Due to unforeseen problems with our Telkom connection last week the Tax Talk newsletter was delayed. This week we have included information from the last newsletter that did not go out to our readers.

Dear Subscriber,

The SARS website states that In February 2006, the Minister of Finance announced in his Budget speech that SARS will offer a tax amnesty to small businesses including taxi operators, to give them a chance to become tax compliant without worrying about the large costs of previous tax, penalties and interest. Interaction with small businesses has shown that many want to be legal but are afraid that the costs of joining the mainstream economy (especially the cost of having to pay many years of back tax) outweigh the immediate benefits.

The tax amnesty is being offered to small businesses from 01 August 2006 - 31 May 2007, a full brochure on the Tax Amnesty is available on the SARS website.

This week on Tax Issues we discussed the difficulties involved in defining the concepts of ‘labour broker’, ‘independent contractor’ and ‘employee’ when it comes to tax. There seems to be problems with these definitions and Jenny Faber, attorney at KHFG Attorneys, explained the difficulties involved in these definitions. The discussion then focussed on the difference between an independent contractor and an employee. Jenny concluded the discussion by saying that in her opinion, SARS was over-interpreting the law by putting a labour broker, an independent contractor and an employee in one pot. A complete summary of the interview is available on the Tax Talk website.

Tax Talk invites you, our subscribers, to write to us with suggestions of tax topics about which you would like more information. We will invite experts to speak on these topics on Tax Issues, broadcast on Mondays at 20h40 and again at 22h40 on SUMMIT TV (DSTV CHANNEL 55).

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Until next time
Tax Talk Publisher

Ernst & Young

East Africa is providing fertile ground for companies seeking to expand their businesses into this region and beyond. With the availability of air, road and rail infrastructure into neighbouring regions, Tanzania, Uganda and Kenya are often chosen as the regional hub for organisations operating across the East African region.

But, report Ernst & Young executives in these regions, businesses are well advised to understand and take heed of specific taxation legislations in these countries to comply with the requirements of the relevant authorities while optimising the performance of their investments.

Tax Talk

Jenny Faber, attorney at KHFG Attorneys discussed the difficulties involved in defining the concepts of ‘labour broker’, ‘independent contractor’ and ‘employee’ when it comes to tax on the programme Tax Issues, broadcast on Summit TV on Monday night.

Can you CONFIDENTLY answer the following questions? Call us NOW to Book your place on the Tax MasterClass and ensure your organizations future tax health.

• Where do you think your greatest Tax Risk lies?
• What is your documented tax policy/strategy?
• How good is your tax department's communication with the rest of your organization?
• Do they understand what your organizations REAL TAX RISK is?
• Do you know how Corporate Governance affects Tax Risk Management?
• How do you manage your relationship with your largest business partner, the South African Revenue Service?

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 “The Complete Tax Workshop” a 1-day workshop presented by Daniel Erasmus, to find out how you can prevent your business from falling foul of the law, in any of these areas.

Tax Talk - Tax Risk Management For Executives

This code of conduct has been formulated to help SARS employees to understand the standards of personal and professional behaviour required of them to maintain public confidence in the integrity of SARS. This document, which applies to all employees merely provides basic guidelines. It is the responsibility of each and every one of us to ensure that ethical decision-making becomes part of our day to day dealings with the people we serve and our fellow employees.

Tax Talk - Extract from Tax Risk Management for Executives 2006

Tax Teams must not be isolated from the business divisions. Tax is a function that requires a Tax Strategy that is well understood in the corporate, in line with the business objectives, rather than focussing on tax technical issues.

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.

Sanchia Temkin - BusinessDay

A GROUNDBREAKING tax settlement between UK-based pharmaceutical group GlaxoSmithKline and the US Internal Revenue Service has significant implications for multinationals in SA, says Jacques van Rhyn, a tax director at PricewaterhouseCoopers.

The settlement, which is the largest of its kind in the world and which took place earlier this month, is likely to have serious implications to an array of products entering the local market.

Sanchia Temkin - BusinessDay

UMBRELLA funds are not the best retirement option for employees of small companies, says Verso Financial Services MD Edward Thomson.

“With the national savings rate at such a low level, and only 6% of South Africans able to retire comfortably these days, umbrella funds might be adding to savers’ difficulties,” he said.

Do you have something to say? Do you have an area of interest or expertise that you believe is something you can contribute for the interest of our readers? Do you want to share your views with like-minded people?

If so, send your submissions by email to (janine@taxtalk.co.za), fax (27 11 476 5004) or post (P.O. Box 1650, Gallo Manor 2052) and be heard!

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Contact Janine at
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(011) 476 5095