Home » Excon » 2009 Tax law Amendments – published for comment

2009 Tax law Amendments – published for comment

Pravin Gordhan (the new Finance Minister) recently said parliament:

The SARS will intensify its efforts to detect and contest non-compliance. This is in accordance with international best practice – the IRS of the USA has been asked to hire 10 000 more auditors to raise more taxes and combat off-shore tax schemes.  Read more at http://www.treasury.gov.za/comm_media/speeches/2009/2009060501.pdf

  1. Recent blogsmissed some of the previous comments – you will be able to find them here:

    1. Foreign Permissible Investments – As South African, what may or may I not own abroad? Guidance to expats, emigrants and IP owners
    2. Emigrating from South Africa? Or you left some time back – just page down
    3. Read more about the Smallwood appeal – see Press Release on the left!
    4. Formal Emigration : The  Excon Exit Check-list
  2. June 2009 tax laws  for comment – see the full lists of documents at http://www.treasury.gov.za/public%20comments/Draft%20taxation%20laws.aspx

    • Conversion of the Secondary Tax on Companies to the new Dividends Tax

    • Learnership tax allowance

    • Travel (car) allowances: Repeal of the deemed kilometre method:

    • Retirement withdrawals: The proposed legislation completes the reform process set in motion in 2008 regarding the taxation of retirement and pre-retirement withdrawal lump sums. Most of the proposed legislation dealing with lump sum tables and clarification of anomalies was published in the first batch of draft legislation in February 2009. The proposed legislation also seeks to simplify the taxation of minor beneficiary funds subject to regulation by the Financial Services Board, and to clarify the law when employers legitimately withdraw employer surpluses from retirement funds.

    • Estate Duty: surviving spouse can use a R7 million deduction amount on last death

    • One year wonder removed  1-year usufructory arrangement that artificially seeks to undermine the value of inherited property.

    • Provisional tax: In 2008, the provisional tax system was tightened to require 80 per cent accuracy in respect of the second provisional payment when compared to final assessed taxes due. Amid concerns that this requirement may not always be possible (especially for smaller businesses), the 20 per cent penalty will be waived in certain circumstances.

  3. Emigrating from South Africa? Or you have already emigrated some time back

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You may now resign from your local retirement funds and extract the entire after tax capital value from SA – i.e. gone is the one third limitations rules. The process involves:

  • Apply for full Excon emigration – forms MP336 (b) and IT21 (a) to be completed, see my web page for guidance

NB: There is a tax issue to be considered as the monthly pension / annuities leaves free of SA taxes and levies yet the lump sum is normally   taxed in SA as income and the net cash value could be subject to the 10% Excon levy. In short, obtain tax advise before you proceed! That is local SA and new home country tax guidance! Then again, it may just be the best Rand to your currency you may see for long time, making the decision easy as the Dollar or Pound value banked is acceptable!

  • Once the Excon approval was granted (Emigration Ref No and Blocked Account are the indicators) you can request a resignation as emigrant providing the information as listed in the attached document
  • Please note that we have been given conflicting reply IRO +55year old emigrants. Old Mutual says no, you can not cash in and take 100% you have to retire and accept the normal 1/3 commutation where as Momentum suggested that "prior to retirement" refers to persons not yet withdrawing from the fund i.e. have not retired from the fund despite being 55+ years old.

I will update once we have final answers yet you are most welcome to pass onto expat South Africans  – send any requests for further information to Hugo van Zyl

Links

  1.  http://www.sars.gov.za/LNB/MyLNB.aspSARS tax laws

  2. http://www.thesait.org.za/default.aspSA Tax Institute

  3. https://www.saica.co.za/Default.aspx – SAICA

  4. http://www.mondaq.com/article.asp?articleid=79722 – IP deductions Ireland

  5. https://www.saica.co.za/integritax/ – Integritax

  6.  

  7. http://www.treasury.gov.za/public%20comments/Draft%20taxation%20laws.aspxJune 2009 Batch

  8. Also

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