS AND TAX DIRECTIVES
INDEPENDENT CONTRACTORS AND TAX DIRECTIVES
We refer to our reminder that contractors need re-apply for a Tax Directive from SARS based on a fixed percentage on your Contractors Income and must advise that we have been unable to assist in this regard. SARS have responded to our requests with a standard letter stating that the liability to deduct employees tax from remuneration paid lies with the person paying the remuneration (i.e. your client).
In their letter SARS state “The substance of the contractual relationship between you and your employer or client is crucial in the determination of your status as either an independent contactor or an employee. Your employer or client , being a party to the contract is in the best position to determine whether or not you are an independent contractor. It is for this reason that the liability to determine your status is on your employer or client.”
SARS end the letter with the following paragraph “ You are therefore requested to approach your employer or client for a decision in this regard.”
We understand that SARS will in certain circumstances consider issuing a fixed percentage directive provided your status as an independent contractor is confirmed by your employer or client and they are given a copy of your contract.
Accordingly we must advise that there is nothing further we can do to assist in this regard and suggest that you take this matter up with the payroll officer/accountant of your client/employer and SARS directly.
FINTAX PE TRUST
RBW/05/03/2003
| 6 March, 2003 | FOREIGN EXCHANGE AMNESTY AND ACCOMPANYING TAX TREATMENT
One of the most encouraging aspects of the recent budget was the abovementioned amnesty that was proposed.
Having had a good look at the proposals, as set out in the budget review, this is an amnesty for those who could be affected by the above, to sit up and take note of. Full details of the amnesty will be made available during March and April of this year and as soon as we are able to get a copy of the relevant legislation, we will prepare a detailed note in this regard setting out exactly what it covers and what the benefits are and how we can assist clients in applying for the relevant amnesty. One aspect that is clear is that all your taxation affairs must be correct and up to date including your 2003 tax return before applying for the amnesty. Therefore should you think that you may need apply for this amnesty start getting all your taxation affairs in order ASAP considering that all amnesty applications will need to be filed by 31 October 2003. In the meantime, we suggest you go to our website at www.fintaxpetrust.co.za click on “publications” and then again on the “2003 budget review” wherein we have set out the brief explanation currently supplied by SARS.
FINTAX PE TRUST
RBW/1 March/2003
| 6 March, 2003 | HAPPY NEW TAX YEAR
HAPPY NEW TAX YEAR
The beginning of March brings with it the beginning of another new Tax year. We live in fast changing times in the Tax Profession with another hall of new laws been announced in the recent budget, some good and some not so good. Nevertheless we all need to keep on the correct side of “Uncle Trevor” and will need to keep up to date on all these and other changes that may be made. It is therefore VERY important for clients to read all our e-mails and visit our website www.fintaxpetrust.co.za regularly to keep abreast.
Remember that your tax affairs and ensuring that you comply with the various sections of the Tax Act remains YOUR responsibility and accordingly you need to be as informed as possible.
FINTAX PE TRUST
RBW/03/03/2003
| 3 March, 2003 | 2003 BUDGET -TAX PROPOSALS IN MORE DETAIL
We have downloaded a more detailed summary of the 2003 Budget proposals relating to Taxation matters under “Publications” . Click on “publications” on your left and scroll down to Budget 2003.
| 27 February, 2003 | 2003 BUDGET SUMMARY OF TAX PROPOSALS
BRIEF SUMMARY OF TAX PROPOSALS- 2003 BUDGET
The main tax proposals in this years budget presented in parliament today are as follows:
•R13,3 billion in personal income tax relief
•Interest income exemption raised to R10 000 for taxpayers under
age 65 and R15 000 for taxpayers aged 65 and over
•Reduction in the retirement fund tax from 25 per cent to
18 per cent
•Accelerated depreciation allowances for investment in
underdeveloped designated urban areas
•A foreign exchange control amnesty and accompanying tax
treatment is introduced aimed at encouraging repatriation of
illegally held foreign assets and broadening the tax base.
•Small business turnover threshold for lower company tax rate
increased to R5 million and an additional deduction for start-up
expenses of up to R20 000
•Further extensions to the list of public benefit organisations
qualifying for tax-deductible donations
•Removal of tax on foreign dividends from offshore subsidiaries
•Removal of excise duties on computers, and inflation-related
adjustments to excise duty formula on passenger vehicles
•Increases of between 10 and 11 per cent in taxes on alcoholic
beverages and tobacco products
•Increases in the general fuel levy by an average of 4,3c on petrol
and 4c on diesel, and a 3c a litre increase in the Road Accident
Fund levy.
Several measures to limit avoidance of tax are also proposed.
FINTAX PE TRUST
3.30pm 26 February 2003
RBW/Publications
| 26 February, 2003 | PROMOTION OF ACCESS TO INFORMATION ACT
The above Act regulates the right of access to information held by ANY PRIVATE BODY and the procedures on how the information is to be requested.
A “ PRIVATE BODY” is very widely defined and covers any trade, business or profession whether it be a Natural Person, Close Corporation, Company or Trust.
Therefore if you own your own business or practice as a professional this ACT will apply to you no matter how big or small your business and you need to comply with various mandatory obligations.
In a nutshell you will need to compile a business manual listing certain prescribed information, appoint a person (i.e. yourself) to deal with this matter and publish the manual in the Government Gazette and on your website ( if you have one). In addition a copy will need to be lodged with the Human Rights Commission and in the event that you are a practicing professional with your controlling body.
This business manual must also be available for public inspection during office hours and upon request.
Strictly according to the Act you are required to comply with all these obligations BEFORE the 28 February 2003 , but contrary to media reports there is no imprisonment of up to two years in terms of the South African Human Rights Commission Act and reference to “huge fines” and “fines up to R10 million “ is speculative, as only a court of law will decide on this (extract from Press Statement issued by SA Human Rights Commission 13 February 2003). However , failure to comply to the ACT could result in a High Court Order against your business and it is a criminal offence to deny the right to access to information (i.e. your manual), thus we strongly recommend you comply with this Act and prepare the required manual .
We are currently investigating exactly what should be in this manual and what the costs are as relates to the publication in the Government Gazette and the Human Rights Commission and hope to be able to assist you in this regard shortly. At a first glance the information required does not appear to be that detailed and we are investigating avenues for our clients to comply with the Act at the lowest possible cost with the least amount of hassle.
We will follow this up with a second detailed e-mail/article shortly and would request that you wait until after that notice before you contact us should you require us to assist you in this regard.
FINTAX PE TRUST
| 20 February, 2003 | CREDIT CARD PAYMENTS / OUTSTANDING ACCOUNTS OWING TO FINTAX PE TRUST
Dear Client 11 February 2003
Due to popular demand by our clients we have now signed up with a credit card merchant and are able to receive payment of fees by way of credit card.
We would also like to take this opportunity to remind our clients that all our accounts are payable on statement date and interest will be charged on overdue accounts. We really appreciate all those clients who do settle their accounts timeously.
Being a credit card merchant we are able to receive instructions for payment of accounts over the phone and in this regard we request that you call Colleen, in our Accounts Department, who can assist you in this regard.
Yours faithfully
FINTAX PE TRUST
| 11 February, 2003 | 2ND 2003 PROVISIONAL PAYMENTS - DUE 28 FEBRUARY 2003
Letters notifying all clients of their 2nd 2003 Provisional Tax liabilities will be posted this week. Please ensure the following:
· Cheques need to be made out to South African Revenue Services and dated
28 February 2003.
· All cheques to be delivered to our office by no later than Friday 21 February 2003 in order for the necessary administration to be processed.
· Please ensure cheque details are correctly completed by yourself, as Fintax staff cannot be held responsible for any cheque errors.
· Please note that Fintax may not accept cash payments. Cash payments are to be made directly to the SARS office together with your original IRP6 form, which may be collected from our offices. The same applies for cheque payments made directly to the SARS office.
Kindly notify Fintax PE Trust if payments are made directly to SARS office, in order for us to process these payments on our system.
· Should any clients not be in agreement with our figures, please contact our office before 19 February 2003.
· SARS have indicated that they will allow a maximum of 3 months for deferred payments should you require to split your payments (Interest will be charged by SARS). Only WRITTEN REQUESTS (fax or e-mail) requesting split payments will be accepted by NO LATER THAN 19 February 2003.
NO DEFERRED REQUESTS WILL BE PROCESSED AFTER THE 19 FEBRUARY 2003
Sean’s clients to: diane@fintaxpetrust.co.za
Royden’s clients to: debbie@fintaxpetrust.co.za
Minette’s / Ursula’s clients to: denise@fintaxpetrust.co.za
| 7 February, 2003 | TAX DIRECTIVES - CONTRACTORS / COMMISSION EARNERS
Please note that all contractors / commission earners must apply for a NEW Tax Deduction Directive at the beginning of each tax year. All clients who require assistance with their directives for the 2004 tax year (ie. from 1 March 2003) must please advise us in writing or e-mail before the 24 January 2003.
Following information will be required:
NAME OF CONTRACTOR / COMMISSION EARNER
TEL NUMBER
NAME OF EMPLOYER
CONTACT NAME AT EMPLOYER
TEL NUMBER
PHYSICAL ADDRESS
POSTAL ADDRESS
COMPANY PAYE NUMBER
| 9 January, 2003 | CAPITAL GAINS TAX – BUSINESS VALUATIONS
As explained in previous correspondence on Capital Gains Tax, all persons who own their own businesses, and this includes professionals in private practice, have to have their businesses valued as at an effective date 1st October 2001. These valuations have to have been concluded by no later than 30th September 2003. The valuation of your business is of utmost importance as should you dispose of your business in the future Capital Gains Tax will be payable on the goodwill value of your business. In most instances your business will already have a considerable amount of goodwill value as at the 1st October 2001, hence the reason why it is imperative that a valuation of the business be determined.
We are in the process of finalizing all the 2002 Financial Statements which is the ideal opportunity in order to start attending to these valuations. We intend to start preparing these Valuation Reports from November this year and accordingly would appreciate it if clients wishing us to assist in this regard could please start forwarding instructions to ourselves over the next two months (please e-mail or fax confirmation that you would like us to proceed). We will start preparing these valuation reports on a first come, first serve, basis.
| 28 October, 2002 | SALE OF TRUSTS, CLOSE CORPORATION AND COMPANIES
The recent draft Tax Bill that has been released for public comment has made some significant changes to the Transfer Duty Act, specifically with regard to the sale of a share, member’s interest or beneficial interest in a company, close corporation or trust. In the past persons have avoided the payment of transfer duty, by transferring ownership of the trust, company or close corporation to the new buyer. Amendments have been proposed whereby the transactions mentioned above will, in future, be subject to transfer duty.
The proposed amendments are far reaching and it appears as though a slight change to the Trust Deed, whether it be removing or appointing additional trustees and/or beneficiaries, could trigger the liability for transfer duty should that trust own fixed property.
This is only a draft bill at this point in time but it is expected that these changes will be passed and will become effective. Accordingly any clients currently looking into the acquisition of a close corporation, company or trust in order to take ownership of fixed property, should seek assistance or advice in this regard as soon as possible.
| 21 October, 2002 | NOTIONAL INPUT TAX CLAIMED BY MOTOR DEALERS ON SECOND-HAND MOTOR VEHICLES
Motor dealers often purchase second-hand motor cars and other vehicles from private owners (non-vendors) or accept trade-in of such vehicles. Motor dealers also acquire “motor cars” as defined in section 1 of the Act from persons registered for VAT (vendors). VAT vendors (except motor dealers, motor manufacturers and car rental businesses) cannot claim input tax on “motor cars”, and may therefore not charge VAT when they sell these “motor cars”.
For VAT purposes the term “motor car” includes a motorcar, station wagon, minibus, double cab, light delivery vehicle and any other vehicle of a kind normally used on public roads, which has three or more wheels and is constructed or adapted wholly or mainly for the carriage of passengers...”.
Where a dealer buys “second-hand goods” as defined in the VAT Act from a person who is resident in South Africa,he is entitled to claim a notional input tax by applying the tax fraction (14/114) to either:
- the amount paid for the second-hand vehicle, or
-the amount given by way of a trade-in.
A motor dealer may not claim a notional input tax deduction unless he has obtained and kept the following:
• A declaration by the person selling or trading-in the motor vehicle stating whether the supply is a taxable supply for VAT purposes or not.
• The name, address and identity number of the person selling or trading-in the motor vehicle and, if the price is more than R1000, a copy of the seller’s identity document.
• The date the motor vehicle is bought or taken in as
a trade-in by the motor dealer.
• A description (including registration details, chassis and engine numbers and vehicle identification number [VIN]) of the motor vehicle.
• The amount paid for the motor vehicle or the value given as a trade-in by the motor dealer.
• Proof of the payment made by the motor dealer for the motor vehicle or proof of the reduction of the purchase price by the trade-in value relating to the trade-in.
Note: If the purchase from a vendor is a taxable supply (e.g. another motor dealer or a car-hire business),the seller must levy VAT and furnish the motor dealer with a tax invoice.
The above requirements have been in effect since
29 June 1998 but it has been found that many motor dealers are not complying with these requirements. From October 2002 SARS auditors will be visiting motor dealers to ensure compliance. Motor dealers who have not complied were given a period of 3 months commencing 1 July 2002, to obtain the necessary records. Failure to comply may result in input tax being disallowed and additional tax, penalties and interest being imposed.
Where a commercial vehicle is bought from a vendor, input tax may be claimed only on the strength of a tax invoice furnished by the vendor. The motor dealer may not issue a tax invoice on behalf of the seller. (TAKEN FROM SARS VAT NEWS)
| 7 October, 2002 | FRINGE BENEFITS AND VAT
FRINGE BENEFITS
Where a director or an employee enjoys a fringe benefit arising from employment, output tax must be declared on the fringe benefit. For motor cars. the amount that must be declared is 0,3% of the price of the motor car excluding VAT, multiplied by 14/114. Where the vehicle is not a motor car, e.g. a bakkie or motor cycle, the percentage that must be used is 0, 6 % and not 0, 3 %.
Example:
An employer provides a company car that costs
R1 14 000 including VAT to an employee. Output tax is calculated as follows:
First, calculate the price of the car excluding VAT.
R 114 000 - (R114 000 x 14/114) = R100 000.
Then calculate the amount of output tax:
0,3 % x R100 000 x 14/114 = R36,84
Please note. this amount is per month. If the vehicle is a motor cycle, bakkie or delivery vehicle, the calculation would be:
0, 6 % x R100 000 x 14/114 = R 73,68
VAT auditors have found many omissions in this regard and vendors should ensure that under-declarations are rectified.
(EXTRACT FROM SARS VAT NEWS)
| 7 October, 2002 | CIPRO AND ITS AFFECT ON COMPANY AND CLOSE CORPORATION REGISTRATIONS:
Our problems, especially that of time delays, in the past, in dealing with the Registrar of Companies office in Pretoria are hopefully something of the past with the creation of CIPRO (Companies & Intellectual Property Registration Office). CIPRO is the result of the merger of two former directorates of the Department of Trade and Industries – SACRO (South African Companies Registration Office) and SAPTO (South African Patents & Trademarks Office) with effect from the 1st March 2002, into a single efficient and customer driven business agency called CIPRO.
CIPRO is made up of a Board, a CEO and two major divisions being the Companies and Close Corporations Office and the Intellectual Property Registration Office.
The basic changes affecting persons wishing to register a close corporation or company will be that such registration will have to take place through one of CIPRO’s registered agents. Fintax is in the process of registering as such agent, and as such should be able to offer a far more efficient and expedient service in all matters relating to companies and close corporations.
The main advantage of the abovementioned changes is that all registration details will be available online on CIPRO’s official website at www.cipro.gov.za.
Instead of two copies being required in respect of CK1 and CK2 registrations, only one copy is now required. An applicant will no longer receive a stamped copy of the form confirming registration, but will now receive a certificate confirming all the registration details. The certificate could be emailed to applicants immediately on registration and the contents thereof could be verified by banks and other interested parties by simply viewing the registration details online on the CIPRO website.
A special 24-hour processing service has been introduced whereby one could have urgent matters attended to. However, the fee for such would be significantly higher than the fee for routine registrations. This special service would drastically reduce the need for the creation of shelf companies and close corporations.
Other changes introduced by CIPRO are:
· revenue stamps will no longer be required on company and close corporations forms – such stamps will be replaced by an appropriate way of collection by CIPRO from its registered agents;
· name reservations will also be capable of being done online with payment of a fee for such being levied to the registered agent;
· only one copy of CK1 and CK2 forms will be necessary. (The requirement to use specified colours on certain forms will fall away with all forms being printed out on white paper);
· all information regarding the status of document processing is available in the processing bulletin on the CIPRO website.
CIPRO has confirmed that the computer literacy amongst its staff is at a high level and that staff members have been adequately trained. Structures have also been put in place to identify where delays are occurring so that management could be made aware of such delays and have them addressed. One of CIPRO’s aims is the reduction of the loss of documents and forms submitted under the “old” system, and through its online application, to have a better control and follow-up process which is more client friendly and easily accessible. For this reason, a call center has been established to assist clients with any queries that may arise. There will be twenty call center agents who would have access to twelve back office staff, for more complex matters which may need to be queried or discussed.
More Details
Contact
ADV Linda Kennedy
Legal Dept
Fintax PE Trust
| 9 September, 2002 | Independent Contractors and Skills Development Levies
The general rule is that independent contractor’s fees are to be brought into the calculation for Skills Development levies. The reason for this is the lack of clarity at present as to the distinction between the term “employee” and “independent contractor” as set out below:
The proposed amendments to the Labour legislation give particular reference to the concept “employee”. To date, there remains considerable debate as to when an individual is an employee and when an independent contractor.
The common practice today is for employers to attempt to circumvent the employment relationship (service contract) and to place the working relationship within the realm of a contractual relationship (contract of work). The reason for this is often an attempt to avoid tax payments.
The Labour Relations Act, 1995, as amended, has nothing in its “employee” definition which clearly distinguishes an employee from an independent contractor. As the Basic Conditions of Employment Act, 1997, also contains no clear distinction between an employee and an independent contractor, our courts have adopted, and consistently apply one main test in this regard – the Dominant Impression Test. In essence, this test looks at both the form (the contract) and the substance (practical applications of the contract) of the relationship and thereby assesses the true nature of the relationship.
The legislators have however, stated that this matter should be clarified through legislation. The proposed amendments seek to create a presumption in law that all working relationships are employment relationships if one or more of the following factors are present:
- that the company exercises control over the individual in respect of the hours of work and/or the manner in which the work is to be done;
- the individual forms a part of the organization;
- the individual is economically dependent on the company;
- the company pays the individual at regular intervals;
- the individual only carries out work for one company.
The burden of discharging the presumption rests entirely on the company. Thus, the intention of the proposed amendments is to presume the working relationship is an employment relationship unless proven otherwise. Therefore, the only way in which Skills Development levies would not be payable in respect of an independent contractor, would be where none of the above factors are present in the working relationship.
These amendments will conform well with the already amended regulations to the Income Tax Act.
| 20 August, 2002 | New Application Process for Tax Clearance Certificate in Respect of Foreign Investment Allowance
Pretoria, August 04, 2002 - The South African Revenue Service (SARS) has substantially amended the process of issuing the Tax Clearance Certificates in respect of the Foreign Investment Allowance. These changes became necessary in the light of abuses that were identified in the old process.
Effective from Monday, 05 August 2002, the following important changes will be implemented:
The taxpayer must apply only at the SARS Branch Office where he/she is registered for Income Tax purposes.
The tax clearance certificate will no longer be given to taxpayers. SARS will now send the certificate directly to the Paying Bank / Authorised Dealer handling the actual transfer / investment of the funds as per the application form. The taxpayer will be notified of this fact by way of a letter.
The tax clearance certificate may be faxed directly to the Paying Bank / Authorised Dealer, and the original will thereafter be posted. The Paying Bank / Authorised Dealer may directly collect the certificate from the SARS office.
Every attempt will be made to issue the tax clearance certificate within a period of five (5) working days, unless the application has been referred to the Audit or Special Investigation Sections, whereupon it can take longer. In the latter case, the taxpayer will be notified in writing.
Effective from 05 August 2002, the following new application forms for Tax Clearance Certificate in respect of Foreign Investment Allowances will be utilised:
Application form number FIA 001 is the new application form for any lump sum amount including annualised amount in excess of R30 000, in respect of recurring premiums.
Application form number FIA 002 is the new application form for annualised amount of less than R30 000, only in respect of recurring premiums,
Form FIA 003 is the new format of the Tax Clearance Certificate in respect of Foreign Investment Allowances to be issued by SARS.
The new application forms - FIA 001 and FIA 002 - are available on the SARS website (www.sars.gov.za ) and may also be obtained from any SARS Branch Office.
ISSUED BY: The Commissioner for the South African Revenue Service
P.O. Box 402
PRETORIA
0001
4 August 2002
For inquiries, contact Fani Zulu (082 451 0457)
| 6 August, 2002 | TRANSFER OF RESIDENTIAL PROPERTIES OUT OF COMPANIES AND/OR TRUSTS
We refer to all the previous correspondence with regard to Capital Gains Tax, with specific reference to those persons whose residential properties are currently owned in trusts and/or companies. SARS has recently issued a Practice Note in this regard clearly setting out what transfers of properties will be exempt from transfer duty should an individual wish to transfer his house out of a Trust or Close Corporation into his own name.
This is just a friendly reminder to those of you who are considering the above, to firstly ensure that you will qualify for the exemption, and then secondly, that the property must be acquired by the individual before 30 September 2002 and registered in your name by 31 March 2003. In simple terms, the documentation required in order to transfer the property from the Trust’s or CC’s name onto your own name has to be concluded by the end of September 2002 (i.e. in two months’ time) and the actual transfer into your name has to be registered at the Deeds Office by the 31st March 2003.
| 6 August, 2002 | OVERSEAS INVESTMENTS NEW LEGISLATION
Income Tax: Amendment of section 78 of the Income Tax Act, 1962
The Minister of Finance proposed in his Budget Review this year that where any taxpayer does not account properly for assets outside the Republic, an amount of deemed foreign income will be subject to income tax. Therefore, failure to report foreign assets adequately will result in the inclusion in taxable income of a deemed amount of income based on the undisclosed foreign assets.
In terms of section 78 of the Income Tax Act, 1962, the Commissioner may estimate either in whole or in part the taxable income of a person where that person makes default in rendering a return or information or where the Commissioner is not satisfied with the return or information furnished by that person.
In order to give effect to the proposal of the Minister, it is proposed tht section 78 be extended to provide that where the Commissioner has reason to believe that a resident has not declared or accounted for any funds held in foreign currency or assets owned outside the Republic or where the income or capital gains from any funds in foreign currency or assets outside the Republic could be attributed to that resident in terms of section 7 or Part X of Eighth Schedule, the Commissioner must estimate the amount of foreign currency of such funds or the market value of such assets. The Commissioner may estimate the value after taking into account any information at his or her disposal which includes information relating to –
· any funds or assets transferred by that resident from the Republic;
· any amount received by or accrued to that resident from any source outside the Republic; or
· the period that has elapsed since those funds or assets were transferred, or amount was received or accrued.
This estimated amount shall be a percentage of the estimated value of those funds or assets, which shall be determined by applying the “official rate of interest” as contemplated in the Seventh Schedule to the estimated value of those funds or assets. The Commissioner may, however, estimate a higher amount of income in terms of the general provisions of section 78.
The amount so estimated in foreign currency must be translated to the currency of the Republic on the last day of the year of assessment by applying the ruling exchange rate on that date in order to determine the deemed amount of taxable income. Any amount of deemed income so estimated must be taken into account by the Commissioner in estimating the deemed amount of funds or assets owned offshore during any succeeding year in which such funds or assets are not declared or accounted for. Any such estimation shall be subject o objection and appeal.
This amendment will come into operation on 1 January 2002 and will apply in respect of any funds held in foreign currency or assets owned offshore which are not declared or accounted for in any return submitted in respect of any year of assessment ending on or after that date.
Example
The South African resident submits his 2003 tax return and discloses no foreign assets.
The Commissioner has information as his disposal that the individual has-
· transferred $100 000 or R750 000 from South African for foreign investment purposes at the end of the 2001 tax year.
· Invested $50 000 with a foreign portfolio manager while working on contract in New Your for 4 months until February 2002; and
· Changed the registration of his light aircraft from a South African to a Botswana registration in 2001 before commencing charter operations in Botswana.
The taxpayer fails to account for foreign assets after a request by the Commissioner to complete the sections of the tax return dealing with foreign assets and liabilities.
Estimated value of foreign currency
In terms of section 78(1A) the Commissioner estimates the value of foreign currency owned by the taxpayer on 28 February 2003 as follows:
· foreign investment of $100 000 increased by the official rate of interest
for the tax year 2001/2 ($100 000 x 1.13) = $113 000
· investment with foreign portfolio manager = $50 000
· the 2001 market value of the specific make of aircraft is $80 000 and had not decreased by February 2003
Estimated taxable income
In accordance with section 78(1B) the Commissioner estimates an amount of taxable income derived from the above funds and other assets
($113 000 + $50 000 + $80 000) by applying the official rate of interest of 11.5% which applied for the full 2003 tax year.
Estimated taxable income = $243 000 x 0.115
= $27 945
Translation of taxable income
The amount of taxable income estimated in foreign currency is then translated to Rand on 28 February 2003 at the ruling exchange rate of $1/R11
The amount of R307 395 is included in the taxable income of the taxpayer.
| 25 June, 2002 | TAX IMPLICATION OF OVERSEAS INVESTMENTS
In his budget speech, delivered on 23 February 2000 the Minister of Finance announced that the tax system was to be changed from one based on source to one based on residence, as from 1 January 2001.
Accordingly an individual who has a February year end will be taxed on a residence basis from 1 March 2001. (i.e. the 2002 Tax Year).
Should a South African “resident” taxpayer have invested money overseas either in his own name or that of a Trust or company in nearly all circumstances the income and Capital Gains on those investments made/funded by the South African “resident” will be subject to Tax in his hands in South Africa.
Accordingly should the above apply to you we strongly suggest you e-mail us a request for more details re your Tax obligations to ensure you do not commit an offence by not reflecting your overseas income/interests.
Remember any taxpayer who knowingly and willfully makes any false statement in his return or evades or attempts to evade taxation and any person who assists a taxpayer to do so, is liable on conviction to a fine or to imprisonment for a period not exceeding two years. The taxpayer is, in addition, liable to be assessed and charged three times the amount of the tax which has been evaded.
| 19 June, 2002 | SPECIAL TRUSTS(PHYSICAL DISABILITY)
Most of our clients are aware of the benefits of a normal trust and have been utilizing a trust either in estate planning, asset protection or whatever over the last couple of years.
However, SARS have tightened up on the taxation of trusts to the extent that trusts are now taxed at a flat rate of 40% on all their retained income with effect from the 2003 tax year. However, one aspect that has been introduced over the last couple of years is the aspect of a special trust. A special trust means a trust created solely for the benefit of a person who suffers from
(i) any mental illness as defined in Section 1 of the Mental Health Act, or
(ii) any serious physical disability, where such illness or disability incapacitates such person from earning sufficient income for the maintenance of such person or from managing his or her own financial affairs, provided that where the person for whose benefit the trust was do created dies, such trust shall be deemed not to be a special trust in respect of years of assessment any or after the date of such person’s death.
Should a trust be created for a person as referred to above, the advantage is that the special trust is taxed at the same tax tables as applies to an individual (tax rates start at 18% and escalate up to 40 % on incomes above R 240 000). Accordingly, a special trust could enjoy substantial tax saving opportunities. Only 25% of any capital gain of a special trust will be included as taxable income in a special trust’s hands as opposed to 50% in a normal trust. Accordingly, should you have a family member who falls into any one of the definitions referred to above, it is imperative that you contact us in order that we may determine whether the formation of a special trust could have significant benefits for you and your family.
| 10 June, 2002 | WORKMEN’S COMPENSATION
This is just a reminder that all persons who employ one or more employees in connection with their business or farming activities are required to register and pay annual assessments to the Compensation Fund. These amounts may not be reimbursed from employees. A separate registration is necessary for each separate branch of a business unless an arrangement for a combined registration has been made.
For any information that you may require with regard to the Compensation Fund you may visit their website at www.wcomp.gov.za or contact them on telephone 0123-199111.
| 10 June, 2002 | RESIDENCY BASE TAX & CGT 2002 TAX RETURNS
INCOME TAX RETURNS AND FINANCIAL STATEMENTS
All clients should by now have received notification from ourselves that the 2002 tax year came to an end on 28 February 2002 and hopefully forwarded all relevant information to us. You will recall that we included a Schedule of Assets & Liabilities that we requested you complete, which is VERY IMPORTANT.
The reason for this e-mail is to give you some background as to why the assets and liabilities is important, as well as to give you some background on the new Residency Base Taxation. As you probably gathered by now, SARS are palming off the responsibility for the collection of taxes from themselves to the individual taxpayers bringing in new sophisticated tax law enabling them to penalize and take legal action against taxpayers who are not fully familiar with the taxation legislation or do not disclose all their specific information to Revenue on an annual basis in their tax returns.
Accordingly, it is imperative that the information you provided to us in order to assist with the completion and submission of your relevant income tax return is as COMPREHENSIVE and ACCURATE as possible. This will ensure that all the correct information and disclosure of income is made to Revenue and ensure that SARS do not have the ability to go back to past history due to the non disclosure of certain information.
CAPITAL GAINS TAX
With the recent introduction of capital gains tax , the recording of certain costs and expenses as relates to capital assets is now of utmost importance due to the fact that should you not carefully record all the capital expenses relating to your capital assets, when you dispose of those assets in the future you will end up paying unnecessary capital gains tax i.e. your capital gain will be unrealistically inflated.
It is now not only imperative that all information as relates to your income and expenditure is provided, but also full details of all capital assets acquired and/or investments made. Remember capital gains tax does not only apply to fixed property. It also applies to all investments such as unit trust , share acquisitions, fixed properties, equity funds both locally and off shore, time share and any other capital assets that previously did not form part of the income tax regime. Therefore, every time you increase your contributions towards any of the abovementioned assets, it is imperative that we are aware of that so that we can increase the cost of that investment . For example, should you acquire R 100 000 worth of unit trust on a once off payment and we pick this up but you continue to make contributions on a monthly basis via some private account or even in the form of cash and you do not notify us, that investment asset which could have an actual cost to you after five years of R 150 000 would still be reflected in your books at R 100 000 thereby rendering a R 50 000 increase in capital gain when the asset is ultimately sold.
With this in mind, it is imperative that your bookkeepers are fully au fait with this situation and that they clearly indicate all expenses incurred by yourself or your business via whatever account or in whatever form in order that it can be either allocated to an income tax expense deduction, a capital asset or a consumption drawing. It is also imperative that any payments towards a unit trust fund that may go off your personal account where the actual unit trust investment is the name of the trust, is clearly distinguishable and details are provided to us so that the relevant adjustments can be made to the trust’s financial statements increasing the investment via a loan account from the individual.
RESIDENCY BASE TAXATION
With effect from 1 March 2001 the Residency Base taxation came into effect in South Africa making taxpayers liable to tax on their world wide income. Accordingly, all income generated overseas on behalf of any resident taxpayer needs to be disclosed, whether that income is actually remitted into South Africa or not. This applies to any investments that may be in the name of an overseas trust where the trust was funded by a South African resident. So, for example, should you have invested R500000 overseas, loaned it to an overseas trust who, in its name, made an investment in a bank then the interest that the trust earns would be deemed to be taxable in your hands due to the fact that it was your funds that were loaned to the off shore trust.
Accordingly, it is imperative that we are advised of all international investments and that you contact the various brokers/investment advisers that may have assisted you in this regard in order to obtain as much information with regard to income generated from those investments in order that they may be disclosed properly on your relevant income tax returns.
| 10 June, 2002 | Small Business Entity/Corporation
Should you trade via a Close Corporation or Company (not a Trust) and should your turnover fall below R3 million a year you could fall into the definition of a SBE and enjoy the benefit of the first R150 000 of your taxable income being taxed at only 15%. Additional wear and tear write offs can also be enjoyed. To determine whether your CC falls into this category please visit our website at www.fintaxpetrust.co.za click on “Publications” and then “Small Business Entity Definition” or give us a call .
| 19 March, 2002 | BASIC GUIDE TO THE OPERATION/FORMALITIES OF YOUR CC/TRUST
Please click on PUBLICATIONS for a guide on the formalities that you need to be aware of should you be trading via a CC or a Trust.
| 15 March, 2002 | SKILLS DEVELOPMENT LEVY - MEMBERS OF CCs
Most companies employing staff should be registered for this new Skills Development Levy and should have been paying it over on a monthly basis. In the past there was an exemption that remuneration earned by directors of companies and members of close corporations were not subject to this Skills Development levy. However, with effect from 1 March 2002 as a result of the amendment to the 4th Schedule of the Income Tax Act making remuneration paid to directors of companies and members of close corporations being subject to employers tax, their remuneration will also be subject to the Skills Development levy and it is imperative that all clients with effect from the end of March 2002, pay over a Skills Development levy on the remuneration earned by members and directors.
| 15 March, 2002 | VAT 201 RETURNS
Please be advised that it is imperative that all Vat registered clients who complete Vat 201 Returns on a bi-monthly or monthly basis keep copies of the actual returns that are completed and submitted to Revenue, as we require these at the end of every financial year. In the past we have been successful in getting copies of these from Revenue where clients have not made copies, but it appears as though Revenue have taken the decision of not providing this information in the future. This makes Vat Recons basically impossible making it very difficult for us to advise whether your turnover, per income statement, reconciles with the Vat 201 Return submitted.
| 13 March, 2002 | DEPRECIATION WRITE-OFF
As per our Budget 2002 Tax Summary, those that have read it will have noted that the depreciation write-off for goods under R 1 000 has been increased to R 2 000 with effect from 1 March 2002. What this, means is that any capital item purchased that costs R 2 000 or less can be written off in full in the year that it is acquired and does not have to be capitalized and written off over five years.
Accordingly, it is imperative that when acquiring capital assets under R 2 000 that these be acquired one at a time. In other words do not acquire two or three items and pay for them by one cheque because your accountant and/or bookkeeper would then capitalize this item and write-off over five years when, in fact, it is made up of a couple of items under R 2 000. Therefore, when a couple of items under R 2 000 are acquired together and paid for under one cheque that your bookkeeper clearly allocates each acquisition separately and not as one joint acquisition.
| 8 March, 2002 | MEMBERS / DIRECTORS / TRUST FEES NOW FALL INTO PAYE NET
MEMBERS / DIRECTORS / TRUST FEES NOW FALL INTO PAYE NET
The national Assembly has unanimously approved draft legislation to bring the taxation of Members/Directors/Trustees in line with that of employees.
The bill provides that Members of Close Corporations and Directors of Private Companies will become subject to pay-as-you-earn PAYE) on their monthly salaries/drawings and other remuneration (This will also effect Trustees of Trusts).
In the past only provisional tax was paid every six months and will have a major cash flow effect for these persons. This amendment will come into effect from the 1 March 2000 (i.e. first PAYE payment will be 31 March 2002). These persons will have to remain as Provisional Taxpayers making an adjustment for the PAYE paid during the period.
Accordingly all clients who will be affected by the above and who need assistance with the above please contact the partner handling your affairs by e-mailing them at their address below by no later than the 12th March 2002.
Please note this does not affect persons who practice / trade in their own names (i.e.: self employed doctors).
E-Mail Addresses:
Royden Whitfield : royden@fintaxpetrust.co.za
Sean McQuaide : sean@fintaxpetrust.co.za
Minette Nesbit : minette@fintaxpetrust.co.za
| 1 March, 2002 | Happy New "Tax" Year
2002 REQUIREMENTS
IMPORTANT NOTE : READ CAREFULLY
Dear Client 1 March 2002
RE: 2002 TAX RETURNS
As you are no doubt aware, the 2002 tax year came to an end on 29 February 2002 and we will soon be requiring all your relevant information to complete and submit your IT12/IT14 income tax returns.
To give you time to gather the relevant information we will, on your behalf, attempt to arrange for an extension for the submission of your returns to the South African Revenue Services until October 2002. However, Revenue will NOT grant our extention for your 2002 (or Past Years) tax return should your 2001 returns not have been submitted or should you have any outstanding Tax liabilities. Please note the onus for submission of returns to the South African Revenue Services still rests with you, the taxpayer. As Revenue are no longer prepared to grant extensions for indefinite periods it is of VITAL importance that as soon as you have gathered the information for the 2001 tax year, it be submitted to ourselves to enable us to finalise the 2002 income tax returns before the end of May this year.
PLEASE REMEMBER THAT EACH TRUST AND CLOSE CORPORATION IS A SEPARATE TAXPAYER AND SEPARATE RETURNS NEED TO BE SUBMITTED.
Please bear in mind that should your net taxable income exceed R 50 000 for the year a third topping up provisional payment is required before the end of September and accordingly we will require your information by no later than 20 June this year. Information submitted late could result in us being unable to finalise your financials on time.
For a Guide on the type of information we will be requiring please click on YEAR END GUIDE
| 1 March, 2002 | Budget Tax Proposals Summary
BUDGET TAX PROPOSALS SUMMARY
Minister Manuel delivered his budget yesterday, which had both good and bad news. It seems as if the good news again outweighed the bad, especially if one considers that there were NO NEW TAXES introduced this year. After having to digest a barrage of new taxes (Personal Services Entities, CGT, Non-Residents tax. etc) over the last few years this comes as a welcome relief.
What follows is a summary of the tax proposals, which I think you would find interesting:
1. The income tax threshold has been increased from R23000 to R27000, effectively meaning people earning R27000 or less a year pay no tax.
2. The maximum marginal tax rate has been decreased from 42% to 40%.
3. There has been significant personal income tax rate bracket adjustments, for example a person earning R58000 a year will now pay R980 a year less tax and a person earning R100000 a year will pay R4180 a year less tax.
4. The first R6000 of interest earned by taxpayers under 65 will now be tax-free and the first R10000 for taxpayers over 65 will be tax-free. However, only the first R1000 of overseas interest/dividends will be tax-free.
5. Certain depreciation deductions have been improved for the benefit of taxpayers and all assets costing R2000 or less can be written-off in full in the year of acquisition.
6. The tax benefits of Small Business Corporations have been extended and is an area that small business should take advantage of.
7. Slight changes to Medical expense deductions have been made.
8. Donations free of donations tax have been increased from R25000 to R30000.
9. Tax-free awards for long service and bravery have been increased from R2000 to R5000.
10. Estate Duty exemption has been increased from R1 Mill. to R1,5 Mill.
11. Slight increases in exemptions for bursaries have been made.
12. The R150 a day subsistence allowance has been scrapped.
13. Trusts will now pay a flat tax rate of 40% on all retained income (previously 32% on the first R10000 and 42% on income above R100000).
14. Salaried earners who have been allowed certain deductions in the past will find that some of these deductions will not be allowed in the future.
IN THE PIPE LINE
Certain proposals are being investigated / researched by SARS and could be introduced late in the year or in the future and includes the following:
· Reducing the compliance burden for small businesses
· Simplifying the tax forms and reducing the number of returns that must be filed
· A Vat retail method for small businesses is being investigated
· The introduction of more frequent provisional tax payments
· Additional tax penalty (Section 76) on taxpayers defaulting on submitting statements of assets and liabilities
· Review of penalty provisions and the application thereof
· Amendments to the taxation laws to include legislation in terms of substantive tax law and tax administration that prevents tax fraud, evasion and avoidance
Kind Regards
ROYDEN WHITFIELD
| 15 February, 2002 | Tax admin fee
RE : ANNUAL TAX ADMIN BILL
Our Annual Tax Admin Charge, billed in January of each year covers your ENTIRE group of active income tax entities and covers the following:
1) The completion and submission of both August & February IRP6 PROVISIONAL TAX RETURNS for the calendar year FOR ALL your active entities (ie Mr, Mrs all Trusts, CC etc).
This entails - 1. Receipting all the IRP 6 Returns
2. Obtaining duplicates if not issued or sent to another address
3. Checking the Last Taxable income and relevant calculations
4. Discussing the payment requiremts with clients if need be.
5. Sending letters notifying clients of amounts to be paid
6. Collecting the relevant payments from clients (including certain follow-ups)
7. Capturing all of the above procedures and payments on our computer system (now vital due to SARS misallocations)
8. Hand delivering the payments and returns to SARS on the due date.
2) The obtaining of an extension for the submission for the IT12 or IT14 income tax return from the South African Revenue Services until October of each year.
1. This is done for all your entities
2. Progress reports and re-submissions have to be made monthly to SARS
3) The receipting and checking of ALL YOUR IT34 Income Tax Assessments raised by SARS.
This entails - 1. Receipting of all the IT34 assessments from SARS
2. Checking to see if they are correct
3. Notifying SARS by way of a letter of any errors on the assessments
4. Requesting SARS to correct their errors
5. Notifying SARS Accounts Department to withhold collection procedures on incorrect assessments
6. Forwarding assessments to clients
7. Hand collecting refund cheques from Post Office
8. Notify client of refunds and arrange for their collection
9. Notify client of payment requirements and arrange for their cheque to be delivered to our office or forwarded to SARS
10. Hand delivery of payments and assessments to SARS on due date.
11. Reconcile SARS statement of accounts where necessary.
4) Computerised recording of all the transactions.
5) Incidental costs such as filing and storing of records and acting as registered and postal address for the South African Revenue Services.
Please direct all queries in this regard to Colleen on (041) 3743201 or e-mail her on colleen@fintaxpetrust.co.za
Yours faithfully
FINTAX PE TRUST
| 10 February, 2002 | 2nd provisional payments 2002
Letters notifying all clients of their 2ND 2002 Provisional Tax liabilities will be posted this week.
Please ensure the following:
· Cheques need to be made out to SARS and dated 28 FEBRUARY 2002.
· All cheques to be delivered to our office by no later than Friday 22nd FEBRUARY 2002 in order for the necessary administration to be processed.
· Please ensure that your cheque accompanies a copy of our provisional letter and is in a clearly marked envelope with the relevant secretary’s name.
· Should any clients not be in agreement with our figures, please contact our office before Friday 15th FEBRUARY 2002.
· SARS have indicated that they will allow a maximum of 3 months for deferred payments should you require to split your payments (Interest will be charged by SARS). Only WRITTEN REQUESTS (fax or e-mail) requesting split payments will be accepted by no later than Friday 15th FEBRUARY 2002.
· CASH PAYMENTS
Fintax PE Trust CANNOT accept cash for provisional payment(s), only cheques
will be accepted by our staff made payable to SARS.
· DIRECT PAYMENT
Clients to kindly avoid paying SARS offices directly as errors have occurred in the past where payments have been allocated incorrectly or not allocated at all. Kindly let our office have your cheque by the 22 February 2002.
Clients who choose to pay directly to the SARS office, contact our office and we will gladly fax your IRP6 form to you which must accompany your payment.
No SARS office will accept a payment without the IRP6 Form.
Also, kindly let our office have a receipt of your payment(s) as to keep our records updated.
· Please ensure cheque details are correctly completed by yourself as Fintax staff cannot be held responsible for any cheque errors.
Sean’s clients to: diane@fintaxpetrust.co.za
Royden’s clients to: debbie@fintaxpetrust.co.za
Minette & Ursula’s clients to: denise@fintaxpetrust.co.za
| 31 January, 2002 | 2002 tax directives
Please note that all contractors must apply for a NEW Tax Deduction Directive at the beginning of each tax year. All clients who require assistance with their directives for the 2003 tax years (ie. from 1 March 2002) must please advise us in writing or e-mail before
the 25 January 2002.
Following information will be required:
NAME OF CONTRACTOR
TEL NUMBER
NAME OF EMPLOYER
CONTACT NAME AT EMPLOYER
TELEPHONE NUMBER
PHYSICAL ADDRESS
POSTAL ADDRESS
COMPANY PAYE NUMBER
Kind Regards
FINTAX PE TRUST
| 18 January, 2002 | Internet & other electronic payments
SARS is currently experiencing problems with taxpayers making payments through the Internet or other electronic methods and not supplying the correct or complete reference details.
If you effect payment through electronic means, please ensure that the correct reference is supplied to credit your tax account correctly. The reference is displayed on most SARS forms that can be used for submission of a payment. Refer to the payment portion of the return for the detail to be entered.
Please ensure that the first 19 digits (reference number, tax type and period) are entered in the field “Beneficiary reference” when payment is made.
If you are unsure whether your previous electronic payments were correctly credited to your account, please phone your local Receiver of Revenue with such payment details.
| 11 January, 2002 | Fintax chat dec 2001
The December 2001 Fintax Chat has been posted under FINTAX CHAT on our website
www.fintaxpetrust.co.za
Regards
Fintax Pe Trust
| 26 November, 2001 | Vat and rental cars
Just another reminder, that should you be away on business and hire a rental car from Avis or Budget etc., even though the company will be charging you Vat on the renal of that car, you will not be entitled to an input Vat claim on the expense of hiring the motor vehicle. Also do not forget that you CANNOT claim input Vat on local entertainment and office refreshment expenses.
| 20 November, 2001 | Skills development levy
We are all a little unhappy about the 1% payroll deducted for a training levy but one can ensure one gets back more than you pay in and enhance staff skills in the process by:
1. Appoint a skills development facilitator to draw up a plan. This is compulsory and entitles you to 15% of what you pay in.
2. At the end of the first year, report on the implementation of your plan. This will entitle you to a refund of a further 50% (to be cut to 45% next year).
3. An employer can apply for two Seta allowances for an apprenticeship programme – one for the implementation and one to subsidise remuneration of apprentices, provided they were unemployed prior to the apprenticeship.
4. An employer can also claim for costs incurred to implement a skills programme.
5. Various other allowances can be applied, to total over 35% of your payment. Altogether, you can get back more than 100%.
For more details contact your Sector Education and Training Authority (SETA). Visit our website and click on “publications” and then on “SETA Contacts” for details of the various SETA’s and the respective phone numbers
| 16 November, 2001 | Defaulting taxpayers
Most clients who read the paper have probably become aware of SARS new action of taking criminal proceedings against defaulting taxpayers. SARS did indicate quite sometime ago, that they were going to be moving towards this approach and it appears now that this was no idle threat. Accordingly, we cannot stress enough that you make sure that you keep on the right side of the taxman in that all matters are declared and reflected properly but also that your relevant returns are also SUBMITTED TIMEOUSLY. It is interesting to note that SARS has taken criminal action against taxpayers where their returns have merely been outstanding.
| 15 November, 2001 | Vehicle logbooks - very important
We have on numerous occasions expressed the importance for clients, who are either in receipt of a car allowance or run their own businesses, to keep a logbook clearly indicating that portion of the kilometers traveled for the year that represents business and the portion that represents private. SARS have made it quite clear that they intend to peruse these log books closely. Should you not have kept an accurate logbook this could have disastrous effects with regard to the private portion add-back on motor vehicle expenses. In order to assist clients, we have prepared an example of the logbook required on our website which can be accessed at www.fintaxpetrust.co.za, click on the button on the left that indicates logbook and you will be able to download the example should you have the excel programme.
| 7 November, 2001 | Competitions act - the amended law in a nut shell
LAST year’s Competition Second Amendment Act resulted in changes in four main areas:
· The jurisdiction of the Competition Act;
· The definition of a merger;
· Threshold levels and fee structures; and
· Procedures for lodging complaints or applications of exemption.
Some companies had tried to circumvent competition law by invoking sector-specific public regulations. The amendment has clarified this issue by granting the competition authorities jurisdiction over all industries. As a result, situations will arise where both the competition authorities and the sector regulators will have to be consulted – and the commission is currently negotiating agreements to clarify the manner in which their con-current jurisdiction will operate.
The most important amendment is likely to be the reduction in thresholds and lower fee structure. Here, considerable relief is offered by the amendment. The thresholds for compulsory notification have been pegged substantially higher. Whereas it was previously set at a level of R50m for the combined assets or turnover of the acquiring and target company, or R5m for the target company’s assets or turnover taken on their own, the amendment sets the new threshold for the intermediate mergers at combined assets or turnover of R200m and R30m in the case of turnover or asset value of the target firm alone.
The threshold for large mergers remains the same; however, small mergers below R200m don’t have to be notified.
In addition, the fees for intermediate mergers have been reduced from R125 000 to R75 000 and that for large mergers reduced from R500 000 to R250 000. Small mergers, even if voluntarily notified, pay no fee.
The result of these changes and the clarification in the definition of a merger is that there’s certainty as to what mergers must be notified and the workload of the commission is consequently reduced to the point where it can do its major job of zeroing in on deals that ought to be prohibited.
This will certainly improve response times on notifications.
| 1 November, 2001 | Financial intellegence centre bill (anti-money laundering legislation)
Criminals and would-be terrorists who launder up to R8 billion a year through South Africa were put on notice that they faced one of the toughest detection systems in the world when the national assembly passed the Financial Intelligence Centre Bill in October.
Trevor Manual, the finance minister, warned this legislation would place extra obligations on banks, life assurance companies, foreign exchange dealers, casinos, estate agents and even Krugerrand and vehicle salesmen. They would have to get to know their clients, record suspicious transactions and report them to the new Financial Intelligence Centre (FIC).
Those who practiced money laundering or failed to report cases of if faced imprisonment of up to 15 years or a fine of up to R10 Million, “sending out a very clear message that we are serious about implementing an anti-money laundering regime in this country” , Manual said.
Based on international experience and thoroughly vetted by the finance and justice committees to prevent loopholes, the bill was “amongst the most comprehensive anti-money laundering legislation anywhere in the world and has given South Africa the means to combat all manner of money laundering activity”.
Manual said money laundering not only means processing money for criminal and other activities through the system so that it could not be traced, but also involved tax evasion.
| 1 November, 2001 | Outstanding tax returns 2001 tax year - important notice
Please note that extensions for the submission of Tax Returns for the year ended 28 February 2001 will terminate shortly. Revenue will then be issuing final demands and fines of up to R4000 for late returns for these years. If you have not already submitted your 2001 information to us, we strongly suggest you get your details to us as soon as possible to avoid the abovementioned fines. If your return is Dormant, please send us a fax/letter/e-mail to this effect so we can submit the Return immediately. For those active entities, please visit our website at www.fintaxpetrust.co.za, click on Year End Guide for a list of information we require for active entities.
| 16 October, 2001 | Capital gains tax - guide
As you are all aware Capital Gains Tax (CGT) was introduced on 1 October 2001. This is a very complex form of taxation and will affect most people. We have a 32 Page pocket size Guide on CGT which covers most of the important aspects of this tax which can be purchased for R30.00 by contacting Charmaine on (041) 3743201.
| 16 October, 2001 | Latest on pps share contributions
I refer to our recent e-mail we sent out advising clients that certain share contributions to PPS would, from the 2001 year, be tax deductible.
We have recently received notification from PPS that this matter has not yet been finalized between themselves and SARS and accordingly no confirmation of the tax deductible portion will be issued within the foreseeable future. Accordingly, we cannot put all affected clients financials on hold until such time as these two parties come to an agreement and have taken the decision to continue drafting and finalizing all financials affected by the above in the meantime.
The various financials and tax computations will, accordingly, be calculated without deducting the above and when these two parties have come to an agreement and the certificates are issued, we will then forward the certificates to SARS under a separate letter requesting that they be taken into account. We must stress that the above is probably the most prudent route to follow and confirm that should these amounts be deductible you will still get the full deduction with regard to your taxable income albeit that it may be by way of a separate letter instead of calculated on your financial statements.
Yours faithfully
FINTAX PE TRUST
| 22 August, 2001 | 1st provisional payments 2002
Letters notifying all clients of their 1st 2002 Provisional Tax liabilities will be posted this week.
Please ensure the following:
· Cheques need to be made out to SARS and dated 31 August 2001.
· All cheques to be delivered to our office by no later than Monday 20th August 2001 in order for the necessary administration to be processed.
· Should any clients not be in agreement with our figures, please contact our office before Monday 20th August 2001.
· SARS have indicated that they will allow a maximum of 3 months for deferred payments should you require to split your payments (Interest will be charged by SARS). Only WRITTEN REQUESTS (fax or e-mail) requesting split payments will be accepted by no later than Monday 20th August 2001.
· Please ensure cheque details are correctly completed by yourself as Fintax staff cannot be held responsible for any cheque errors (below see New Cheque Ruling).
Sean’s clients to: diane@fintaxpetrust.co.za
Royden’s clients to: debbie@fintaxpetrust.co.za
Minette’s clients to: denise@fintaxpetrust.co.za
KINDLY NOTE THE NEW CHEQUE RULING
From 1 August 2001, ALL South African banks will no longer accept or process cheques which have been ALTERED IN ANY WAY or which carry any form of bank stamp, such as cheques that have PREVIOUSLY BEEN RETURNED UNPAID.
This ruling applied to cheques which have been legitimately altered and the changes signed by the account holder. In addition, cheques which are damaged in any way (such as those which have been torn or marked by coffee spills) will not be accepted.
The decision not to accept cheque alterations is an anti-fraud measure.
REGARDS
FINTAX PE TRUST
| 25 July, 2001 | 2000 tax returns (ie last year)
Extensions granted by the Receiver of Revenue for the submission of tax returns for the year ended 28 February 2000 ran out recently. Fines of up to R4000 can now be imposed by the Receiver of Revenue on returns submitted late. Accordingly all clients who have still not submitted their information to us for the tax year ended 28 February 2000 (1/3/99 – 28/2/2000) had better do so ASAP to avoid LEGAL ACTION by SARS.
FINTAX PE TRUST
| 18 July, 2001 | 2000 tax returns (ie last year)
Extensions granted by the Receiver of Revenue for the submission of tax returns for the year ended 28 February 2000 ran out recently. Fines of up to R4000 can now be imposed by the Receiver of Revenue on returns submitted late. Accordingly all clients who have still not submitted their information to us for the tax year ended 28 February 2000 (1/3/99 – 28/2/2000) had better do so ASAP to avoid LEGAL ACTION by SARS.
FINTAX PE TRUST
| 18 July, 2001 | Members / directors / trustees fall into paye net
The national Assembly has unanimously approved draft legislation to bring the taxation of Members/Directors in line with that of employees.
The bill provides that Members of Close Corporations and Directors of Private Companies will become subject to pay-as-you-earn (PAYE) on their monthly salaries and other remuneration (This will also effect Trustees of Trusts).
In the past only provisional tax was paid every six months and will have a major cash flow effect for these persons. This ammendment will come into effect from the 1 March 2002.These persons will have to remain as Provisional Taxpayers making an adjustment for the PAYE paid during the period.
| 18 July, 2001 | Pps contributions
A recent ruling from the South African Revenue Services (SARS) confirmed that the risk portion of PPS premiums attributable to sickness, permanent and partial incapacity benefits would be tax deductible. The ruling will be in respect of fiscal years commencing on 1 March 2000. PPS have indicated that tax certificates will be mailed to members in the middle of July 2001.
PLEASE FORWARD CERTIFICATES TO US ON RECEIPT.
| 5 July, 2001 | Diesel refunds
The diesel refund system, as announced by the Minister of Finance in his budget speech, comes into effect on 4 July 2001 for primary production in the Fishing, Farming, Forestry, Coastal Shipping and Mining Industries. Rail operators carrying goods are also given a limited concession. To avoid the costs of setting up a new system (Diesel Refund) and to minimize the administrative cost for qualifying diesel users, it has been decided to adjust the existing VAT system to administer these concessions.
WHO CAN QUALIFY FOR A DIESEL REFUND?
Any enterprise engaged in the following activities, i.e.
· Farming
· Mining
· Forestry
· Coastal Shipping
· Commercial Fishing
· Offshore Mining
· NSRI and
· Rail,
And who qualifies to be registered for VAT. Enterprises with a turnover of at least R20 000 per annum will qualify if diesel is used in the primary production process. Diesel that is used for other activities (transport, harvesting, construction, etc.) for reward may not be claimed.
REGISTERING FOR THE DIESEL REFUND SYSTEM
Vendors who qualify to claim a diesel refund must register at the Receiver of Revenue. New vendors must register for VAT (VAT101 – Application for Registration) and for the Diesel Refund (VAT101D – Application for Registration). Existing vendors need only register for the diesel refund by completing a VAT 101D form. Please contact the local Receiver of Revenue for details on the requirements for VAT and Diesel registrations.
Vendors not qualifying for diesel refunds or who neglect to register for diesel refunds will not be entitled to a refund. Vendors who qualify for diesel refunds must submit a claim by means of a VAT201 form. The existing VAT201 return will be adjusted to provide therefore.
| 13 June, 2001 | New cheque ruling
From 1 August 2001, ALL South African banks will no longer accept or process cheques which have been ALTERED IN ANY WAY or which carry any form of bank stamp, such as cheques that have PREVIOUSLY BEEN RETURNED UNPAID.
This ruling applied to cheques which have been legitimately altered and the changes signed by the account holder. In addition, cheques which are damaged in any way (such as those which have been torn or marked by coffee spills) will not be accepted.
The decision not to accept cheque alterations is an anti-fraud measure.
| 13 June, 2001 | Independent contractors - act now
For those independent contractors still trading via the medium of a Trust or Close Corporation, I have set out a few points resulting from SARS latest approach to your structures and request you visit our website at www.fintaxpetrust.co.za and click on “Publications” and then “Personal Service Entities – Act Now””.
| 19 March, 2001 | Capital gains tax
The latest draft legislation on Capital Gains Tax was released last week and SARS have stood firm with their intention of introducing Capital Gains Tax with effect from October 1 this year.
A second draft legislation was made available by SARS and all interested parties have until 12 March in order to comment on the updated draft. SARS have indicated that they aim to have final legislation ready by the beginning of next month i.e. 1 April (end of April is probably more realistic).
There have been some important changes in the second draft from the first and a range of technical modifications. Essentially SARS have not budged on many of the issues that sparked a host of protests from business at the various hearings in Parliament.
One issue that seems clear is that any capital gains enjoyed by a trust will be able to be distributed down to the beneficiaries which obviously has certain advantages with regard to the inclusion rate of natural persons as opposed to the inclusion rate of a trust. What this means is that contrary to what was initially believed it’s not going to be necessary for individuals to rush out and transfer capital growth assets off their trusts back onto their names as one will be able to retain the asset in the trust, enjoy all the protection and benefits of the trust and then make the distribution of the capital gain, if and when the asset is actually sold, back to the individual should one feel it necessary.
However, it is clear that one still has to identify all growth assets and have these assets valued within the next two years.
As promised in previous notices, we will be holding workshops and/or providing information with regard to Capital Gains Tax as soon as the final draft has been made available in April. We, therefore, envisage that our first workshops will be in mid- June of this year. In the meantime we suggest that clients can start making a list of their various assets and how they are owned.
| 14 March, 2001 | Budget speech in a "nutshell"
Capital Gains Tax postponed six months to 1 October 2001 *
Tax cuts for low and middle-income earners (a worker earning less than R23 000 will pay no income tax, and one earning R70 000 will pay 12% less) *
Estate duty and donations tax cut to 20% *
Interest and dividend income exemption raised from R3000 to R4000 for taxpayers
under 65 and R5000 for taxpayers over 65 years *
Provisional tax threshold for non-employment income increased from R1000 to R2000 for individuals under 65 and individuals over 65 are exempt from the payment of Provisional tax if their income is below R80 000 per annum *
VAT zero-rating on paraffin *
Long-awaited diesel rebate for farmers *
Assets swap mechanism, which allows institutions to invest in foreign portfolios, abolished *
Incentives for companies to hire new workers, offer them “learnerships”, and embark on industrial projects that will boost jobs *
An increase in the skills levy from half to one percent of payroll *
Moves to close tax loopholes, including the possibility of bringing all members of CC’s and company directors into the pay-as-you-earn system *
Investment incentives for small business enterprises (SME) introduced *
The above is a brief overview of the Tax aspects of the budget, for a copy of the entire budget and relevant schedule, please visit our website at www.fintaxpetrust.co.za click on “LINKS” button and then on SARS.
| 22 February, 2001 | 2nd 2001 provisional payments
Letters notifying all clients of their 2nd 2001 Provisional Tax liabilities were posted on Wednesday 31 January 2001. Please ensure the following:
Cheques need to be made out to SARS and dated 28 February 2001.
All cheques to be delivered to our office no later than Friday 23 February 2001.
Should any clients not be in agreement with our figures, please contact our office before the 16 February 2001.
SARS have indicated that they will allow a maximum of 3 months for deferred payments should you require to split your payments (Interest will be charged by SARS). Kindly fax/e-mail our office a written request for split payments by no later than 16 February 2001.
FINTAX PE TRUST
| 5 February, 2001 | Feb 2000 outstanding tax returns
Extensions granted by the Receiver of Revenue for the submission of tax returns for the year ended 28 February 2000 runs out on 28 February 2001. Fines of up to R4000 can now be imposed by the Receiver of Revenue on returns submitted late. Accordingly all clients who have still not submitted their information to us for the tax year ended 28 February 2000 (1/3/99 – 28/2/2000) had better do so before Monday, 12th February 2001 to avoid the abovementioned penalties.
FINTAX PE TRUST
| 5 February, 2001 | 2002 tax directive
Please note that all contractors must apply for a NEW Tax Deduction Directive at the beginning of each tax year. All clients who require assistance with their directives for the 2002 tax years (ie. from 1 March 2001) must please advise us in writing or e-mail before 15th February 2001.
FINTAX PE TRUST
| 5 February, 2001 | Capital gains tax - first draft
Our brief comments on the first draft of the Capital Gains Tax Legislation can now be accessed by clicking on the “Publications” button on your left.
| 20 December, 2000 | Capital gains tax legislation release
The long awaited Draft Capital Gains Tax Legislation was released by SARS yesterday.
The Public has been given until 10 January to comment and it seems that SARS are on track for the proposed implementation date of 1 April next year (2001).
Accordingly we will be studying the Act in detail and hope to post comments under “Publications” on our Website, on any amendments from the initial draft, before we close office on the 20 December.
Workshops will run from late February. Details of which will be forwarded to clients in mid-January next year.
| 13 December, 2000 | New vat category
In recent changes to tax legislation a new category E has been introduced which allows for a Vat period of 12 months ending on the last date of the tax year. It could end on any other date if written approval is obtained from SARS. The new category E would apply where there are inter company/inter group charges, that can only be determined some months after the year end.
In order to qualify under category E the following requirements must be met.
1. The Vat vendor must be a Trust, CC or Company.
2. The vendor must apply in writing to SARS to be placed in category E.
3. Written approval must be obtained from SARS.
4. Vat invoices must be issued only once per year and the payment for the service must, by agreement between the parties, only become due once a year at the end of the tax year.
5. The recipient of the service must be always Vat vendors and entitled to full input tax deductions i.e. they must not be partially exempt.
6. The enterprise must consist solely of one or more of the activities of letting of property, renting of immovable goods, administration or management services and their services must be provided to a related person in relation to the vendor.
The above obviously assists tremendously with clients who have an administrative trust or a property trust from which they operate their business and accordingly any clients wishing to find out more details of the above, please contact us in order that we can assist with the application to convert to category E with SARS.
| 8 December, 2000 | Fintax chat - december 2000
The December edition of Fintax Chat which will only be printed at the end of November can be accessed now by clicking on the relevant button on our Website at: www.fintaxpetrust.co.za
Regards
FINTAX PE TRUST
| 16 November, 2000 | Capital gains tax - up-date
We believe that SA Revenue Services (SARS) hopes to distribute the first draft of the proposed Capital Gains Legislation, which comes into effect from 1 April 2001, for comment by the end of November.
It is likely that there would be several drafts and wide consultations. It appears as if the six month period to have properties valued could be extended.
Should a draft be available by the end of November, we will aim to start workshops in February next year. Our comments on the draft will be posted on our website within 2 weeks after its publication.
Regards
FINTAX PE TRUST
| 9 November, 2000 | Matrimonial regimes in south africa
The following publication has been posted on our website under “publications” which includes:
1. MARRIAGE IN COMMUNITY OF PROPERTY :
2. MARRIAGE OUT OF COMMUNITY OF PROPERTY EXCLUDING ACCRUAL :
3. MARRIAGE OUT OF COMMUNITY OF PROPERTY WITH ACCRUAL :
| 29 September, 2000 | 3rd top-up payments
Please note that all 2000 Top-Up Payments need to be made by the end of September 2000 to avoid SARS been able to raise interest on outstanding taxes on income over R50 000.
FINTAX PE TRUST
| 15 September, 2000 | Capital gains tax - update
According to SAICA – the South African Revenue Service are busy preparing a working document on the proposed introduction of Capital Gains Tax for submission to the Minister of Finance. After he has ruled on matters of policy, a further document will be drafted and released for public comment. SARS anticipates that draft legislation will be available to the public by February 2001 – Yet another delay !!!!!
FINTAX PE TRUST
| 15 September, 2000 | Personal service trusts / cc - news flash
We have just returned from a meeting with Senior Personnel at SARS where certain issues were clarified regarding Personal Service Trusts / CC.
The most important aspect to come out of the meeting was their CONFIRMATION that the amendments will only come into effect for taxpayers ie Trusts/CC from 1 March 2001. (Provided the Trust has a February year-end and was in existence before 1 April 2000).
Basically this means that nothing changes for the current year (1/3/2000 – 28/2/2001). Therefore the urgency previously perceived due to the initial interpretation that the changes would be effective from 1 April 2000 is no longer present and the need to see clients on this issue as soon as possible via “Group” workshops is NOT NECESSARY.
We have until February next year (2001) to decide on what is best for each client, making it possible to rather consult on an individual basis with each client. Accordingly the proposed “Workshops” have been CANCELLED. In order to avoid additional costs to our clients, we will address these issues at the same appointment when we see you to sign-off your 2000 financials which will be anytime between now and February 2001. Accordingly it is NOT necessary for you to set up an appointment specifically to discuss these issues at this stage, UNLESS we have already completed and presented you with your 2000 financials.
| 8 August, 2000 | Provisional tax - august 2000
Letters notifying all clients of their 1st 2001 Provisional Tax liabilities will be posted out on Monday 31st July 2000. Please ensure that all cheques are handed into our office by no later than 22nd August 2000. Should any clients not be in agreement with our figures, please contact our office before the 10th August 2000. Should clients need to pay-off their Provisional liabilities, SARS have indicated that they will allow a maximum of 3 months.
Please fax/e-mail our office for a request for split payment should it be required.
| 24 July, 2000 | Capital gains tax
CAPITAL GAINS TAX
SARS have still not released any draft legislation in this regard and we understand that the legal department responsible for drafting this legislation is nowhere near completion.
We understand that Government are adamant that CGT will be introduced into our tax system and are still aiming for 1 April 2001 effective date. We will keep clients posted and still plan to have our workshops once SARS release draft legislation – now anticipated at the end of the year.
| 21 July, 2000 | Personal service trusts and close corporations
PERSONAL SERVICE TRUSTS AND CLOSE CORPORATIONS
We have finally obtained a copy of the Taxation Laws Amendment Bill which attends to the amendments with regard to Personal Services Trusts and Close Corporations. We understand that this has still not been tabled in Parliament. The effect of the legislation can be found by clicking on our Publications button on the left.
| 21 July, 2000 | Contractors - employment companies & trusts
We refer to our various notices re Employment Companies listed below and confirm tht we have just received confirmation from SARS that the definition of Employment Companies has been extended to include Trusts. If you are an Independent Contractor and trade via a Trust or a CC or Company, please click on the "FINTAX CHAT" button on your left to see how these amendments will affect you. We will be arranging a "Workshop" for affected clients once we have a copy of the Act which only becomes available later in June 2000. Please e-mail Colleen on colleen@fintaxpetrust.co.za with your name, contact number and e-mail address should you wish to attend this "Workshop" (to be held at the end of June 2000).
| 8 June, 2000 | Capital gains tax - (cgt)
Please note that SARS have extended the date by which comments on the proposed introduction of CAPITAL GAINS TAX must be submitted which will probably result in a further delay before the draft legislation will be made available to the public.
Accordingly, our proposed Seminars / Workshops will probably only be held in the later half of this year.
Please visit this space (IMPORTANT ANNOUNCEMENTS) on a regular basis to be kept informed with current developments.
| 12 May, 2000 | Employees tax - commission/locum fees/spotters fees
It has come to our attention on more than one occassion recently that clients have not been deducting EMPLOYEES TAX on amounts paid for LOCUM FEES / SPOTTERS FEES. Please note that amounts paid as COMMISSION / SPOTTERS FEES / LOCUM AND ASSISTANT FEES etc. are subject to EMPLOYEES TAX. Therefore should you pay any of the above, please ensure that you deduct EMPLOYEES TAX from any payments made.
| 12 May, 2000 | Skills development facilitator
In accordance with legislation regarding the skills development levies, a Skills Development Facilitator must be appointed by employers by the 15th May 2000. Such person may be appointed from within the company, or be a formally contracted external person. The Skills Development Facilitator must be registered and approved by the applicable SETA concerned in order for the employer to be able to qualify for the grant recovery scheme which enables employers to be able to recover at least 50% of their levy payments.
| 14 April, 2000 | Skills development levy
Clients interested to know more about the Skills Development Levy can click on the Publications button on your left and browse down to our Publication on the Skills Development Levy.
| 14 April, 2000 | Contractors-employment companies-chapter three
SARS have indicated that they are looking into another amendment later on in this year, which will effectively make all payments to Independent Contractors subject to Employees Tax even if you do not fall into the definition of an “Employment Company”.
Therefore all payment of fees to Independent Contractors trading via Trusts, Close Corporations or Companies or as a Sole Proprietor will be subject to Employees Tax should 80% of your income come from one source.
Please note that this change “if introduced” will only effect the deduction of Employees Tax.
| 7 April, 2000 | Contractors-employment copanies-chapter two
I refer to our article on the above with regard to employment companies and specifically our reference to the effect that it does not apply to trusts. There is a possibility that when the amendments finally come through they could change the wording to include a trust. Accordingly all contractors must be aware of the relevant points as raised in the abovementioned article.
Please note, as the wording currently stands as released by SARS, it will only apply to close corporations and companies and the local Receiver’s office has indicated that their understanding is that it will only apply to close corporations and companies.
| 7 April, 2000 | Capital gains tax
Our views / understandings of the working paper issued by SARS on the proposed Capital Gains Tax can be accessed by clicking on the Fintax Chat button on your left. As information becomes more available / clearer clients will be kept informed via this web site.
| 31 March, 2000 | Contractors - employment companies
Details of the upcoming amendments to the Income Tax Act as relates to Independent Contractors and Employment Companies can be accessed by clicking on the Fintax Chat button on your left.
| 31 March, 2000 | Happy new tax year
The 2000 / 2001 tax year has just began and we would like to take this opportunity to remind clients that we now require all your relevant information to complete – submit your Tax Returns for the tax year 1 March 1999 to 28 February 2000 (2000 Tax Year). Our office must receive this information by NOT LATER THAN
15 JUNE 2000. Information received after this date could result in us being unable to finalise your financials on time which could result in interest and / or penalties being payable by you. For a guide on the information we require click on “Year End Guide” on your left.
| 1 March, 2000 | Capital gains tax - (cgt)
Watch this space for more details on the impact of the proposed Capital Gains Tax. We will be planning Seminars / Planning Sessions for clients as soon as all available information on CGT has been studied. Details on the Seminars to be posted on this site next month.
| 1 March, 2000 | Small business corporations - (sme)
Watch this space for more details on who will or won’t qualify to be a “SME” and benefit from the lower tax rates.
| 1 March, 2000 | Personal service companies - (employment company)
Watch this space for more details on the impact of Revenue now defining and taxing Personal Service Companies (Employment Companies) differently to normal companies.
| 1 March, 2000 | Budget 2000
For our comment and a brief overveiw of the 2000 Budget please click on the
FINTAX CHAT button on your left.
| 25 February, 2000 | Fintax chat march 2000
The March edition of our Fintax Chat is now available by clicking on the
FINTAX CHAT button on your left.
| 25 February, 2000 |
|
|
|
