Taxation Laws Amendment Draft Bill & Tax Administration Laws Amendment Draft Bill

National Treasury and the South African Revenue Service (SARS) invite public comment on the 2018 Draft Taxation Laws Amendment Bill (TLAB) and the 2018 Draft Tax Administration Laws Amendment Bill (TALAB).

Both draft Bills give effect to the tax proposals announced on Budget Day (21 February 2018), as published in the Budget Review.

The main tax proposals contained in the draft TLAB are:

·Providing more flexibility for the treatment of retirement fund transfers and withdrawals;

·Introducing a fringe benefit exemption for lower-income employees who receive a loan from their employer for low-cost housing;

·Reviewing the International Shipping exemption for purposes of accommodating the use of replacement ships;

·Shortening the write-off period for electronic communications cables;

·Refinements and clarification for the conversion of debt to equity;

·The refinement of the interaction between the anti-avoidance rules for dividend stripping with corporate re-organisation rules;

·Inserting rules addressing the use of trusts to defer tax or recharacterise the nature of income; and

·Introduction of a one year income characterisation rule for amounts accrued to portfolios of collective investment schemes to provide certainty and limit potential abuse

The main tax administration proposals contained in the draft TALAB relate to:

·A removal of the requirement to submit tax returns for individuals receiving a tax-exempt dividend;

·Anti-forestalling amendments for excise duties;

·Clarifications on handling incorrect invoices for value-added tax refunds; and

·Allowing the collection of value-added tax payments to apply across branches and divisions

The media statement can be found here as well as both explanatory memorandums (check here and here).

Comments can be sent to Nombasa Langeni at [email protected] and Adele Collins at [email protected] by close of business on 16 August 2018