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2024 Legal and Policy

Legal and Policy - 10 October 2024

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SARS

  • 3 October 2024 – Fraudsters are sending emails to unsuspecting taxpayers and businesses pretending to be from a SARS employee. The emails contain an attachment with a link where one can ‘settle an outstanding balance or debt’. A real SARS employee’s name and contact details appear on the email signature but if you look closely the email domain is different. If in doubt, always check our Scams examples webpage.
  • 3 October 2024 – Customs and Excise Act, 1964: The tariff amendments notices, scheduled for publication in the Government Gazette, relate to the amendments to –
  • Schedule No. 1, to implement the revised Tariff Rate Quotas in terms of the Economic Partnership Agreement (SACUM-UK) (with retrospective effect from 1 September 2022 up to and including 31 December 2022;
  • Schedule No. 1, to implement the revised Tariff Rate Quotas in terms of the Economic Partnership Agreement (SACUM-UK) (with retrospective effect from 1 January 2023;
  • Schedule No. 1, to implement the revised Tariff Rate Quota in terms of the Economic Partnership Agreement (SACUM-UK) (with retrospective effect from 1 September 2023 up to and including 31 December 2023;
  • Schedule No. 1, to implement the revised Tariff Rate Quotas in terms of the Economic Partnership Agreement (SADC-EU) (with retrospective effect from 1 September 2023 up to and including 31 December 2023;
  • Schedule No. 1, to implement the revised Tariff Rate Quotas in terms of the Economic Partnership Agreement (SADC-EU) (with retrospective effect from 1 January 2024; and
  • Schedule No. 1, to implement the revised Tariff Rate Quotas in terms of the Economic Partnership Agreement (SACUM-UK) (with retrospective effect from 1 January 2024

Publication details will be made available later

  • 3 October 2024 – Income Tax Act, 1962
  • Binding General Ruling 74 – VAT treatment of certain supplies of goods or services made by municipalities to a national or provincial government
  • 4 October 2024 – SARS’s new medical aid data reporting requirements will be implemented at 17:00 on Friday, 4 October 2024. Current production data files generated and submitted to SARS on Business Requirement Specification (BRS) version 1.0.3 by medical aid data providers must be completed by 17:00 on 4 October 2024. Any submissions on this BRS version 1.0.3 after this cut-off time will be rejected as the new version will be active. Any production data files submitted before 17:00 will be processed as normal.

The major changes to the medical aid data reporting requirements inter alia include:

  • Provision of data on disabled principal members and their dependents.
  • Data of persons making payment on behalf of principal members; and
  • Separate non-allowable from the allowable expenses, currently reported as claims not paid or covered by medical schemes on the IT3(f) certificate.

Any trade testing queries should be referred to SARSTradeTesting@sars.gov.za, with the subject line “Medical Trade Testing”.

Effective Saturday, 5 October 2024, medical aid data submissions must be provided in line with the requirements outlined in the new External Medical Scheme Contributions BRS.

To ensure a smooth transition, SARS will grant a grace period of six months for partial submission of the requested data, while stakeholders obtain resources to achieve full compliance. For cases of partial compliance, reasons and a commitment date to fully comply must be submitted to Bus_Sys_CDSupport@sars.gov.za.

  • 7 October 2024 – The state provides state warehouses for the safekeeping of goods. These are managed by Customs. The purpose of this list of unentered goods is to notify the importer, exporter and any other person that has interest in the goods that the goods have been taken up into the State warehouse and if they remain unentered they will be disposed in accordance with the provisions of the Customs & Excise Act.

See the latest Customs Weekly List of Unentered Goods here.

  • 7 October 2024 – We have added new features that will make things a lot easier for our Customs traders.

The new SARS Online Query System (SOQS) features will enable you to:

The following guides were updated to describe the new process:

For a complete list of all SOQS features, see Use our Digital Channels webpage.

  • 8 October 2024 – The SARS Nigel branch will be closing its doors permanently on 31 October 2024. Taxpayers are encouraged to make a virtual appointment or a walk-in appointment to visit an alternative SARS branch. To make a booking, send an SMS with the word Booking and your ID number to 47277 or go to the SARS Booking System.
  • 08 October 2024 – The Commissioner for the South African Revenue Service (SARS) welcomed the Constitutional Court judgement handed down on 02 October 2024 by the Constitutional Court on the matter of The Thistle Trust v Commissioner of SARS. The matter concerned the applicability of the ‘conduit principle’ to capital gains when distributed in a multiple-tiered Trust structure in the same tax year. The Constitutional Court ruled in favour of SARS’ application of the statutes to the tax liability of the taxpayer, Thistle Trust.

The Thistle Trust, an inter vivos discretionary Trust, was a beneficiary of ten vesting Trusts. During the 2014, 2015 and 2016 tax years, the vesting Trusts realised capital gains after disposing of capital assets and distributed the realised proceeds to the Thistle Trust, which then distributed these proceeds to its beneficiaries within the same tax years. The Trust did not declare the capital gains in its income tax returns; instead, its beneficiaries declared the capital gains and paid capital gains tax on these gains.

SARS raised an assessment against the Thistle Trust for the above-mentioned years for capital gains that had accrued to the Thistle Trust. SARS also imposed a 50% understatement penalty and required the Thistle Trust to pay interest on the outstanding tax liability. The Thistle Trust objected to the assessment on the basis that the Thistle Trust was merely a conduit for the movement of gains to its beneficiaries which, in terms of the common law and the Income Tax Act at the time, were taxable in the hands of only the beneficiaries. The objection was subsequently disallowed.

The Thistle Trust approached the Tax Court who found in the Trust’s favour. SARS appealed to the Supreme Court of Appeal (SCA). The SCA set aside the order of the Tax Court in so far as it applied to the issue of the tax liability and held that the conduit principle did not apply beyond the Thistle Trust, and that the Trust was accordingly liable for the capital gains tax. However, it upheld the objection of the Thistle Trust on the issue of the imposition of an understatement penalty. No costs were ordered.

The Thistle Trust appealed to the Constitutional Court on the issue of its tax liability. The majority judgment dismissed Thistle Trust’s appeal on the issue of its tax liability. SARS’ conditional application for leave to cross-appeal on the issue of levying the understatement penalty was also dismissed as the Constitutional Court found that it was not in the interests of justice for the court to sit as a court of first and last instance to determine a legal issue that would have no bearing on the outcome of the appeal. Prior to arriving at this decision, the court found that the tax position taken by the Thistle Trust was one taken on legal advice and not only was it reasonable, but it was one that was upheld in a reasoned Tax Court judgment. Further, that the argument advanced by SARS in respect of the lack of reasonable care in completing a return would elevate SARS to the status of an authority that can decree the only reasonable interpretation of tax legislation. The court went on to impose a cost order against SARS on the matter of understatement penalty. SARS respects this order by the court, and continue to explore the criteria on which understated penalties are based and provide greater clarity in this regard.

SARS Commissioner, Mr. Edward Kieswetter, said that “this judgement reaffirms SARS’ correct decision in attributing tax liability to the Trust in a multilayered Trusts structure. Additionally, the judgement further provides clarity and certainty on how capital gains distributed by a Trust to beneficiaries should be treated by Trustees in a similar position”.

Full judgment of Thistle Trust v Commissioner for the South African Revenue Service (concourt.org.za).

For further information, please contact SARSMedia at SARSMedia@sars.gov.za.

  • SARSTC IT 45791; VAT 22288 (IT; VAT) [2024] ZATC JHB (15 July 2024) – Default judgment-condonation application
  • SARSTC IT 45781 (IT) [2024] ZATC JHB (8 July 2024) – Deductibility of advance payments
  • 9 October 2024 – The South African Revenue Service (SARS) has noted the phenomenal growth of the use of various digital currencies by many South Africans. Prominent amongst these is the prevalence of crypto assets. A staggering number of more than 5.8m South Africans hold a crypto asset, with Southern Africa boasting the largest uptake of Bitcoin in the world.

SARS is concerned that these crypto assets and trades are not being declared on the tax returns of taxpayers. SARS is legally obligated to account for any income or assets held by taxpayers and had previously invited crypto exchanges and those involved in trading or holding crypto assets to disclose related activities on a voluntary basis. As a follow up, SARS will be including crypto assets into its compliance programmes. Consequently, SARS is engaging with the Financial Sector Conduct Authority (FSCA) regarding the provision of information on registered Crypto Asset Service Providers (CASPs). SARS is also receiving information directly from the local exchanges.

Importantly, it must be underscored that through multilateral agreements SARS is exchanging information with other tax authorities globally. The provision of offshore crypto accounts will be the subject of a multilateral agreement to be signed by Ministers of Finance in November 2024 which will catalyse the cross jurisdictional exchange of such information in respect of South African taxpayers.

SARS believes that most taxpayers and traders are honest and that they expect to be assisted to fulfil their legal obligations. Pursuant to our legal mandate, SARS provides certainty and clarity about all legal obligations for taxpayers and traders. SARS is also working assiduously to make it easy and simple for taxpayers and traders to seamlessly comply with their obligations. Critically, it is our strategic objective to make it hard and costly for those who are willfully non-compliant. These efforts are intended to support our Strategic Intent of fostering a culture of voluntary compliance.

Resultantly, in addressing crypto compliance SARS is increasing capability in its audit teams to support enforcement initiatives. SARS has resorted to greater use of artificial intelligence, machine learning and algorithms to process our work. In implementing our mandate, SARS has recently issued query letters to taxpayers with crypto assets. These letters aim to gain an insight into taxpayers’ investment in crypto assets and the trades undertaken to enable SARS to assess taxpayers’ compliance in this regard.

Taxpayers who could potentially be affected and are understandably concerned about their crypto asset compliance are reminded of the SARS Voluntary Disclosure Programme (VDP) to facilitate compliance. This opportunity has strict conditions. One being that taxpayers must approach SARS first. Once SARS has identified the taxpayer for audit, they are precluded from applying for the VDP.

SARS Commissioner Mr. Edward Kieswetter once more reminded taxpayers to honestly and dutifully honour their legal obligations by declaring all their income. He said: “SARS has been working ceaselessly to ensure compliance by all taxpayers, and those who are evading their responsibility make the burden of compliance difficult for compliant taxpayers. This is not only unfair to honest taxpayers but affects the vulnerable in society disproportionately by limiting the state’s ability to deliver social grants and other much needed social benefits. Let all know that technology has enhanced SARS’ ability to root out non-compliant taxpayers. Be warned, SARS will pursue all without fear, favour or prejudice.”

For further information, please contact SARS at SARSMedia@sars.gov.za.

  • 9 October 2024 – The South African Revenue Service (SARS) has noted the phenomenal growth of the use of various digital currencies by many South Africans. Prominent amongst these is the prevalence of crypto assets. A staggering number of more than 5.8m South Africans hold a crypto asset, with Southern Africa boasting the largest uptake of Bitcoin in the world.

SARS is concerned that these crypto assets and trades are not being declared on the tax returns of taxpayers. SARS is legally obligated to account for any income or assets held by taxpayers and had previously invited crypto exchanges and those involved in trading or holding crypto assets to disclose related activities on a voluntary basis. As a follow up, SARS will be including crypto assets into its compliance programmes. Consequently, SARS is engaging with the Financial Sector Conduct Authority (FSCA) regarding the provision of information on registered Crypto Asset Service Providers (CASPs). SARS is also receiving information directly from the local exchanges.

Importantly, it must be underscored that through multilateral agreements SARS is exchanging information with other tax authorities globally. The provision of offshore crypto accounts will be the subject of a multilateral agreement to be signed by Ministers of Finance in November 2024 which will catalyse the cross jurisdictional exchange of such information in respect of South African taxpayers.

SARS believes that most taxpayers and traders are honest and that they expect to be assisted to fulfil their legal obligations. Pursuant to our legal mandate, SARS provides certainty and clarity about all legal obligations for taxpayers and traders. SARS is also working assiduously to make it easy and simple for taxpayers and traders to seamlessly comply with their obligations. Critically, it is our strategic objective to make it hard and costly for those who are willfully non-compliant. These efforts are intended to support our Strategic Intent of fostering a culture of voluntary compliance.

Resultantly, in addressing crypto compliance SARS is increasing capability in its audit teams to support enforcement initiatives. SARS has resorted to greater use of artificial intelligence, machine learning and algorithms to process our work. In implementing our mandate, SARS has recently issued query letters to taxpayers with crypto assets. These letters aim to gain an insight into taxpayers’ investment in crypto assets and the trades undertaken to enable SARS to assess taxpayers’ compliance in this regard.

Taxpayers who could potentially be affected and are understandably concerned about their crypto asset compliance are reminded of the SARS Voluntary Disclosure Programme (VDP) to facilitate compliance. This opportunity has strict conditions. One being that taxpayers must approach SARS first. Once SARS has identified the taxpayer for audit, they are precluded from applying for the VDP.

SARS Commissioner Mr. Edward Kieswetter once more reminded taxpayers to honestly and dutifully honour their legal obligations by declaring all their income. He said: “SARS has been working ceaselessly to ensure compliance by all taxpayers, and those who are evading their responsibility make the burden of compliance difficult for compliant taxpayers. This is not only unfair to honest taxpayers but affects the vulnerable in society disproportionately by limiting the state’s ability to deliver social grants and other much needed social benefits. Let all know that technology has enhanced SARS’ ability to root out non-compliant taxpayers. Be warned, SARS will pursue all without fear, favour or prejudice.”

For further information, please contact SARS at SARSMedia@sars.gov.za.

  • 9 October 2024 – Achieving our Vision 2024 of a smart, modern SARS with unquestionable integrity that is trusted and admired is of paramount importance. Pivotal to the delivery of our vision are our digital platforms and technology infrastructure. To provide clarity and certainty, make it easy for taxpayers and traders to comply with their obligations and building public trust and confidence, our technology assets must demonstrate the highest levels of availability, robustness and security.

In accordance with our Vision and Strategic Objectives, which include modernising our systems to provide Digital and Streamlined online services, we are hard at work ensuring that our digital platforms and technology infrastructure are available, robust and secure, by performing regular upgrades, enhancements and maintenance.

Considering the above, SARS Digital platform maintenance are scheduled for Saturday, 12 October 2024 from 20h00 to 00h00.

During this time, you may experience intermittent service interruption on our Customs Digital Platforms.

Responses (CUSRES messages) to transactions submitted during this time will be delayed, however, arrival and exit management functions are available at land border posts for all released declarations and manifests.

Stakeholders are therefore urged to submit all Goods Declarations (bills of entry) and Road Manifest, especially those deemed priority, by Saturday, 12 October 2024 @ 19h00.

  • 9 October 2024 – The Two-pot calculator and Personal Income Tax registration are now also available on the SARS USSD channel. These features have already been rolled out in other channels i.e. WhatsApp, MobiApp and the SARS Online Query System (SOQS).

For more information on this and other mobile services available, see our SARS Mobile Tax Services webpage and the updated Guide to SARS Mobile Tax Services.

In short, the SARS USSD channel allows users to access SARS services by dialling a service code. By dialling *134*7277#, users are presented with a list of menu items to select from.

Taxpayers who wish to withdraw from their Two-Pot Retirement System can now use the tax calculator available on the SARS USSD channel. This calculator provides an estimate of the potential payout. Additionally, individuals can now register for Personal Income Tax (PIT) via the SARS USSD channel.

Here is how these services can be accessed in three simple steps:

  • Two-Pot tax calculator:
    • Step 1: Dial the SARS service code and select “Two-Pot tax calculator”
    • Step 2: Text and send your SARS registered South African ID number, Tax Reference Number, your expected annual income or taxable income and the amount you plan to withdraw.
    • Step 3: Retrieve your calculation results sent via SMS
  • Personal Income Tax (PIT) Registration:
    • Step 1: Dial the SARS service code and select “Register for tax”
    • Step 2: Text and send your personal demographic details: Name and Surname, South African ID Number, email address and physical address.
    • Step 3: Retrieve your Income Tax Number allocated to you via SMS
  • 9 October 2024 – Release notes for both versions of e@syfile:

The e@syFile™ Employer version 7.4.4 (old) and e@syFile™ Employer version 8.0.0 (new) release notes specify:

  • New SARS EMP501 form V2024.00.10
  • Reversal of validation applied to the underscore “_ “character in demographics fields
  • Introducing new SARS PDF template for ETV Letters

NATIONAL TREASURY

OECD

SARB

AuthorLegal and Policy
Date10 October 2024