Dear Subscriber,

Aggressive tax structuring could hold negative implications for South Africa.

A growing number of large South African entities have reorganised their corporate structures in recent times. SARS recently released a statement by commissioner Pravin Gordhan in which he acknowledged that these transactions were proof of growing investor confidence and provided substantial benefits for the economy through capital inflows and positive domestic and foreign investor sentiment.

Gordhan however expressed the reservation that, on occasion, these transactions could be structured in such a way that they also resulted in significant negative implications for the country.

SARS has become aware of certain transactions that show complete

and reckless disregard for tax morality and South African tax law. Through elaborate structuring, these deals seek to deliberately avoid the tax consequences that should flow from the associated transactions, thereby robbing not only the fiscus of tax revenue, but all South Africans.

In the statement, SARS declared that it intended carefully examining these transactions to ensure that no impermissible tax loss occurred. Said the Gordhan statement, "the architects of certain tax aggressive structures will not be permitted to abuse South Africa´s tax provisions in ways clearly unintended by the legislature. They will be vigorously challenged".

The intention was also to engage with stakeholders such as shareholders, investors and their advisors to see whether they were serious about issues such as poverty alleviation and the overall development of South Africa. SARS called upon corporate leaders to take greater responsibility to ensure that the advice that they pursue does not undermine South Africa's tax base and the compliance morality.

Tax Issues
Do companies fully understand tax risk and tax risk management? Ernst & Young recently did a survey amongst South African companies to determine how they rated their tax risk and came up with surprising results. Corlie Hazell, national director: tax risk and risk advisory at Ernst & Young discussed this matter on Tax Issues. Click here for a summary of the full interview. Tax Issues is broadcast on Mondays at 20h40 and again at 22h40 on SUMMIT TV (DSTV CHANNEL 55).

Get the TAXtalk Magazine delivered to your postal address, receive a weekly tax electronic newsletter and have 24 hours' access to download TAXtalk information and eBooks.

You can get all this by SUBSCRIBING to TAXtalk for R50.00 per month or R600.00 annually. Click here to subscribe online in less than two minutes.

Until next week.
Head of TAXtalk

SUBSCRIBE to TAXtalk before the small business tax amnesty deadline on 31 May 2007 and receive a FREE TAXtalk Magazine subscription pack and be entered into a prize draw for 5 complimentary seminar seats, to The International Tax Institute's Small Business Tax Amnesty Seminar worth R650.00

Go here to subscribe online in less than two minutes.

TAXtalk

Do companies fully understand tax risk and tax risk management? Ernst & Young recently did a survey amongst South African companies to determine how they rated their tax risk and came up with surprising results. Corlie Hazell, national director: tax risk and risk advisory at Ernst & Young discussed this matter on Tax Issues, broadcast on Summit TV on Monday night.

Gavin Goertz - KHFG

Section 35 (A) of the Income Tax Act places an obligation on a purchaser to withhold a stipulated amount from payments to a non-resident seller of a property.

South Africans are taxed on their world wide income if they are regarded as "residents" for tax purposes. On the other hand, non-residents are subject to tax in South Africa on a source basis.

eTaxJobs is a global job portal exclusively for tax professionals, and an online resource for employers and recruitment firms to advertise their vacancies. eTaxjobs operate in the UK, Europe, USA, Canada, Australia, New Zealand, Africa and around the World.

Available tax jobs for this week are:

• Group Tax Adviser, Vodafone, Newbury, UK
• Front Office Tax, US Investment Bank, London, UK
• Tax Manager, Client Transaction Team, Swiss Re, Zurich, Switzerland
• GST Manager, Big 4 Firm, Singapore
• Tax Planning Co-ordinator, Chevron (French Advantageous), London, UK

Sanchia Temkin - BusinessDay

SOUTH African small and medium-sized entities (SMEs) could soon find themselves in a quandary — whether to prepare their financial statements in line with international practice or in tune with locally developed guidelines.

The head of technical policy for Africa at the Association of Chartered Certified Accountants of Southern Africa, Bruce Mackenzie, said last week although the International Accounting Standards Board (IASB) had issued an exposure draft of its reporting standards for SMEs, SA was developing its own guidelines.

Dee Bezuidenhout - Practical Vat Handbook - Fleet Street Publications (Ltd)

You may regard Vat as nothing more than a nuisance. But have you been giving Vat the attention it deserves?

PricewaterhouseCoopers recently ran a survey to assess the impact and risks of Vat. And the results revealed a very carefree attitude towards Vat! Many companies dont regard Vat risks as significant (32% of the respondents). When I hear these results I cant help but shiver, because I have seen how Vat mistakes can cost you dearly!

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.

P.H. OHalloran - Taxadv CC

Section 7 of the Vat act is the section that imposes or drives the act. It lists the circumstances under which VAT is chargeable.

The section is reproduced as follows:

SALES EXECUTIVE REQUIRED

We are a niche publishing company that publishes a top professional magazine. We require the services of a mature marketing and sales person who will assist in building a successful and significant publication. If you are highly motivated and sales driven please send your CV detailing past experience to jobs@taxtalk.co.za

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!

We will publish the best stories and viewpoints on our website &/or in our weekly newsletter.

Let TAXtalk be your mouthpiece.
With our media exposure it will be worth
your while to advertise with us.

Download Advertising
Options Now
[PDF Format - 1.0Mb]

Contact Janine at
janine@taxtalk.co.za
(011) 476 5095