The draft Taxation Laws Amendment Bill 2019 published for comments
On 10 June 2019 National Treasury published the initial batch of the draft Taxation Laws Amendment Bill 2019 for public comments. The full text of the 2019 draft Taxation Laws Amendment Bill will be published for public comment in mid-July 2019.
This initial batch is intended to ask for comments on two specific amendments that are more urgent and require further consultation. Written comments on the initial batch of the 2019 draft Taxation Laws Amendment Bill are due on 25 June 2019.
The two amendments referred to, are:
Aligning the effective date of tax neutral transfers between retirement funds with the effective date of retirement reforms, which is
1 March 2021.
- In 2013, retirement fund reform amendments were effected to the Income Tax Act regarding the annuitisation requirements for provident funds. The main purpose of these amendments was to improve the protection of retirement fund interests during retirement, resulting in provident funds being treated similarly to pension and retirement annuity funds with regard to the requirement to annuitise retirement benefits.
- These amendments were originally intended to come into effect on 1 March 2015, however, further negotiations within NEDLAC have not been finalised, resulting in the effective date for the annuitisation requirements for provident funds being postponed to 1 March 2021.
- Each postponed requires several amendments to various provisions of the Income Tax Act. One change was accidentally left out in paragraph 6(1)(a) of the Second Schedule to the Income Tax Act, which makes provision for tax neutral transfers between retirement funds.
- To correct this, it is proposed that urgent changes be made to the Income Tax Act to align the effective date.
Addressing abusive arrangements aimed at avoiding the anti-dividend stripping provisions.
- This amendment is not applicable to Employers/Employees.
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