Archive for Africa

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 1 – 1.5)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

1.5 THEORETICAL FRAMEWORK AND HOW THE METHODOLOGIES EMPLOYED WILL ADDRESS THE RESEARCH QUESTION

The present research analyses and interprets the Constitution, together with relevant Read More

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Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 1 – 1.4)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

1.4 RESEARCH OBJECTIVES, METHODOLOGIES AND POTENTIAL FINDINGS

1.4.1 Research Objectives

The primary objective of the research done in this dissertation is to critically analyse Read More

Written by | Posted in Africa • Audit

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 1 – 1.3)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

1.3 RESEARCH QUESTIONS AND HYPOTHESIS

The aim of this dissertation is to critically evaluate SARS information gathering powers from the following two perspectives: Read More

Written by | Posted in Africa • Audit

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 1 – 1.2)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

1.2 THE CONTRIBUTION THAT THIS DISSERTATION WILL MAKE TO TAX LAW LITERATURE

Although the Constitution has been in existence for some 18 years, the rights of taxpayers Read More

Written by | Posted in Africa • Audit

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 1 – 1.1)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

1.1 THE THESIS CONTRIBUTION TO KNOWLEDGE IN TAXATION

The South African tax system has experienced significant changes within the purview of the advent of the Constitution, PAJA, and with the proposed promulgation of the Tax Read More

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Taxpayers Rights When Audited By Tax Authorities In South Africa (Abstract)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

ABSTRACT

This thesis deals with the relevant law up to 30 September 2012. This thesis analyses the inter-relationship in particular between ss 1(c), 33, 41(1), 195(1) and 237 of the Read More

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Israel/South Africa Expatriates Face Costly New Tax Rules

In terms of the Right of Aliyah doctrine (the right of every Jew to immigrate to Israel) every Jew going to or intending to go to Israel will be granted an Oleh’s visa. Oleh, for my colleagues not dealing with Israeli law (plural: olim) means a Jew immigrating into Israel. The Oleh Visa is granted by mere expression of the interest to “relocate” to Israel as a qualifying Jew (albeit born outside Israel after 1950).

A person shall not be registered as a Jew by ethnic affiliation or religion and will be denied Oleh Visa, despite being a Jew as defend, inter alia because of political status / activity (i.e. is engaged in an activity directed against the Jewish people or which is likely to endanger public health or the security of the state of Israel) or secondly, where a notification (issued under the Law of Return 5710-1950 as amended by Law of Return Read More

Written by | Posted in Africa • Europe, Middle East • Expatriate • Gift Tax • Individual • International • OECD • Specialty Tax Incentives • Tax Controversy • Tax Fraud/Evasion/Crimes • Tax Policy • Tax Provision/Tax Reporting

2014 – The South African “Tax Year” Ahead In Perspective

The first and very important note to make, in dealing with South African tax issues: tax year 2014 ends on the last day of FEBRUARY 2014. The South African tax year for most individuals, are 1 March until the last day of February in the next calendar year. Corporates can change their tax year-end to align with the last day of their financial year-end, yet Trusts partners in a JV or partnership, are obliged to file assuming a tax year-end on the last day of February, despite their financial year-end being the last day of another month.

Yes, sadly this date, Friday 28th 2014, is not even listed on the SARS webpage on important dates, yet is an extremely important tax deadline.

SARS has two webpages namely: www.sars.gov.za and www.sarsefiling.co.za. Read More

Written by | Posted in Africa • Expatriate • FATCA • FBAR • Indirect Tax • International • Tax Provision/Tax Reporting • Tax Risk Management • VAT

Australian Tax Office increases pressure on South African émigré – Asks SA Revenue Service to ‘freeze’ his assets

TaxConnections Picture - South African MoneyIn a footnote to it’s recent A$21 million tax claim against businessman Mark Krok (see my earlier blog “South African Emigre’s Offshore Tax Plan Falls Foul of Australian Tax Office’s Aggressive Audit Approach“, the ATO has reportedly seized A$2.85 million from his accounts with Australia’s St George Bank.

Furthermore, it has requested that SARS freeze his shares in South African companies as well as his A$4 million house.

The request to SARS appears to have been made under Article 25A of South Africa’s double tax treaty with Australia which was updated by a Protocol in 2008. This Article provides for SARS to collect the Australian tax as if it was a South African revenue debt.

It should be noted that the Australian tax debt is disputed by Mr. Krok and his legal appeals against the underlying assessments are yet to be heard by the Australian Federal Court.

Written by | Posted in Africa • Australia/Oceania

South African Emigre’s Offshore Tax Plan Falls Foul of Australian Tax Office’s Aggressive Audit Approach

TaxConnections Picture - South African MoneyThe Australian Tax Office (“ATO”) appears to be aggressively opposing a South African emigre’s appeal against his A$21 million income tax assessments. The case of Mark Krok v Commissioner of Taxation NSD572/2013 is listed for a Directions Hearing on 7 November in Australia’s Federal Court.

A report by Susannah Moran in today’s Australian newspaper – see http://www.theaustralian.com.au/business/ato-sets-sights-on-s-african-millions/story-e6frg8zx-1226750019299 – says that “The ATO has accused Mr. Krok of tax evasion and fraud, claiming he understated his income and failed to declare capital gains made on share sales during the six years he lived in Australia.”

It is suggested that in a 5-day hiatus between leaving South Africa and arriving in Australia, Mr Krok distributed all the assets of a trust established by his father and entered into an arrangement involving a BVI company owned by a Liechtenstein Foundation.

This case will be closely watched by international tax planners and their clients, particularly since the ATO apparently sought and received relevant from the South African Revenue Service in the course of their audit investigation.

Written by | Posted in Africa • Australia/Oceania • Caribbean • Individual • International • Tax Controversy • Tax Risk Management

7 Habitual Mistakes Companies Make – An Introductory Tax Risk Management Case Study

TaxConnections Blog PostBBA Ltd decides to go for Tax Risk Management

TAKE BBA LTD, part of the international Rialtry Group, (a fictitious name but the facts are real) as an example. They faced a major tax audit on all fronts.  The trigger had been an article in the Exposé magazine, citing them as having sneaked assets offshore under the radar screen without detection by the IRS, and now they were leaking huge sums of money to a tax friendly jurisdiction, escaping significant tax charges in their country of effective management.

Four years later, they concluded their Tax Risk Management (TRM) process.  The process was heralded a great success by the board of directors of BBA Ltd, the Rialty Group, and the IRS.  Why?

There were no less than 30 key tax areas that required investigation and audit by the IRS.  IRS audit teams were typically given 100 man hours per key tax area to audit, and then would be expected to deliver a result through revised assessments.  Three thousand man hours would have been spent completing all the audits to arrive at a result for the IRS. This would have meant an equal, if not greater amount of time and resource to be spent by BBA Ltd. With a very small tax department, they would have had to hire an extensive number of outside consultants at great expense. Read More

Written by | Posted in Africa • International • Transfer Pricing

South Africa: Typical Tax Treaty Issues Facing Tax Emigrants

treatyTypical Double Tax Agreement (DTA) or treaty issues we face on a daily basis can be summarised as follow:

United Kingdom / South Africa DTA

1. Tax residency change not timeously reported to either SARS or HMRC
Most client suggest that they need file or report their SA income to the UK tax authority as they were non-domiciled in the UK and as the lump sum was not remitted to the UK, they need to pay UK tax on the lump sum income. No, says HMRC although you are non-domiciled you are subject to UK tax on lump sums received in SA, albeit not remitted to the UK, as lump sums are taxed on the arising basis and not on the remittance basis. In short, you cannot defer UK tax on the lump sum arising in SA, by sending said lump sum to Channel Islands, USA or EU nor can you escape the UK tax exposure by keeping the lump sum in your blocked account in South Africa.

2. The treaty dictates that lump sum received from South African fund managers on retirement annuity fund (RA) lump sums or pension/preservation funds, are tax exempt in SA and UK taxed only
This argument is most often presented to us by clients having called the HMRC call centre. We do not know how the client explained the situation to the HMRC call centre but suffice to say the answer is incorrect. The fact that HMRC refers you to Article 17 of the treaty is not adequate as the said article does not deal with lump sums. Article 17 specifically states that for purposes of the agreement an annuity taxable in the new home country only, is a fixed amount paid on a regular basis. You need not be tax lawyer to understand why the lump sum will never fall into this category of treaty exempt (in SA) annuity payments. Read More

Written by | Posted in Africa • Australia/Oceania • Estate Planning Tax • Expatriate • FATCA • FBAR • Individual • International • VAT
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