Dear Subscriber,

Franchising is a popular way of doing business. Not only does it offer the buyer of a franchise the advantage of the franchisors experience and assistance, it is also believed that entering into a franchising agreement provides

the chance to start a business with greater efficiency, proven products or methods, public recognition and higher expectation of success.

Franchises are major role players on the South African restaurant and fast food scene. In fact, with a massive turnover of close on R130 billion per annum and employment provision for almost 300 000 people, this industry sector shows an annual growth of more than 20% per year. A recent ruling by the Cape Tax Court could however place a serious tax burden on the shoulders of the franchisee and might even place small businesses in jeopardy.

Are franchises in trouble when it comes to the disallowance of tax deductions on royalties? On Monday, 24 July 2006, Daniel talks to tax attorney Terry Scott about the recent tax court ruling on royalties. Are franchises set to lose billions?

Tax Issues is on every Monday at 20h40 and again at 22h40 on SUMMIT TV (DSTV CHANNEL 55.) Don't forget to tune in.

If you are not yet subscribed and you would like a copy of the Tax Talk Magazine to keep you informed, email us your postage details and we will be happy to provide you with a complimentary copy of Issue 2, so that you can see first hand the resourceful information that is being published.

Please email: neo@taxtalk.co.za for a copy.

Until next time
Tax Talk Editor

Tax Talk

What is general market perception when it comes to SARS’ tax audits? Are these audits something to fear or not? Daniel Erasmus spoke to tax lawyer Pierre du Toit about this question on the programme Tax Issues, broadcast on Summit TV on Monday night.

The South African Payroll Association is proud to announce its annual conference which takes place nationally in September under the theme 'Spring into Action'.

We are pleased to extend an invitation to you to be a part of this groundbreaking opportunity to engage the industry, discuss relevant topics and interact with leading, recognized experts.

As a representative organization that continues to lobby on behalf of payroll administration personnel and disseminate information that is up-to-date and pertinent, the South African Payroll Association hereby extends its role to ensure that what we pay forward does count.

There has never been a better time for corporate South Africa to delve into an area of business that, if managed correctly, could secure a better future for all.

Why are Transfer Pricing provisions constitutionally invalid and not enforceable? What amnesty is available in 2006 to corporate taxpayers for undisclosed income (not just for small businesses) and what is the effect of the Royalty Judgment on royalty payers?

Don't miss this 1-day COMPLETE TAX WORKSHOP presented by Daniel Erasmus, to find out how you can prevent your business from falling foul to the law, in any of these areas.

Tax Talk

As from 30 June, companies will no longer be liable to pay Regional Services Council levies. Are there any tax implications contained in repealing these levies? Daniel Erasmus spoke to Geraldine Connell, director, Tax at Deloitte about this issue on the programme Tax Issues, broadcast on Summit TV.

Sanchia Temkin - Business Day

THE South African Revenue Service (SARS) received more than 2-million tax returns at the close of business on Friday, which could boost revenue coffers, said SARS spokesman Adrian Lackay.

SARS was confident that when the final reconciliation of submission figures was completed by next week, it would show an increase of between 12% and 15% compared to returns submitted by last year’s deadline, Lackay said.

From personal individual tax to significant company tax changes - the subject is a hotly debated issue throughout South Africa's corporate environment. Tax Issues - every Monday at 20h40pm and again at 22h40pm - demystifies some of the latest developments and issues being discussed in the corridors of power. Tax Issues will cover; The impact of pending new tax laws on individuals and companies, The capital gains tax debate, New SARS initiatives to collect tax Changes to tax benefits, The VAT vs personal tax debate.

Tax Bulletin published by The Practical Tax Handbook - Fleet Street Publications (Pty) Ltd

Chances are you have heard of the principle ignorance of the law is no excuse. You can't plead ignorance to SARS; you know you have to file your tax return! You can expect to pay if you neglect to do so. If you are a first offender, your omission will attract a R300 penalty. This doubles to R600 for second offenders. If it's your third time, the penalty triples to R900. For companies, this will be R1 200.

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