CATEGORIES
- (1) Negotiating Tax Debt and Payment Arrangements with SARS
- (31)Accounting
- (2)Accounting for Income Tax
- (1)Accounting for Income Tax
- (7)Administration of Estates
- (1)Advisory Services
- (1)Application of tax rates, s6(2) rebates
- (1)Assessed losses
- (4)Audit, Reviews & Other Services
- (9)Blogs
- (8)Capital Gains Tax
- (1)Capital Gains Tax - Individuals Tax
- (1)Capital Gains Tax Implications of Trusts
- (2)Case study: Home office expense
- (1)Case study: Travel allowances
- (1)Company Formations
- (1)Compliance
- (123)Corporate Tax
- (9)Customs and Excise
- (2)Deceased Estate
- (1)Deductions Pre-trade and prepaid expenses
- (1)Deregistration
- (2)Employer and Employee (PAYE and UIF Specific)
- (1)Estate Duty
- (1)Events / Webinars
- (9)Faculty News
- (2)Farming
- (152)Individuals Tax
- (1)Input - Customs Duty
- (3)Interest
- (13)International Tax
- (17)Legislation
- (1)Low interest rate loans and loan subsidies
- (1)Nature of the rights of beneficiaries
- (1)Notional input tax
- (9)Payroll
- (2)Practical Payroll
- (2)Provisional tax (Link with other Taxes)
- (2)SARS Dispute Resolution
- (4)SARS Issues
- (1)Salaried Employees
- (134)Tax Administration
- (2)Tax Administration Part 2B: Resolving Problems with SARS using the Tax Ombud
- (1)Tax Administration Part 3B Dispute Resolution - Objection and appeal
- (3)Tax Update
- (1)Tax implications of loans to trusts
- (1)Tax residence
- (1)Tax returns and payments
- (2)Transfer-Pricing
- (1)Trust Income / Gain Allocations
- (1)Trust types and income allocations
- (6)Trusts
- (70)VAT
- (3)VAT periods
- (1)Wear and tear allowances
- (1)Wills, Estates & Trusts
- (1)Zero Rated
- (1)eFiling
- Show All
Efficient or inept? South Africa’s corporate income tax rate and restructuring rules
- 19 December 2019
- Corporate Tax
- Candice Gibson
Monday, 28 May 2018
Important:
This article is based on tax law for the tax year ending 28 February 2019.
Author: Candice Gibson
As indicated in our Tax and Exchange Control Alert published on 13 April 2018, the Davis Tax Committee (DTC) released a media statement on 12 April 2018 in which it announced the publication of four additional final reports and conclusion of its work based on its Terms of Reference.
For purposes of this alert, certain aspects from the report on the efficiency of South Africa’s corporate income tax (CIT) system (CIT Report) will be expanded upon, with particular reference to the reviews undertaken in respect of:
- the efficiency of the CIT rate; and
- the efficiency of the corporate restructuring rules (CRRs).
Background
The DTC formed a CIT sub-committee on 31 October 2016 to prepare the CIT Report setting out the DTC’s position. To ensure that the recommendations made in the CIT Report are practical, the DTC has taken South Africa’s current economic position, as well as its future outlook into consideration. The DTC is cognisant that in the context of low economic growth, it is critically important to ensure that taxes are raised in a manner that is as least disruptive to economic growth and employment as possible.
The efficiency of the CIT rate
In 1997, the Katz Commission specified that a residence based system of taxation in South Africa would carry the danger of promoting the export of South African human capital and contributing to an undeveloped South African multi-national sector. However, despite the recommendations made by the Katz Commission, a residence based system was introduced into South Africa’s income tax system for the years of assessment commencing on or after 1 January 2001.
Please click here to read more.
This article first appeared on cliffedekkerhofmeyr.com.