Posts

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.

Click  here to view the media statement
Click  here to view the initial batch of the draft Taxation Laws Amendment Bill 2019
Click  here to view the Explanatory Memorandum

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2019 CRS Technologies (Pty)Ltd. All Rights Reserved.

 

Draft Taxation Laws Amendment Bill 2017 and Draft Tax Administration Laws Amendment Bill 2017 published

The amendments proposed by the Taxation Laws Amendment Bill (TLAB) 2017 and the Tax Administration Laws Amendment Bill (TALAB) 2017 were published on SARS’s and National Treasury’s websites for public comment.

These draft Bills give effect to the tax proposals announced on Budget Day, 22 February 2017.

The main tax proposals in the TLAB 2017 that can have an impact on employers and payroll are:

  • Tax relief for bargaining councils regarding tax noncompliance.
  • Changes to the anti-avoidance rules for certain share schemes, mainly trusts.
  • A higher fringe benefit exemption for bursaries to learners with disabilities.
  • Removing the foreign employment income tax exemption in respect of South African residents.
  • Addressing the circumvention of anti-avoidance rules dealing with share buy backs, dividend stripping and contributed tax capital.
  • Postponement of annuitization requirement for provident funds to 1 March 2019.
  • Clarifying the rules relating to the taxation of employee-based share schemes.
  • Clarifying the hours used for the ‘160-hour’ determination for section 4(1)(b)(ii) of the Employment Tax Incentive Act, are the hours defined as “ordinary hours” by the Basic Conditions of Employment Act.

The main tax proposals in the TALAB 2017 that can have an impact on employers and payroll are:

  • To include only the portion of the travel reimbursement that is calculated at a rate per kilometer that exceeds the prescribed rate per kilometer in remuneration.
  • To spread the R350 000 pa monetary cap that limits the deduction allowed in respect of contributions to retirement funds over 12 months.

A more detailed discussion of the proposed changes will be provided once the legislation has been formally introduced to the National Assembly.

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2017 CRS Technologies (Pty)Ltd. All Rights Reserved.     

President Jacob Zuma has signed into law, the following Bills:

Taxation Laws Amendment Act

The Taxation Laws Amendment Act make the following changes effective:

Employment Tax Incentive (ETI)

  • The expiry date for ETI has been extended until 28 February 2019. (Effective date 01 October 2016)
  • The definition of monthly remuneration was amended to read “where an employer employs and remunerates a qualifying employee for at least 160 hours in a month..”.

This means unpaid hours (e.g. unpaid leave) will no longer be counted towards the 160 hours to determine a full month. (Effective date 01 October 2016)

  • A single employer will not be allowed to claim more than R20 million ETI per tax year. (Effective date 01 March 2017)
  • Limit on back-dated claims. Monthly claims can only be made up to the date of each 6-monthly reconciliation. After that no further claims for that specific reconciliation period will be allowed. (Effective date 01 March 2017)

Learnership allowances (incentive)

  • The period for the allowance has been extended to 31 March 2022. (Effective 01 October 2016 and applies to Learnership agreements entered on or after that date)
  • The tax deduction value will be based on the NQF level of the learner.
  • For learners with a qualification equal to NQF level 1 – 6, the employer qualifies for an annual deduction of R40 000.
  • For learners with a qualification equal to NQF level 7 – 10, the employer qualifies for an annual deduction of R20 000.
  • For learners with a disability, and a qualification equal to NQF level 1 – 6, the employer qualifies for an additional annual deduction of R20 000.

For learners with a disability, and a qualification equal to NQF level 7 – 10, the employer qualifies for an additional annual deduction of R30 000.

Unemployment Insurance Amendment Act, 2016

  • Extension of unemployment insurance benefits to learners who are undergoing Learnership training.
  • UIF benefits increased from 238 days to 365 days.
  • Maternity leave benefits increased to 66%.
  • Payment of maternity benefits may not affect the payment of unemployment benefits.
  • Employees who lost working hours due to reduced time at their work places, will be entitled to benefits.
  • Families and/or nominated beneficiaries of a deceased claimant will be allowed to receive the deceased’s benefits.

Charging of fees by any party (e.g. agency) to a UIF claimant for helping them submit their claims, are prohibited.

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2017 CRS Technologies (Pty)Ltd. All Rights Reserved.

Inspired, engaged and rewarded employees
CONTACT INFORMATION
Tel: +27 11 2594700
Email: info@crs.co.za

Centric House, Mellis Court, Mellis Road
Rivonia 2191