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DO IT BEFORE 19/12/2014 = FORMALLY EMIGRATE NOW AND WRAP UP YOUR SA TRUST SOONEST
IT’S A MATTER OF TIME SA TRUST BENEFICIARIES LIVING IN AUSTRALIA WILL BE HARSHLY TREATED AS TAX CHEATS WARNS THE ATO.
The ATO (the Australian Taxation Office) recently announced and published significant PROJECT DO IT information on the tax amnesty for foreign assets held in own or trust / entity name.
As of 1 March 2014, South Africans can now emigrate or exit their SA private company to be owned directly below an Australian trust or even better below an Australian Hold Co, either owned by an Australian trust or in certain cases as a subsidiary of a self managed Super.
Hugo may not advise on the Australian structure yet can ensure the trust is properly dissolved (where advisable and legal). I am quite willing to run this past the various families and what is important to IRM’s is that most South Africans in Australia incorrectly reported in SA and Australia i.e. they may need to do a VDP (voluntary disclosure or amnesty like) application in South Africa before or simultaneously with the ATO’s project DO IT.
Where there is a tax refund in SA, VDP will not be applicable as VDP is only where there is a tax due on revision or update.
Feel free to contact me should have questions.
February must be one of the busiest tax months in South Africa….and that is not because it is the shortest month! Not at all!
OK sometimes I blog tongue in cheek and I guess this one is a little tongue in cheek….hopefully my own tongue in my own cheek and no foot in any mouth will need changing!
Hold your braces; hold your horses and try to enjoy my February journey.
Have sympathy for my family (read dearest spouse aka as management, as in management override) and continue to fake sympathy….or face my fee note!
To complicate matters, 2014 tax year end is on a Friday!
You try explain to management at home why we not pushing through that last entertainment bill on Friday night the 28th….as I am working until midnight and SARS will not allow spousal dinners without accompanying tax adviser, as a tax deduction!
Really? You think I am stingy and only spend on clients and staff? Note to reader: Did I mention I took senior staff and major clients for breakfast on Valentines day last year and ended up sleeping through the Valentine movie? Oops, whale fail on the Whale Coast!
This is the toughest month we have to journey through, keep on smiling, attend a valentines day functions, lot’s of birthdays…..remember several birthdays…..yes, being in my 50′s I do, like so many friends, share a tax efficient day birthday.
See in those days, every child born before the last day of February equaled a R100 tax saving. And in those days, our parents drove Fiats and Beetles …. R50 rand filled the tank! So yes, I have lots of birthday parties to attend…and then I have family doing a birthday once every leap year only! Small mercy, no family party to suffer through on the last day, February 29th!
But I sulk not, wine and dine should have been my career! So now I made it my passion and my hobby. Ask my beer gut!
This then is the story of tax adviser and tax accountant’s journey during February of each year:
1. Planning and executing payroll and PAYE (payroll tax) recons, recover PAYE shortfalls and ensure software is SARS compliant and updated BEFORE YOU ATTEMPT THE TAX YEAR ROLL OVER. Oh, only to be update once again on the 3rd or latest the 5th of March as the new tax tables are now effective.
2. Reviewing, no double checking with each client on their income levels and capital gains tax events over the past 12 months. For expats eventually selling that family home may be CGT tax free event they think, in SA but it may trigger tax emigration as most tax treaties favour the country where your family home is. Relying on the two homes test applying the centre of vital interest no longer protects expats living in Australia. And whats worse this year, CGT on that Prop Co and property rich trusts they so dearly held on despite their being no Estate Duty in Oz or Malta.
3. Update all but all provisional tax eFile forms and contact each client to explain why he or she has to pay provisional tax 2014 and assessed 2013 in the same month. Oh, don’t be surprised to be forced to explain tax year end February 2013 being filed in January 2014 because you, mr client brought your tax papers in the day you dropped bottle of Xmas Whiskey -as I was leaving for the summer break! Happy holidays to you to mate! Oh BTW look at that small marks at bottom right of the Bells label, we have been exchanging this very same bottle for12 years now. Show some initiative and give me the good bottle of red you scored from our wine maker friend! Yes I know, I had the pleasure to tell him no VAT input in that expensive shopping spree!
4. Keep an eye on budget rumours! Yes you may recall the year the CGT rates increased over night, the dividend tax came in at 15% and not 10% as expected. Ok we had a month to prepare but certain exempt STC options fell away overnight. Will this year see announcement on trust tax rules?
5. Attend budget speech or post budget breakfast. Tax booklets need to go out and imagine the client asking something I missed during the budget speech! Ok no smoke breaks on February 27th.
6. Luckily I was wise enough to give up the accounting practice! Have mercy on my fellow accountants arranging stock takes, sending our reminders to record final car mileage or odometer readings, reset the eLogbook (yes shot the idiot who designed a logbook without an auto reset on 1 March! See we have to even think for the system analysts. Oh, did I mention the VAT filing and payment arrangements on eFile needed some attention and explaining. Really Mr Client this is the 12 year you ate paying 2013 assessment, 2014 provisional tax and January VAT201. Stop winging, allow habit or is it instinct to kick in and budget BEFORE you go skiing in Italy.
7. Oh, back to budget day! Go home update trust and company minutes, get them signed offbefore midnight 28th, update all provisional tax forms accordingly, prepare Dividend Tax returns and once again contact all clients…sorry I no longer allowed activate payment from eFile. Please log on, call me as I have lots of time, to run you through the payment creation and execution whilst you online. My 28th day would have boring without your call! No don’t worry I made a point of knowing all the banks’ internet platforms. Oh and I will gladly hold on whilst you switch between personal banking and corporate banking, telling me how you struggle to keep up with all the passwords and verification processes. Oh and thanx for sharing with me the kilos you lost because you were a tea totaler, underloaded your carbo and managed to be a social bore! My post budget breakfast was soooo expensive this year I sipped three glasses of champers before 7am and had 6 croissants to ensure value for money! Next year I going to demand cronuts at that price!
8. For the record I do not attend bank-assurance sponsored post budget breakfasts, I read enough of their marketing mailers during the year! After all they have yet to explain to us why did they not warn us the income protector policy holders that the 2014 premium increase is futile! I want cronuts as I paid my own way! Listen up SAICA and The SAIT!
9. Ok back to business, after taking 6 calls on the budget (why do you care what I think off the budget? I know this call was a cheap shot at a free update relevant to your issues!) and sending 12 twitter replies, I am ready to do my own provisional tax return, and that of my father and the spouse’s and lately all the trust babies attending varsity blissfully unaware of their studies are being afforded and paid through conduited vesting at low tax rates! Oh, and 5 calls later explaining to Jimmy that there is NO, read zilch, none, no benefit in paying a holding deposit on your new wheels. What? You already did it and you don’t like me for what I shared as postman Pat! No! No! no I don’t want to hear you used provisional tax money to pay the deposit! My fault! Really? Because I said last year use ANY money to buy your luxuries just don’t dip into the VAT you saved up? I did not say provisional tax also had had a late payment AND understatement penalty? Jimmy, it was a VAT update seminar not. Tax update and after all you sent your PA who knew nothing about VAT! Oh I lie, she knows how to file your VAT return! Clever PA!
10. As I walk into the office on the 28th, positively naggered, my star employee A… creep once more! He switches on the wide wide screen TV bought to entertain staff during Soccer World Cup 2010, and plays backlast nights recorded Summit and BDT programs on budget analysis! Please I need that like a bullet in the head! Oh my, as I hear that sweet A… Creeping voice, I realize I forgot he made his TV debut last night whilst I was updating eFile provisional taxes last night. Thank you for the reminder. Remind me not to pay you overtime nor the petrol claim for that journey to the TV studios!
11. As I am about to lock the office door, not at the end of a normal business day, but rather close to midnight the smart phone shows its failures and delivers a text message mom sent early morning on the 27th. remember to remember it’s your uncle Ted’s 75thbut as there is no 29th this year we are doing his surprise birthday party on Friday night the 28th at 6pm. Remember he gets grumpy after 8 so don’t delay his bedtime and he loves you being MC at all the family functions. You the only one not crying when you make speeches! Really mom, do you need to remind me its Friday the 28th of February and he is the best tax baby example I know!
Thanx for small mercies, tomorrow is Saturday the 1st of March, 20 days to a long weekend.
I will sleep in till 10am and then the better half will take me to Hermanuspietersfontein (HPF) Food Market, feed me bottles of Bloos until I show some sign of a personality.
Not for long though, Bloos has that effect on me….makes me sleepy…..
It Monday 3 March, the nightmare is over…time to issue the fee notes! What bliss it is to be a tax adviser! We the only profession issuing lots of fee notes on the first day of the year!
Unlike Doctors who don’t know when their rich patients will return, tax advisors do know… The Doctors will bring their “tax doos” filled with loose papers, in on or around Easter, just as I will be off to KKNK to spend Februaries turnover in the Klippies Tent! Deal with it A… Creeper! the Boss needs to catch up on his breath, management’s Valentine and your new status as celebrity tax boffin….
The joys of helping people with tax problems, is the knowledge they will return next year or perhaps in two years, allowing me to double bill playing catch up or doctor-fix-it the cheapie around the corner did not open his doors after summer break. Wonder why? Did you read the papers? SARS closed him down for banking your VAT cheque.
Welcome back its nearly a new tax year! A new billing cycle…but most important, a new challenge a new tank full of adrenalin!
Who said it was boring and easy to be an accountant!