Draft Documents for Public Comment – Due Date Passed

All comments received on drafts are considered in full, but due to time constraints, no individual correspondence will be entered into. The identity of commentators and their comments will be collected and may be disclosed publicly, either in full or in summary, as legal obligation dictates or is necessary for SARS to properly perform its duties.
 
The draft documents are categorised according to their due date for comment. Comments may be emailed to the address indicated in the last column.  
 
Due date was for:Legislation CategoryType of Draft & Description

30 April 2024

Customs and Excise Act, 1964

Draft Amendments to Schedules

Draft amendments to Schedule – Note 8 to Schedule No. 5

Comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet.

Explanatory Note
Item 541.01 was inserted to provide for specific drawbacks and refunds of customs duties paid on imported fuel levy goods upon the subsequent export or removal thereof to BELN.

Note 8 to Schedule No. 5 is amended to include the reference to refund item 541.01 so that the item can also comply to the requirement of Note 8.

 

31 March 2024

National Legislation

2024 Draft Tax Bills and Draft Global Minimum Tax Bills

Explanatory Note
The National Treasury and the South African Revenue Service (SARS) today publish, for public comment, the 2024 Draft Rates Bill (2024 Draft Rates Bill), the 2024 Draft Revenue Laws Amendment Bill, the Draft Global Minimum Tax Bill and the Draft Global Minimum Tax Administration Bill.

As per the media statement, the 2024 Draft Rates Bill contains announcements made in Chapter 4 and Annexure C of the 2024 Budget Review that deal with the increase of excise duties.

The 2024 Draft Revenue Laws Amendment Bill is aimed largely at clarifying the existing language and to simplify the directives system for both administrators and SARS to allow for an efficient implementation of the ‘two-pot’ retirement reform.

The Draft Global Minimum Tax Bill is aimed at implementing the GloBE Model Rules in South Africa to enable South Africa to impose a multinational top-up tax at a rate of 15 per cent on the profits of in-scope multinational enterprise groups. The Draft Global Minimum Tax Administration Bill is aimed at the administration of the Draft Global Minimum Tax Bill.

More general information underlying the draft legislation can be found in the 2024 Budget Review, available on the National Treasury website.

Date published: 21 February 2024

 

Due date extended to 29 March 2024

1 March 2024

 

Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The proposed amendment provides that the SAD 500 or SAD 505 forms be regarded as an application for permission for the transfer of ownership of dutiable goods in a customs and excise warehouse.

Date published: 8 February 2024

 

15 March 2024

Income Tax Act, 1964

Draft Interpretation Note

Draft Interpretation Note – Consequences of an employer’s failure to deduct or withhold employees tax

Explanatory Note
This Note explains how certain of the employees’ tax obligations of an employer and the income tax obligations of an employee operate in relation to each other when an employer incurs personal liability for failing to deduct or withhold employees’ tax.

Date published: 16 February 2024

 

Due date extended to 23 February 2024

9 February 2024

Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
Draft rules are inserted under sections 40 and 41 to provide for the manner in which bills of entry may be adjusted where customs value is affected by transfer pricing adjustments.

Date published: 19 January 2024

Updated: 9 February 2024

 

9 February 2024Income Tax Act, 1962

Draft Guide

Draft Guide – Solar Energy Tax Credit Provided under Section 6C

Explanatory Note
Section 6C, applicable to natural persons, has been introduced in an attempt to alleviate the pressure on the national grid and to improve energy efficiency in South Africa. This guide discusses the requirements that have to be complied with to claim the incentive under section 6C.

Date published: 26 January 2024

 

12 January 2024Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The draft amendment relates to the insertion of rules under sections 21 and 60. The rules provide for the storage of imported fuel levy goods in special customs and excise storage warehouses and for licensing of marine removers of fuel levy goods.

The DA 185 has been amended to insert a tick box for licensing of a marine remover of fuel levy goods.

Annexure DA 185.4B4 has been amended to insert tick boxes for the licensing of land-based storage of imported fuel levy goods and sea-based storage of imported distillate fuel.

A new annexure DA 185.4B17 is inserted for licensing of a marine remover of fuel levy goods.

Date published: 11 December 2023

27 November 2023Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The DA177 account is used by licensees (local motor manufacturers) to bring carbon dioxide levy to account on a quarterly basis. The proposed amendment to the form inserts fields for the overpayment and underpayment of levy which is governed by section 77(a)(i) of the Customs and Excise Act, 1964. These fields are necessary to effect the adjustments resulting from errors on previous accounts on the current account.

Date published: 14 November 2023

 

20 November 2023Customs and Excise Act, 1964

Draft Amendments to Schedules

Amendments to Part 1 of Schedule No. 1 –Insertion of Additional Note 8 to Chapter 22

Comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet.

Explanatory Note
Chapter 22 in Part 1 of Schedule No. 1 is being amended by the insertion of Additional Note 8, in order to clarify that fermented fruit beverages and mead are limited to beverages that are the end product of fermentation of fruit and honey, whether or not flavoured during or after the fermentation, but not mixed with any other beverages.

Date published: 20 October 2023

 

3 November 2023Customs and Excise Act, 1964

Draft Amendments to Schedules

Comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet.

Explanatory Note
Nut juices have been included with HS 2022 and the amendment is therefore implemented with retrospective effect from 1 January 2022.

Date published: 20 October 2023

 

3 November 2023Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The draft amendments provide for requirements for authorised dealers in relation to advance import payments, it further enables authorised dealers to issue bank generated advance import payment reference numbers (BGA reference numbers) in certain circumstance,  provides for requirements and procedures for authorised dealers when issuing BGA reference numbers as well as for requirements for importers where authorised dealers issued BGA reference numbers.

Date published: 19 October 2023

 

3 November 2023

 

Value-Added Tax Act, 1991

Draft Binding General Ruling

Draft Binding General Ruling 16 (Issue 3) – Standard Turnover-based Method of Apportionment

Explanatory Note
This BGR prescribes the method to be used in determining the ratio contemplated in section 17(1).

Date published: 13 October 2023

 

3 November 2023

Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The proposed amendments provide for electronic submission of the application for accredited client status via eFiling.

Date published: 13 October 2023

 

Extended to 17 October 2023

10 October 2023

 

Customs and Excise Act, 1964

Draft Amendments to Schedule

The following draft amendments are proposed to Part 1 of Schedule No. 1:

Comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet.

Explanatory Note
An updated explanatory memorandum has been added to the draft notices explaining all the different proposed amendments.

Date published: 1 and 18 September 2023

 

13 October 2023

Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The proposed amendments provide for –

  • substitution of the 12 block SADC certificate of origin with the 13 block SADC certificate of origin and alignment with the instructions for the completion of the boxes on the reverse side of the 13 block SADC certificate of origin;
  • insertion of provisions under the SACUM-UK trade agreement that are similar to other trade agreement related rules including introductory provisions and registration and licensing provisions; and
  • technical related amendments.

Date published: 29 September 2023

 

22 September 2023

Mineral and Petroleum Resources Royalty Act, 2008

Draft Interpretation Note

Draft Interpretation Note – Determining the calorific value of coal for purposes of the royalty

Explanatory  Note
This Note clarifies at which stage, that is, as-received or air-dried, the condition specified for coal in Schedule 2 must be determined for the calculation of the royalty.

Date published: 24 August 2023

 

15 September 2023

Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note 78 (Issue 2) – Allowance for future expenditure on contracts

Explanatory Note
This Note provides guidance on the interpretation and application of section 24C when income is received in advance while the expenditure under the contract will only be incurred in a subsequent year of assessment. The Note has been updated for relevant case law and relevant amendments up to and including the Taxation Laws Amendment Act 20 of 2022, the Tax Administration Laws Amendment Act 16 of 2022, and the Rates and Monetary Amounts and Amendment of Revenue Laws Act 19 of 2022.

Date published: 21 July 2023

 

6 September 2023

Customs and Excise Act, 1964

Draft Amendment to Rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The proposed amendments provide for the electronic submission of applications for drawbacks and refunds by eFiling or electronic data interchange (EDI) and the disclosure of customs and excise relationships.

Date published: 28 August 2023

 

31 August 2023

National Legislation

2023 Budget Draft Tax Bills and Draft Regulations

National Treasury and SARS today, publish for public comment, the following documents:

Explanatory Note
See the joint Media Statement, announcing the publication of the 2023 Draft Tax Bills and Regulations, for public comment, providing an overview of the abovementioned documents, and outlining the process to follow to submit comment.

Date published: 31 July 2023

 

For information only

National Legislation

Draft Bill

The 2023 Draft Rates and Monetary Amounts and Amendment of revenue Laws Bill has been introduced in the National Assembly by the Minister of Finance on 22 February 2023

Date Published:  22 February 2023

 

21 July 2023

Customs and Excise Act, 1964

Draft Rule Amendments

  • Amendment to rules under sections 47B and 120 – Air passenger tax
  • APT 101 – Air Passenger Tax: Agent’s application for registration / cancellation or changing of registered particulars
  • APT 102 – Air Passenger Tax: Operator’s application for registration / cancellation or changing of registered particulars
  • APT 201 – Air Passenger Tax Return

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The proposed amendment provides for the electronic submission for documents for registration of an operator. The APT forms will also be inserted in the Schedule to the Rules.

Date published: 10 July 2023

 

15 July 2023

Customs and Excise Act, 1964

Draft Schedule Amendments

The following draft amendments are proposed to Schedule No. 5, to provide for refunds or drawbacks of duties upon export of imported fuel:

Comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet.

Date published: 30 June 2023

 

15 July 2023

National Legislation

Draft Bills and Explanatory Memoranda

Explanatory Note
National Treasury and SARS publish today, for comment, the revised 2023 Draft Revenue Laws Amendment Bill and 2023 Draft Revenue Administration and Pension Laws Amendment Bill. These draft bills provide the necessary legislative amendments required to implement the first phase of the “two-pot” retirement system, they also take into account public comments received on the 2022 Draft Revenue Laws Amendment Bill published on 29 July 2022, and make provision for the name change from the word “pot” to the word “component” in the bills to be introduced formally by the Minister in Parliament. However, the word “pot” is still used in the colloquial form to describe the reform itself.

See the joint media statement for more details about the key proposals incorporated in the revised 2023 Draft Revenue Laws Amendment Bill, and consequential legislative amendments to the Pension Funds Act 24 of 1956, as outlined in the 2023 Draft Revenue Administration and Pension Laws Amendment Bill, to ensure the smooth implementation and administration of the “two pot” retirement system. changes.

Date published: 9 June 2023

 

30 June 2023

Income Tax Act, 1962

Draft Guide

Draft Guide – Tax Treatment of the Net-billing Tariff System for Excess Power Generated

Explanatory Note
This guide provides general guidance on the tax treatment of credits due to taxpayers for excess power generated from renewable energy sources and exported via the grid. Guidance is also provided on the tax treatment of the various expenses that are incurred by the taxpayer in generating such electricity.

Date published: 15 June 2023

 

23 June 2023

Customs and Excise Act, 1964

Draft Schedule Amendment

Draft amendment to Part 1 of Schedule No. 1 – Substitution of Additional Note 6(a) to Chapter 22

Comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet.

Explanatory Note
Chapter 22 in Part 1 of Schedule No. 1 is being amended by the substitution of Additional Note 6(a), in order to amend the definition of products classifiable in tariff   subheading 2206.00.19 as limited to other fermented beverages that are manufactured from a liquor (wort) of non-malted milled cereals listed in the table in Chapter Note 2 to Chapter 11, provided the fermentable sugars are derived solely from the liquor (wort) without the addition of any other sugars during or prior to fermentation.

Date published: 2 June 2023

 

For information purposes only

Income Tax Act, 1962

Postponement of withdrawal of Practice Notes 31 of 1994 and 37 of 1995

Explanatory Note
The Practice Notes, which SARS intends withdrawing, can be accessed by clicking on the links below:

In view of the Budget announcement, the withdrawal of these two Practice Notes is postponed to 1 March 2024.

Date Published: 22 February 2023

 

15 May 2023

National Legislation

Draft Bill and Explanatory Memorandum

Explanatory Note
The National Treasury and the South African Revenue Service (SARS) today publish, for public comment, the draft legislative amendments to give effect to the two renewable energy tax incentives, announced in the 2023 Budget. These proposals assist in partially addressing the country’s energy crisis and encourage private investment into expanding electricity generation.

This initial batch of the 2023 draft Taxation Laws Amendment Bill (TLAB) covers these two specific tax amendments, and are urgent, due to the proposed early effective dates for implementation, and to enhance certainty for individuals and businesses that would like to immediately invest in renewable energy.

Date published: 21 April 2023

 

14 May 2023

Employment Tax Incentive Act, 2013

Draft Interpretation Note

Draft Interpretation Note – Meaning of “employee” for purposes of the Employment Tax Incentive Act

Explanatory Note
This draft Note provides clarity on the interpretation and application of the definition of “employee” in the Employment Tax Incentive (ETI) Act, 2013. The scope of this draft Note is restricted to arrangements entered into by parties, typically as part of a composite arrangement, in an attempt to claim the ETI for persons not meeting the definition of “employee”, specifically arrangements involving learning institutions. The draft Note therefore does not consider other scenarios in which the definition of “employee” is critical for purposes of claiming the ETI. This draft Note which was previously published as a draft for comment, has been updated with the latest amendments introduced by the Taxation Laws Amendment Act 20 of 2021.

Date published: 30 March 2023

 

14 May 2023

Employment Tax Incentive Act, 2013

Draft Guide

Explanatory Note
The Employment Tax Incentive (ETI) Act, 2013  has been introduced to provide an incentive in order to encourage employment creation. The ETI commenced on 1 January 2014 and will end on 28 February 2029. This Act has since been amended on a number of occasions. This guide provides general guidance on the incentive.

In order to curb apparent abuse of the ETI, amendments to the definition of “employee”, “monthly remuneration” and section 6 (qualifying employees) were introduced by the Taxation Laws Amendment Act 20 of 2021.  These amendments are effective from 1 March 2022 and applicable in respect of years of assessment commencing on or after that date. This guide discusses these amendments.

Date published: 30 March 2023

 

3 May 2023

Due date extended to 12 May 2023

 

Customs & Excise Act, 1964

Draft Schedule Amendments

Comments on the schedule to be recorded on Customs & Excise Tariff Amendments Comment Sheet.

Draft Forms Amendments

  • DA 185 – Application forms: Registration / Licensing of Customs and Excise clients
  • DA 185.4A3 – Registration client type 4A3 – Rebate/refund user (Schedule No’s 3, 4 and 6)

Comments on forms to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
Government implemented the diesel refund system in 2000 to provide full or partial relief for the general fuel levy and the Road Accident Fund (RAF) levy to primary sectors. The refund system is in place for the farming, forestry, fishing and mining sectors. In light of the current electricity crisis, a similar refund on the RAF levy for diesel used in the manufacturing process (such as for generators) will be extended to the manufacturers of foodstuffs. The refund provision will be implemented for two years with effect from 1 April 2023 until 31 March 2025. The refund payments will take place once the system is developed. This relief is implemented to limit the impact of power cuts on food prices.

Amendments to the DA 185 and the DA 185.4A3 are also proposed. These are consequential amendments.

Date published: 19 April 2023

 

3 May 2023

Customs & Excise Act, 1964

Draft Amendment to Rules

Comments to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The draft amendment to the rules pertains to the place of submission for the processing of documents relating to trade agreements.

Publication date: 19 April 2023

 

21 April 2023

Customs and Excise Act, 1964

Draft Amendments to Form

  • DA 185 – Application forms: Registration / Licensing of Customs and Excise clients

Comments to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The proposed amendment to the DA 185 form inserts a new box for consent by the applicant for information sharing with other government agencies.

Date published: 3 April 2023

 

21 April 2023

Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The draft amendments to the rules provide for the publication of tariff determinations and include the circumstances in which information relating to tariff determinations may be published, information that may be published and manner of publication and binding effect.

Date published: 3 April 2023

 

14 April 2023

Tax Administration Act, 2011

Draft Notice

Returns of information to be submitted by third parties in terms of section 26 of the Tax Administration Act, 2011 (Act No. 28 of 2011)

Date published: 29 March 2023

 

6 April 2023

National Legislation

Draft Notice

See Media statement

Explanatory Note
The Draft Notice, as published by National Treasury and SARS, aims to ensure that there is a consistent tax treatment in respect of all bulk payments by providing a tax exemption in terms of Paragraph 2D of the Second Schedule to the Act in respect of bulk payments made by the fund administrators to former members of closed retirement funds, provided that they meet all the requirements listed below:

  • Bulking settlement payments relate to amounts that became due and payable by the administrator of retirement funds to the retirement funds before 1 January 2009; and
  • Such bulk payments have not been allocated due to the fact that the funds have been deregistered; and
  • The administrator of retirement funds has entered into an agreement with the Financial Sector Conduct Authority to make such bulk payments directly to the former members of the deregistered funds.

Date published: 3 April 2023

 

31 March 2023

Customs and Excise Act, 1964

Draft Amendments to Rules

Comments to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note

The proposed amendments relate to various aspects of the internal administrative appeal rules under section 77H.

Date published: 10 March 2023

 

24 March 2023

Due date extended to 31 March 2023

Customs & Excise Act, 1964

Draft Schedule amendments

  • Draft amendment to Part 3 of Schedule No. 6 – Insertion of Note 14 and refund item 670.05/00.00/01.00 (updated to include two additional definitions, namely, “electricity generation” and “manufacturing premises”, and some textual changes)

Comments on the schedule to be recorded on Customs & Excise Tariff Amendments Comment Sheet.

Draft Forms amendments

  • DA 185 – Application forms: Registration / Licensing of Customs and Excise clients
  • DA 185.4A3 – Registration client type 4A3 – Rebate/refund user (Schedule No’s 3, 4 and 6)

Comments on forms to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
Government implemented the diesel refund system in 2000 to provide full or partial relief for the general fuel levy and the Road Accident Fund (RAF) levy to primary sectors. The refund system is in place for the farming, forestry, fishing and mining sectors. In light of the current electricity crisis, a similar refund on the RAF levy for diesel used in the manufacturing process (such as for generators) will be extended to the manufacturers of foodstuffs. The refund provision will be implemented for two years with effect from 1 April 2023 until 31 March 2025. The refund payments will take place once the system is developed. This relief is implemented to limit the impact of power cuts on food prices.

Amendments to the DA 185 and the DA 185.4A3 are also proposed. These are consequential amendments.

Date published: 10 March 2023

 

24 February 2023Customs & Excise Act, 1964

Draft Rule Amendments

Comments to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
The draft form amendments implement the Budget 2022 carbon tax proposals in the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2022 and the Taxation Laws Amendment Act, 2022.

Date published: 6 February 2023

 

24 February 2023Customs & Excise Act, 1964

Draft Rule Amendments

Comments to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
Government proposed a flat excise duty rate of R2.90/ml for both nicotine and nicotine-substitute solutions in Schedule 1 Part 2A of the Customs and Excise Act. This was published in the Taxation Laws Amendment Act, 2022 dated 5 January 2023.

The proposed rule and form amendments relate to the administration of the tax which will be implemented on 1 June 2023. 

Please note that the current publication for comment relates to the draft rules and forms under the Customs and Excise Act, 1964, for the administration of the excise duty on vaping liquids. The imposition of the excise duty on these products and the rate at which it would be taxed are policy decisions that were consulted through the Taxation Laws Amendment Act, 2022, process through Parliament. The current publication of the draft rules and forms are meant to elicit comments on the proposed administration and are not a re-opening of the earlier policy debate. Stakeholders are therefore requested to please comment specifically on the proposed administration of the excise duty on these products and not on the policy aspects that were previously considered. 

Date published: 3 February 2023

 

20 February 2023Customs & Excise Act, 1964

Draft Rule Amendments

Comments to be recorded on the Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
An amendment to rule 19A4.01(b)(ii) is published for comment to clarify that a special customs and excise storage warehouse for the storage of locally manufactured fuel levy goods contemplated in section 19A may remove such goods to the BELN countries or for export including ship stores.

Date published: 6 February 2023

 

13 January 2023Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note – Definition of “associated enterprise”

Explanatory Note
This Note, “Definition of ‘Associated Enterprise’ ”, provides guidance on the interpretation and application of the definition of “associated enterprise” in section 31(1). The inclusion of an “associated enterprise” in section 31 comes into operation on 1 January 2023 and applies in respect of years of assessment commencing on or after that date.

Date published: 14 October 2022

 

15 December 2022Income Tax Act, 1962

Withdrawal of Practice Notes 31 of 1994 and 37 of 1995

Explanatory Note
The Practice Notes, which SARS intends withdrawing, can be accessed by clicking on the links below:

9 December 2022Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
This Note provides guidance on the interpretation and application of section 12Q, which provides for an exemption from normal tax, capital gains tax, dividends tax and withholding tax on interest for an international shipping company meeting the requirements of the section.

Date published: 31 October 2022

5 December 2022

Income Tax Act, 1962

Draft Notice

  • Draft Notice – Listing further information that must be included on a receipt issued in terms of section 18A(2)(a) of the Act

See the explanatory note.

Date published: 18 November 2022

 

2 December 2022

Value-Added Tax Act, 1991

Draft Binding General Ruling

Draft Binding General Ruling – Value-Added Tax treatment of rounding difference in cash transactions

Explanatory Note
This binding general ruling sets out the circumstances and conditions under which a supplier need not issue a credit note and the input tax consequences for the recipient vendor when a rounding difference occurs as a result of a cash transaction.

Date published: 31 October 2022

 

1 December 2022

Customs & Excise Act, 1964

Draft Schedule Amendment 

Comments to be recorded on Customs & Excise Tariff Amendments Comment Sheet.

Explanatory Note
The draft amendment is proposed to Chapter 30 in Part 1 of Schedule No. 1 to the Customs and Excise Act as follows:

  • The Department of Trade, Industry and Competition made a request to SARS for the creation of new tariff subheadings for vaccines used in the Expanded Programme on Immunisation for both national and provincial Departments of Health.

Date published: 17 November 2022

 

25 November 2022

Income Tax Act, 1962

Draft guide

Explanatory Note
This guide is a general guide regarding the taxation of farming operations in South Africa. The main aim of this guide is to highlight the direct tax consequences for persons conducting such operations.

Date published: 22 September 2022

 

7 November 2022

National Legislation

Draft notice

See media statement.

Date published: 7 October 2022

 

1 November 2022

Customs & Excise Act, 1964

Draft amendment to rules

Comments to be recorded on Customs & Excise Rule Amendments Comment Sheet.

Explanatory Note
See Explanatory Note.

Date published: 8 November 2022

 

1 November 2022

Customs & Excise Act, 1964

Draft amendment to schedule

Comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet

Explanatory Note
The description of Additional Note 5(c)(i) is being amended to provide for the usage of grape juice in the manufacture of ciders as prescribed in the Regulations to the Liquor Products Act 60 of 1989.

Date published: 4 October 2022

 

14 October 2022

Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note 112 (Issue 2) – Section 18A – Audit certificate

Explanatory Note
This Note provides guidance on the interpretation and application of section 18A(2B) and (2C) in relation to the audit certificate that must be obtained and retained in specified circumstances for section 18A receipts issued by an approved organisation or a department. Guidance is provided on what would be regarded as acceptable information on an audit certificate and from whom such a certificate may be obtained. The Note has been updated to specifically emphasise that the person issuing the audit certificate is not limited to a registered auditor as defined in the Auditing Profession Act, however, that person must be independent of the approved organisation, suitably qualified, and appropriate work must have been performed to enable that person to provide the required confirmation on the use of donations for which section 18A receipts were issued in the audit certificate.

Date published: 13 September 2022

 

3 October 2022

10 October 2022

Customs & Excise Act, 1964

Draft amendments to schedules

The draft amendments are proposed in Part 1 of Schedule No. 1, Schedule Nos 4 and 6 to the Customs and Excise Act as follows:

Comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet

See amended explanatory memorandum.

Dates published: 19 September 2022 and 30 September 2022

 

7 October 2022Value-Added Tax Act, 1991

Draft Interpretation Note

Explanatory Note
This Note provides clarity on the VAT treatment of debt collection activities, whether undertaken by credit providers, in-house or outsourced to external debt collectors. In particular, this Note examines the VAT treatment of the prescribed amounts recovered by the debt collector from the debtor under the Debt Collectors Act, 1998.

Date published: 9 September 2022

 

16 September 2022Income Tax Act, 1962

Draft Interpretation Note

  • Draft Interpretation Note – Exemption for international aid received or accrued under an official development assistance agreement

Explanatory Note
This Interpretation Note provides guidance on the application of section 10(1)(yA) and the requirements that have to be met before an exemption can apply on amounts received by or accrued to a person in consequence of an Official Development Assistance (ODA) agreement.

Date published: 1 August 2022

 

9 September 2022Customs & Excise Act, 1964

Draft rule and amendment to form

Comments to be recorded on Customs & Excise Rules and Schedules Comment Sheet.

Explanatory Note

The proposed amendment to the SAD 502 and SAD 505 substitutes the heading of the forms. Amended rule 00.05 read with new rule 44.05 is consequential related to the amendment of section 44(5)(e). The amendments extend the purpose of the forms for use by declarants who wish to appoint a licensed remover of goods in bond as envisaged in section 44(5)(e).

Date published: 31 August 2022

 

29 August 2022National Legislation

2022 Draft Tax Bills 

Explanatory Note As per the media statement, the 2022 Draft Rates Bill was first published on Budget Day (25 February 2022) and gives effect to the tax proposals announced in Chapter 4 of the 2022 Budget dealing with changes to the rates and monetary thresholds to the personal income tax tables and increases of the excise duties on alcohol and tobacco. It has been revised to include changes tabled by the Minister in Parliament on 31 March 2022 and 31 May 2022 regarding temporary relief on the fuel levy as well as the postponement of the effective date of an inflationary increase in the health promotion levy of 4,5 per cent to 2.31 cents per gram of sugary beverages with more than 4 grams of sugar per 100 ml from 1 April 2022 to 1 April 2023. The 2022 Draft Revenue Laws Amendment Bill contains proposed amendments dealing with the “two pot” retirement system. The proposed amendments give effect to the previous announcements made by the Minister in the February 2021 Budget Speech and November 2021 Medium Term Budget Policy Statement. These amendments also follow a discussion document published by National Treasury for public comment on 15 December 2021, titled “Encouraging South African households to save more for retirement”. The 2022 Draft TLAB and 2022 draft TALAB contain the remainder of the tax announcements made in Chapter 4 and Annexure C of the 2022 Budget Review, which are legislatively more complicated and require greater consultation with the public. Key proposals included in the 2022 draft TLAB are the following:

  • Progressive increase in the carbon tax rate for 2023 to 2030
  • Vaping: Taxation of electronic nicotine and non-nicotine delivery systems
  • Extension of the Research and Development tax incentive sunset date
  • Impact of IFRS17 insurance contracts on the taxation of insurers
  • Reviewing the debtor’s allowance provisions to limit the impact on lay by arrangements

Key proposals included in the 2022 draft TALAB are the following:

  • Advance rulings under the Customs and Excise Act
  • Imposition of understatement penalty for employment tax incentives improperly claimed
  • Addressing tax compliance status system abuse

Date published: 29 July 2022

26 August 2022 Customs & Excise Act, 1964

Draft rules and schedule amendment

Comments to be recorded on Customs & Excise Rules and Schedules Comment Sheet. 

Explanatory Note
The draft rules inserted under sections 64F, 75 and 120 relate to the eFiling of applications for drawbacks and refund.

Date published: 12 August 2022

1 July 2022Customs & Excise Act, 1964

Draft Schedule Amendment

The draft amendment is proposed to Part 1C of Schedule No. 6 to the Customs and Excise Act as follows:

Please record your comments on the Customs & Excise Tariff Amendments Comment Sheet

Explanatory Note
The rebate items are being amended to reflect the correct tariff items for unfortified wine being tariff items 104.15.03, 104.15.13 and 104.15.21.

Date published: 15 July 2022

 

29 July 2022 Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note – Mining Rehabilitation Company or Trust: Deductibility of Amounts Paid and Compliance with Section 37A

Explanatory Note
Mining companies in South Africa are required to make financial provision under the Mineral and Petroleum Resources Development Act 28 of 2002 read with National Environmental Management Act 107 of 1998 for the rehabilitation of mining areas covered by its mining permit. Persons making a cash contribution to a mining rehabilitation company or trust as contemplated in section 37A may qualify for a deduction in determining taxable income for any year of assessment commencing on or after 2 November 2006 if certain requirements are met.

The Interpretation Note provides guidance on the interpretation and application of section 37A which deals with payments made by persons to a mining rehabilitation company or trust where that company or trust has been established for the purposes of conducting rehabilitation upon the closure of a mine and the cessation of mining activities. This rehabilitation is to also cover any latent and residual environmental impacts of the mining activities.

The Note also discusses the special tax relief provided for persons contributing cash to a mining rehabilitation company or trust, as well as specific anti-avoidance rules designed to prevent misuse or abuse of those provisions.

Date published: 22 February 2022

1 July 2022Tax Administration Act, 2011

Draft Interpretation Note

Draft Interpretation Note – Persons not Eligible to Register as a Tax Practitioner and Deregistration of Registered Tax Practitioners for Tax Non-compliance

Explanatory Note
This Note provides guidance on when, due to non-compliance, a person may not register as a tax practitioner, and when SARS must deregister a registered tax practitioner, as well as the period of non-qualification for registration.

Date published: 7 June 2022

 

27 June 2022
12 June 2022
Customs & Excise Act, 1964

Amendment to Schedule

The draft amendment is proposed to Part 1 of Schedule No. 1 to the Customs and Excise Act as follows:

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
Chapter 87 in Part 1 of Schedule No. 1 is being amended by the insertion of Additional Notes 5 and 6, in order to provide clear guidance of what constitutes an incomplete bicycle having the essential character of a complete bicycle of heading 87.12.

Date published: 12 May 2022

24 June 2022Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note – Recoupment of Amounts Deducted or Set Off when an Asset Commences to be Held as Trading Stock which was Previously not so Held

Explanatory Note
This draft interpretation note provides guidance on the interpretation and application of section 8(4)(k)(iv) that applies when any asset on which an allowance or deduction under a provision referred to in section 8(4)(a) has been granted, commences to be held as trading stock.

With effect from 15 January 2020 section 8(4)(k) was amended by the insertion of subparagraph (iv) to make provision for the recoupment of amounts previously granted as a deduction where any person commenced to hold an allowance asset as trading stock which was previously not held as trading stock. The purpose of the amendment is to recoup the allowances in the year of assessment when the asset is commenced to be held as trading stock. Section 8(4)(k)(iv) only applies to the amounts stipulated under section 8(4)(a).

Date published: 22 February 2022

 

27 May 2022Customs & Excise Act, 1964

Draft Amendment to Rules

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
The proposed amendment provides clarity on the submission of registration applications by electronic users for electronic data interchange (EDI) or eFiling.

Date published: 13 May 2022

 

27 May 2022Customs & Excise Act, 1964

Draft Amendment to Form

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
The SAD 500 – customs declaration is the single administrative document used by customs and excise clients for the clearance of goods.

The current manual SAD 500 does not provide a box for the importer or agent to declare details of the licensed remover of goods in bond.

The proposed amendment to the manual SAD 500 inserts new boxes 8C for carrier (licensed remover of goods in bond) and 8D for Trader Identification Number (TIN). This amendment is consequential to the amendment of section 44 providing for licensed removers of goods in bond to transport containerised goods from container terminals before they are released, for purposes of examination as contemplated in section 4(8A).

Date published: 13 May 2022

 

27 May 2022Tax Administration Act, 2011

Draft Interpretation Note

Draft Interpretation Note –Understatement Penalty: Meaning of “Maximum Tax Rate applicable to the Taxpayer” under Section 222(5) of the Tax Administration Act

Explanatory Note
The Tax Administration Act (TA Act) provides for the imposition of an understatement penalty where a taxpayer has made an understatement as defined in section 221 of that Act, except in the case of a bona fide inadvertent error. The main purpose of the understatement penalty is to deter behaviours that result in non-compliant reporting and aims at ensuring consistent and equal treatment of taxpayers in comparable circumstances.

The understatement penalty is levied on each shortfall in tax. Section 222(5) provides that the tax rate applicable to the shortfall must be the “maximum tax rate applicable to the taxpayer” ignoring an assessed loss or any other benefit brought forward from a preceding tax period to the tax period. There is uncertainty as to how the phrase “maximum tax rate applicable to the taxpayer” may be applied to a taxpayer that has made an understatement and is in an assessed loss position after the correction of the understatement.

The Note provides clarity on the interpretation and application of the phrase “maximum tax rate applicable to the taxpayer” used in section 222(5) when the tax rate applicable to the shortfall determined under subsections (3) and (4) is applied.

Date published: 22 February 2022

 

25 May 2022Customs & Excise Act, 1964

Draft Amendment to Rules

  • Draft amendment to the rules under section 120 – Kosi Bay

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
The draft amendment proposes amendment to the prescribed official hours of attendance and hours of business at Kosi Bay which was erroneously indicated as 07:00 – 17:00

Date published: 11 May 2022

 

13 May 2022Customs & Excise Act, 1964

Draft Amendment to Forms

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note

The DA 185.4B1 is completed by a person applying for the licensing of a special manufacturing warehouse.

Excise duties are payable by licensees on the DA 260 account for traditional African beer.

As a result of the Minister of Finance’s announcement in his 2022 Budget on the taxing of alcohol powder products, the form and account are being amended to insert alcohol powder products.

Date published: 28 April 2022

 

13 May 2022Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note – Public Benefit Activity: Bid to Host or Hosting any International Event

Explanatory Note
This Note provides guidance on the interpretation and application of public benefit activity (PBA) 11(b) relating to the bid to host or hosting of any international event approved by the Minister having regard to specified prescribed criteria.

The bid to host or hosting of any international event exposes South Africa on an international level by providing public pride in hosting such an event, attracting overseas visitors, changing perceptions about South Africa as a business and leisure destination and providing an inflow of funds. These benefits can be realised on a tax beneficial basis when the Minister approves an international event for purposes of PBA 11(b) and the Commissioner approves the organisation bidding to host or hosting that international event as a public benefit organisation (PBO) under section 30(3).

This Note does not consider any other taxes (capital gains tax, donations tax, value-added tax) or duties (transfer duty or customs and excise) the bid to host or hosting of any international event may attract, or for which exemption may be required.

Date published: 22 February 2022

 

13 May 2022Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note – Public Benefit Organisations: Provision of Residential Care for Retired Persons

Explanatory Note
This Note provides guidance on the interpretation and application of PBA 3(c) relating to the provision of residential care for retired persons.

Date published: 22 February 2022

 

29 April 2022Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note – Determination of the Taxable Income of Certain Persons from International Transactions: Intra-group Loans

Explanatory Note
This Note, Determination of the Taxable Income of Certain Persons from International Transactions: Intra-group Loans, provides taxpayers with guidance on the application of the arm’s length principle in the context of the pricing of intra-group loans. The pricing of intra-group loans includes a consideration of both the amount of debt and the cost of the debt.

An intra-group loan would be incorrectly priced if the amount of debt funding, the cost of the debt or both are excessive compared to what is arm’s length. The Note also provides guidance on the consequences for a taxpayer if the amount of debt, the cost of debt or both are not arm’s length.

The guidance and examples provided are not an exhaustive discussion of every issue that might arise. Each case will be decided on its own merits taking into account its specific facts and circumstances.

A Note was released as a draft in 2013 and 2017. Due to changes in legislation (for example, changes to the secondary adjustment mechanism), changes to the content of the Note in terms of additional detail and the inclusion of new sections (for example, the interaction between section 31 and section 23M, section 23N and the interest withholding tax provisions) and the release of the OECD Transfer Pricing Guidance on Financial Transactions in 2020, this latest draft is issued for comment.

Date published: 11 February 2022

 

31 March 2022Income Tax Act, 1962

Draft Interpretation Note

Draft Interpretation Note – Sale and Leaseback Arrangements and Related Simulated Transactions

Explanatory Note
This Note provides guidance on the application of sections 23D and 23G to certain sale and leaseback arrangements. The Note does not address sale and leaseback arrangements in general and takes into account simulated transactions where loan agreement may be concealed and it is necessary to consider the true nature of such transactions.

Date published: 18 February 2022

25 March 2022Customs & Excise Act, 1964

Draft Rule Amendment

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
Draft rules under section 21 of the Customs and Excise Act, 1964 (the Act) in relation to special shops for diplomats were inserted in June 2021.

Prior to the 2021 amendment diplomats could purchase motor vehicles and enter it under a rebate of duty from a customs and excise storage warehouse.

The proposed amendment provides for an exclusion on the rule that no person may sell goods free of duty to persons entitled to diplomatic immunities or privileges, unless the premises where such goods are sold are licensed as a special shop for diplomats. The effect of this proposed amendment is that the duty free sale of motor vehicles to diplomats by importers of motor vehicles entered for storage in customs and excise storage warehouses and by licensees of customs and excise manufacturing warehouses under the listed rebate items is enabled.

Date published:  3 March 2022

25 March 2022Value-Added Tax Act, 1991

Draft VAT Amendments

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
The amendment of rebate item 406.00 will allow for diplomats and other foreign representatives to purchase imported motor vehicles from a customs and excise storage warehouse.

The proposed amendment in Schedule No. 6 will allow for diplomats and other foreign representatives to purchase motor vehicles from a customs and excise manufacturing warehouse.

Date Published:  3 March 2022

25 March 2022Customs & Excise Act, 1964

Draft Schedule Amendment

The draft amendments are proposed to the Customs and Excise Act as follows:

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
The amendment of rebate item 406.00 will allow for diplomats and other foreign representatives to purchase imported motor vehicles from a customs and excise storage warehouse.

The proposed amendment in Schedule No. 6 will allow for diplomats and other foreign representatives to purchase motor vehicles from a customs and excise manufacturing warehouse.

Date published: 3 March 2022

18 March 2022Customs & Excise Act, 1964

Technical Amendments

The draft amendments are proposed in Part 1, 2B and 3E of Schedule No. 1, Schedule Nos. 2, 3, 5 and 6 to the Customs and Excise Act as follows:

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note

see Explanatory Memorandum

Date published: 18 February 2022

10 March 2022Customs & Excise Act, 1964

Draft Schedule Amendment

The draft amendments are proposed to Part 2 of Schedule No. 5 to the Customs and Excise Act as follows:

  • Substitute the title of Part 2 of Schedule No. 5 to include the reference to “and imported goods abandoned or destroyed”;
  • Substitute the header of refund item 522.00 to include the reference “and imported goods abandoned or destroyed; and
  • Insert Note No. 7 and rebate item 522.02/22.02/01.02 to provide for alcoholic beverages which, after entry for home consumption and payment of duty, have undergone post manufacturing deterioration (expired stock) and are returned to the original importer of the goods for destruction.

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
The proposed amendments will regulate refund item 522.02/22.00/01.02. The said refund item provides for alcoholic beverages which have undergone post-manufacturing deterioration (expired stock) as a result of a total ban on the selling of alcohol as published by Notice in the Government Gazette Notice No. 313 of 15 March 2020, for the duration of the national state of disaster declared in terms of section 27(1) of the National Disaster Management Act, 2002 (Act No. 57 of 2002).

Date published: 17 February 2022

9 March 2022Customs & Excise Act, 1964

Draft Schedule Amendment

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
Rebate item 621.21 provides for spirituous beverages, after removal from a secondary customs and excise manufacturing warehouse (VMS) after entry for home consumption and payment of duty, are found to be off specification or have become contaminated or have undergone post manufacture deterioration and are returned for destruction to a primary customs and excise manufacturing warehouse (VMP), secondary manufacturing warehouse (VMS), or other such place or facility as directed by the Commissioner; or for processing in a VMP, subject to the provisions of Note 9 to this section.

The provision is unnecessarily restrictive to both licensee and SARS with regards to the practicalities in the return of spirits to a VMP for destruction or reprocessing. Additionally, occasions arise when it is not possible for SARS staff to attend to the distraction processes.

Date published: 8 February 2022

4 March 2022Customs & Excise Act, 1964

Draft amendment to rules

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
Kosi Bay is currently appointed as a place for particular and limited purposes. This means that only persons may enter and leave the Republic through Kosi Bay.

The draft amendments propose –

  • the addition of Kosi Bay as a place of entry for customs and excise purposes;  
  • the deletion of Kosi Bay as a place for particular and limited purposes; and
  • prescribed official hours of attendance and business hours at Kosi Bay.

Date published: 11 February 2022

 

 4 February 2022Customs & Excise 1964 

Draft Amendment to Rules

Explanatory Note
The purpose of the draft Notice is twofold. Firstly, it proposes to amend rule 64E.19 of the rules under section 64E that came into effect on 23 July 2021. The amendment clarifies the validity period of accredited client statuses converted from Level 2 (as they were under the repealed rules) to Level 1 (under the current rules). The amendment also provides for the updating of information on request, in order to enable such converted clients to consent to information sharing for purposes of mutual recognition or co-ordinated interventions.

Secondly, a substantive provision of the Notice proposes to provide for a dispensation to clarify and legally regulate the position regarding accredited client statuses (granted under the repealed rules), that expired after the Covid-19 “lockdown” period up to 23 July 2021 (when the new rules came into effect). As determined by examining statuses granted under the repealed rules, the earliest date after the “lockdown” on which the affected statuses would have expired in terms of the repealed rules is 8 May 2020. The expiry date for purposes of the dispensation created by item 2 of the Notice is however calculated taking into account section 7(2)(a)(cc) of the DMTRAA, 2020, which in effect extends the date of 8 May 2020 to 12 June 2020.

Date published: 14 January 2022

14 January 2022Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
This draft interpretation note provides guidance on the interpretation and application of section 22B and paragraph 43A relating to the income tax treatment of extraordinary dividends on certain disposals and deemed disposals of shares by a company to prevent so-called “dividend stripping”.

Date published: 3 November 2021

 

10 December 2021Income Tax Act, 1962

Draft Guide

Explanatory Note
The voluntary disclosure programme (VDP) was introduced as a permanent measure to increase voluntary compliance in the interest of enhanced tax compliance, good management of the tax system and the best use of the SARS resources. The VDP is intended to encourage taxpayers to voluntarily disclose tax defaults. This draft guide provides general guidance on the VDP.

Date published: 20 October 2021

 

8 December 2021Customs & Excise Act, 1964

Draft Schedule  Amendment

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
Draft amendment is proposed in Part 1 of Schedule No. 1 to the Customs and Excise Act as follows:

  • Insert additional Note 2 in Chapter 11;
  • Substitute tariff subheading 1102.20; and
  • Insert 8-digit tariff subheadings 20.10 and 1102.20.90, to provide for Super fine maize meal.

The Minister of Finance announced in the 2021 Budget Review, under Annexure C, that super fine maize meal will also qualify to be supplied with value-added tax at the rate of zero per cent.

Date published: 10 November 2021

 

3 December 2021National Legislation

Draft Notice

Explanatory Note
Inviting Technical Tax Proposals for Annexure C of the 2022 Budget Review Proposals.

The National Treasury invites taxpayers, tax practitioners and members of the public to submit any technical proposals to improve or correct current tax legislation, including the closing of loopholes and technical matters applicable to the current tax legislation that require correction.

Date published: 16 November 2021

 

3 December 2021Employment Tax Incentive Act, 2013

Draft Interpretation Note

Explanatory Note
This draft interpretation note provides clarity on the interpretation and application of the definition of “employee” in section 1(1) of the Employment Tax Incentive (ETI) Act. The scope of this Note has been restricted to arrangements entered into by parties, typically as part of a composite arrangement, in an attempt to claim the ETI for persons not meeting the definition of “employee”, specifically arrangements involving learning institutions.

Date published: 2 November 2021

3 December 2021Customs & Excise Act, 1964

Draft Amendments to Forms

Substitution in item 202.00 of the Schedule to the Rules for the DA 260 tobacco products excise accounts

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
Excise Duties are payable on tobacco products on the DA 260 accounts for manufacturing (VM) and special storage (SOS) warehouses..

As a consequence of the implementation of HS 2022, the current DA 260 tobacco products excise accounts must be amended to reflect certain deletions and additions of fields.

Date published: 26 November 2021

 

19 November 2021Income Tax Act, 1962

Draft Guide

Explanatory Note
This guide provides general guidance on the approval of small business funding entities under section 30C, and taxation under section 10(1)(cQ). An entity will enjoy preferential tax treatment under section 10(1)(cQ) after it has been granted approval by the Commissioner under section 30C(1), and continues to comply with the relevant prescribed requirements as set out in the Act.

Date published: 16 September 2021

7 November 2021Customs & Excise Act, 1964

Draft Schedule Amendment

Explanatory Note
The draft amendment is proposed in Part 1 of Schedule No. 1 to the Customs and Excise Act as follows:

  • Insert additional Note 2 in Chapter 11; and
  • Insert tariff subheading 1101.00.40, to provide for Super fine maize meal

The Minister of Finance announced in the 2021 Budget Review, under Annexure C, that super fine maize meal will also qualify to be supplied with value-added tax at the rate of zero per cent.

Date published: 6 October 2021

 

 5 November 2021Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
This Note, which is being published for a second round of comment, provides guidance on the interpretation and application of the “funding” requirement contemplated in section 30B(2)(b)(ix), requiring that substantially the whole of an entity’s funding must be derived from its annual or other long-term members or from an appropriation by the government.

Date published: 16 September 2021

5 November 2021Customs & Excise Act, 1964

Draft Amendment to Rules

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
The Advance Import Payment (AIP) project is one of Customs’ modernisation initiatives. This project aims to bring together data from SARS, Authorised Dealers and the South African Reserve Bank (SARB) to increase regulatory controls relating to advance foreign exchange payments in order to prevent illicit financial flows and combat customs valuation fraud associated therewith.

Proposed rules under section 120(1)(mC) of the Act have been inserted providing for –

  • procedures for notifying Commissioner of intention to submit application for advance payment to authorised dealer;
  • issuing of advance payment notice (APN) reference number;
  • requirements for authorised dealers; and
  • communication through eFiling for purposes of advance payments.

Date published: 15 October 2021

 29 October 2021Tax Administration Act, 2011

Draft Interpretation Note

Explanatory Note
This draft interpretation note deals with the interpretation of the phrase “readily apparent undisputed error” in section 93(1)(d) of the Tax Administration Act for purpose of reduced assessments.

Date published: 16 August 2021

8 October 2021Income Tax Act, 1962

Draft Guide

Draft Tax Exemption Guide for Companies Wholly Owned by Institutions, Boards or Bodies

Explanatory Note
Section 10(1)(cA)(ii) provides for an absolute exemption from income tax of the receipts and accruals of any company all the shares of which are held by any institution, board or body provided the operations of such company are ancillary or complementary to the object of the institution, board or body. This draft Guide discusses the requirements for the exemption to apply.

Date published: 6 August 2021

8 October 2021Income Tax Act, 1962

Draft Guide

Explanatory Note
Section 10(1)(cA)(i) provide an absolute exemption from income tax of the receipts and accruals of any institution, board or body established by or under any law engaged in specified prescribed activities. This draft guide discusses the requirements for the exemption to apply.

Date published: 6 August 2021

3 October 2021Customs & Excise Act, 1964

Draft Amendment to Rules

  • Draft amendment to rules under sections 19, 60 and 120 – CCTV cameras

    Explanatory Note
    The draft rules inserted under section 19 of the Customs and Excise Act relates to the requirements in respect of monitoring of certain customs and excise warehouses for the manufacture or the storage of tobacco products through CCTV cameras.

    Date Published: 3 September 2021

 

27 September 2021Customs & Excise Act, 1964

Draft Schedule Amendment

  • Draft amendment to Note in Part 1C of Schedule No. 6

    Explanatory Note

    The draft amendment is proposed in Note 6 in Part 1C of Schedule No. 6 to the Customs and Excise Act as follows:-

  • Note 6(a)(i) is being amended in order to limit the return to the warehouse where the goods were originally manufactured.
  • Note 6(b)(i)(bb) is amended to correct the grammar to read “unpacked, where applicable, and transferred to [and mixed to] and mixed with stocks of materials for reprocessing.
  • Note 6(d) is amended in order to substitute the reference to the rules for section 19A to read as section 20.

    Date Published:  9 September 2021

 

20 September 2021Customs & Excise Act, 1964

Draft Excise Forms

Explanatory Note
The DA 185.4B3 and DA 185.4B4 forms are used by clients for the licensing of storage and special storage warehouses.

The forms have been amended to indicate separate tick boxes in respect of the business types for wine, vermouth and other fermented beverages.

Date published: 6 September 2021

 

10 September 2021Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note

This draft IN deals with the provisions of sections 9HA and 9HB and some of the provisions of section 25 applicable to the deemed disposal of assets by a deceased person, a deceased estate  and the transfer of assets between spouses.

Date published: 6 August 2021

 

3 September 2021Income Tax Act, 1962

Draft Binding General Ruling

Explanatory Note
This BGR provides guidance on the interpretation and application of the excluded activities under section 12R(4)(b) conducted by a qualifying company located within an Special Economic Zone as defined

Date published: 3 June 2021

 

28 August 2021National Legislation

Draft Bills

Explanatory Note
The National Treasury and the South African Revenue Service (SARS) today publish, for
public comment, the 2021 draft Rates and Monetary Amounts and Amendment of
Revenue Laws Bill (2021 draft Rates Bill), the 2021 draft Taxation Laws Amendment Bill
(2021 draft TLAB) and the 2021 draft Tax Administration Laws Amendment Bill (2021
draft TALAB). These draft tax bills contain tax proposals made in the 2021 Budget on 24
February 2021. The 2021 tax bills will be introduced in Parliament later this year.

Date published: 28 July 2021

28 August 2021National Legislation

Draft Bills and Explanatory Notes 

Explanatory Note
Following the announcement by the Minister of Finance on 28 July 2021 on the emergency tax measures as part of the fiscal package outlined by President Cyril Ramaphosa on 25 July 2021, which was in response to the continuing Covid-19 pandemic and recent unrest in the
country that resulted in the destruction of businesses, the National Treasury and the South
African Revenue Service (SARS) today publish, for public comment, the second batch of the
2021 Draft Taxation Laws Amendment Bill and 2021 Draft Tax Administration Laws
Amendment Bill (TALAB). The second batch of draft tax bills contains emergency tax
measures taking effect on 1 August 2021 and seek to make amendments in the Disaster Management Tax Relief Act, 2020 and Disaster Management Tax Relief Administration Act,
2020.

These measures are over and above the tax proposals made in the 2021 Budget on
24 February 2021, which were included in the initial batch of the 2021 draft tax bills, published
for public comment on 28 July 2021 (available below).

Date published: 12 August 2021

25 August 2021Customs & Excise Act, 1964

Draft Amendments to Rules

Explanatory Note
Rule 39.01 provides for importer’s clearing instructions as prescribed in paragraph 39(1)(c) of the Customs and Excise Act.

A first draft of the rule amendment included specific information that must be reflected by the principal. The first draft amendment was published for comment from 25 May – 15 June 2020. A second draft was published for comment from 30 July – 14 August 2020.

After consideration of comments received during the previous rounds, a third draft is being published for comment.

Date published:  4 August 2021

 

11 August 2021Tax Administration Act, 2011

Draft Notice

Date published: 28 July 2021

 

31 July 2021Income Tax Act, 1962

Draft Binding General Ruling

Explanatory Note
This BGR confirms that, for income tax purposes, any annuity purchased or provided by any retirement fund must be compulsory, non-commutable, payable for and based on the lifetime of the retiring member.

This means that the annuity may not be transferred, assigned, reduced, hypothecated or attached by creditors as contemplated by the provisions to sections 37A and 37B of the Pension Funds Act.

Date published: 8 June 2021

30 July 2021Customs & Excise Act, 1964

Harmonized System 2022

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
The changes in HS 2022 reflect the amendments to the nomenclature appended to the International Convention on the Harmonised Commodity Description and Coding System (HS Convention), which were accepted as a result of the Customs Co-operation Council’s (now the World Customs Organisation) recommendations of 28 June 2019. These amendments will enter into force on 1 January 2022.

Complementary amendments to the HS Nomenclature 2022 have been accepted as a result of the Council Recommendation of 25 June 2020.

As a signatory to the HS Convention, South Africa implements the amendments in terms of section 48(1)(c) of the Customs and Excise Act, 1964.

This is the seventh major revision of the HS since it had been approved by the Council in 1983 and implemented in 1988 and includes, on an international level, 351 sets of amendments.

The HS 2022 amendments and correlation table (Schedule No. 1) up to a 6-digit level as well as the complementary amendments can be viewed on the WCO website at http://www.wcoomd.org

Date published: 8 June 2021

 

23 July 2021Customs & Excise Act, 1964

Draft Excise Forms

Automotive Production and Development Programme (APDP)

Please record your comments on the Comment Sheet.

Explanatory Note
Clients who participate in the Automotive Production and Development Programme (APDP) are required to complete APDP quarterly accounts.

The draft forms reflect consequential amendments (red) for rebate item 317.04 of Schedule No. 3 to the Customs and Excise Act of 1964.

Date published: 2 July 2021

 

 22 July 2021Customs & Excise Act, 1964

 Draft Excise Form

Please record your comments on the Comment Sheet.

Explanatory Note
Form DA 185 is the application form used for the registration and licensing of customs and excise clients. The field dealing with documents in support of an application has been amended to include the submission of any other monthly account or statement, as may be appropriate in the circumstances, to confirm physical address of the applicant.

Date published: 2 July 2021

7 July 2021Customs & Excise Act, 1964

Draft Amendment to Rules

  • Draft amendment to the rules under sections 77H and 120 – Internal appeals

Please record your comments on the Comment Sheet.

Explanatory Note
Refer to Cover Note

Date published: 24 June 2021

 

 7 July 2021Customs & Excise Act 

Draft Amendments to Rules

  • Draft amendment to the rules under sections 59A, 76 and 120 – Exporter Tax

Explanatory Note
The draft Notice provides for –

  • the amendment to rule 59A.03 to exclude exporters of scrap metal from making use of registration code 70707070;
  • the amendment to the heading of rule 76 to include the refund of duty for certain exported goods; and
  • the amendment to rule 76.04 which has the effect that a voucher of correction cannot be used as an application for a refund of export duty.

Please record your comments on the Comment Sheet.

Date published: 24 June 2021

  25 June 2021 Income Tax Act, 1962

 Draft Public Notice

  • Draft Public Notice – Electronic form of record keeping in terms of section 30(1)(b) of the Tax Administration Act, 2011
  • Draft Form – Electronic form of record keeping

Explanatory Note
The draft notice prescribes the electronic form in which records, books of account and documents that are required to be kept or retained in terms of section 29 of the Tax Administration Act, 2011, must be held.

Date published: 3 June 2021

 4 June 2021 Customs & Excise Act,  1964

 Draft Amendments to Rules

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
Refer to Cover Note in relation to proposed registration and licensing amendments

Date published: 21 May 2021

 31 May 2021 Income Tax Act, 1962

 Draft List

Explanatory Note
The List of Qualifying Physical Impairment or Disability Expenses, has been updated and published for public comment, following consultation with stakeholders.

The public comments received will be limited to only the 3 items that were amended, namely, numbers 7, 8 and 9 under item F.  SERVICES. Any comments received for other aspects will be noted and considered at a later stage.

Date published: 19 May 2021

 28 May 2021 Income Tax Act, 1962

 Draft Interpretation Note

Explanatory Note
This Note provides guidance on the interpretation and application of section 12M which relates to the deductibility of a lump sum amount paid by a taxpayer to or in respect of a former employee or dependants of that former employee for purposes of covering post-retirement medical benefits.
 
Date published: 23 March 2021
21 May 2021Customs & Excise Act, 1964

Draft Amendments to Rules

Explanatory Note
The draft amendment of rules under section 18(13)(b) was published for comment on 25 January 2021. This amendment provided for the process of obtaining permission for the carrying out of activities for the purpose of preservation or maintenance, sorting and re-packing of goods in transit through the Republic. Comments received were reviewed and changes were made to the draft where necessary.

The new draft, which is now being published for a second round of comment, includes all the activities listed in section 18(13)(b)(i). Provision is made for obtaining permission in respect of the following activities in addition to the activities contained in the first draft:

  • Inspection of the goods
  • Cleaning the goods
  • Tallying the goods
  • Sealing the goods or the transport unit
  • Exercising control over the movement of goods into, in and from such place
  • Any other activity that may be necessary to prepare and forward the goods for transit.

Provision is further made for the process of obtaining a standing permission to carry out relevant activities in respect of goods in transit.

Please record your comments on the Customs & Excise Comment Sheet.
 
Date published: 7 May  2021
17 May 2021Customs & Excise Act, 1964

Draft Amendments to Rules

Explanatory Note
This Note provides for a transitional arrangement suspending the requirement for an import or export permit issued by the Department of Agriculture, Land Reform and Rural Development for SACUM-EPA tariff rate quotas from the date of implementation until 31 December 2021. This arrangement is in place to afford the DALRRD an opportunity to develop and prepare the required permit system to administer SACUM-EPA tariff rate quotas as from 1 January 2022 or after such further period as may be agreed and published in the SARS website.

Date published: 22 April 2021

30 April 2021

Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note:
This Note provides guidance on the interpretation and application of –
  • section 12N, which facilitates allowances under specified sections of the Act for improvements made to land or buildings not owned by a taxpayer but over which the taxpayer holds a right of use or occupation. The improvement must be effected under a PPP, a lease agreement with the state or certain other tax-exempt statutory bodies and the state or that body owns the land or building, or under the Independent Power Producer Procurement Programme; and
  • section 12NA, which deals with deductions for improvements effected under a PPP by a person to land or to a building over which the state holds the right of use or occupation.
Date published: 1 March 2021

30 April 2021

Customs & Excise Act, 1964

Draft Schedules Amendments

Explanatory Note
The changes in HS 2022 reflect the amendments to the nomenclature appended to the International Convention on the Harmonised Commodity Description and Coding System (HS Convention), which were accepted as a result of the Customs Co-operation Council’s (now the World Customs Organisation) recommendations of 28 June 2019. These amendments will enter into force on 1 January 2022.

Complementary amendments to the HS Nomenclature 2022 have been accepted as a result of the Council Recommendation of 25 June 2020.

As a signatory to the HS Convention, South Africa implements the amendments in terms of
section 48(1)(c) of the Customs and Excise Act, 1964.

This is the seventh major revision of the HS since it had been approved by the Council in 1983 and implemented in 1988 and includes, on an international level, 351 sets of amendments.

The HS 2022 amendments and correlation table (Schedule No. 1) up to a 6-digit level as well as the complementary amendments can be viewed on the WCO website at http://www.wcoomd.org

To give effect to this proposal the draft amendments are contained in the draft amendments as follows:

  1. Draft amended Notes to Part 1 of Schedule No.1 to implement HS 2022
  2. Part 1 of Schedule No. 1 is amended to give effect to the HS 2022 amendments
Date published: 26 February 2021

26 April 2021

Customs & Excise Act, 1964

Draft Rule Amendments

Draft amendments to rules under section 38 – SACU UCR Botswana and Namibia

Explanatory Note

The UCR is a unique reference number assigned to a consignment of goods for the purpose of tracking the goods throughout the supply chain from origin to destination. The Southern African Customs Union (SACU) UCR aims to facilitate the exchange of Customs information between SACU Member States. The Customs Administration of Botswana and Namibia is now being added to the list of countries participating in the SACU UCR implementation.

Date published: 12 April 2021

23 April 2021

Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note:
This Note has been updated for significant legislative amendments and deals with –
  • the tax consequences of the receipt or accrual of government grants;
  • the exemptions from normal tax applicable to government grants; and
  • anti-double-dipping rules applicable to expenditure funded by such grants.
    The primary sections dealt with are section 1(1) – definition of “gross income”, section 12P and the Eleventh Schedule.”
Date published: 26 February 2021

Due date extended to 16 April 2021

6 April 2021

Customs & Excise Act, 1964

Draft Rule Amendments

Explanatory Note:
See Explanatory Note
Date published: 19 March 2021
9 April 2021Customs & Excise Act, 1964

Draft Rule Amendments

Explanatory Note
The deletion of rule 76.02 is a consequential amendment to the implementation of the electronic submission of the application (voucher of correction) for general refunds.

Date published: 24 March 2021
9 April 2021National Legislation

Draft Notices and Bill

  • Media statement – 2021 Draft Rates Bill, Draft Notices and invitation to make submissions on sunset dates of certain tax incentives
  • Draft bill – 2021 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill – 24 February 2021
  • Draft notice – Amounts for purposes of definition of retirement annuity funds – 24 February 2021
  • Draft notice – UIF remuneration limit – (updated 26 February 2021)

Explanatory Note:
National Treasury and SARS hereby invite comments in writing on the  2021 Draft Rates Bill, the draft Notice on Regulations on amounts for purposes of definition of retirement funds, the draft Notice on Regulations on Unemployment Insurance Fund remuneration limit.

The 2021 draft Financial Sector Levies Bill is also available for comment. See the media statement for more information.

Date published: 24 February 2021
31 March 2021Customs & Excise Act, 1964

Draft Rule Amendments

Please record your comments on the Customs & Excise Comment Sheet.

Explanatory Note
See Cover Note in relation to proposed registration and licensing amendments. 

Date published: 26 March 2021

31 March 2021Customs & Excise Act, 1964

Draft Excise Forms

Explanatory Note
Excise Duties are payable by manufacturers of tobacco products on the DA 260 account. As a result of Budget 2021 proposals in respect of heated tobacco products, the current DA 260 excise accounts must be amended to reflect certain additional fields.

Date published: 17 March 2021
24 March 2021Customs & Excise Act, 1964

Draft Rule and Schedule Amendments in respect of the diesel Refund Scheme

Please record your comments on the Diesel Refund Comment Sheet.
 
Explanatory Note
Second drafts of diesel refund rules, forms and notes to the Customs and Excise Act, 1964, are hereby published for public comment. The updated draft amendments incorporate relevant comments and technical inputs received from various stakeholders in response to the first drafts that were published for comment in 2020. These proposed reforms to the diesel refund administration may, where necessary, be informed by industry-specific consultations during the year.
 
Date published: 9 February 2021
5 February 2021Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
This Draft Note provides guidance on the interpretation and application of section 19 and paragraph 12A which deal with the concession or compromise of debt in respect of years of assessment commencing on or after 1 January 2018.

The information in this Note is based on the income tax and tax administration legislation (as amended) as at the time of publishing and includes the following:

  • The Taxation Laws Amendment Act 34 of 2019 which was promulgated on 15 January 2020 (as per Government Gazette 42951).
  • The Tax Administration Laws Amendment Act 33 of 2019 which was promulgated on 15 January 2020 (as per Government Gazette 42952).
  • The Rates and Monetary Amounts and Amendment of Revenue Laws Act 32 of 2019 which was promulgated on 15 January 2020 (as per Government Gazette 42950).
Date published: 8 December 2020
15 January 2021Customs & Excise Act, 1964

Draft Schedule Amendment (Value-Added Tax Act)

Date published: 17 December 2020
18 September 2020Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
This Note provides guidance on the words “received by” in the definition of gross income and the treatment of the receipt of a deposit in the ordinary course of business. The Note does not deal with amounts deposited by clients with banks and similar deposit-taking financial institutions.
 
Date published: 23 July 2020
31 August 2020National Legislation

2020 Draft Rates Bill, Draft Tax Bills, Draft Regulations and Venture Capital Company (VCC) Survey

Explanatory Note
National Treasury and SARS hereby publish the 2020 draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill, the 2020 drat Taxation Laws Amendment Bill (TLAB), 2020 draft Tax Administration Laws Amendment Bill (TALAB) and the draft Regulations Prescribing Electronic Services, to give effect to the the 2020 Budget and the extension of some COVID-19 relief measures.

Furthermore, Venture Capital Companies (VCCs) are requested to complete the VCC survey.

Date published: 31 July 2020

5 August 2020Customs & Excise Act, 1964

Draft Tariff Amendments

 
Explanatory Note
The amendments are done in order to support the vision of the South African Automotive Masterplan of creating “a globally competitive and transformed industry that contribute to the sustainable development of South Africa’s productive economy creating prosperity for industry stakeholder and broader society”.
 
The amendments should be read with the International Trade Administration Commission’s draft published on the following link:
 
Date of published: 8 July 2020
20 July 2020Income Tax Act, 1962

Draft Interpretation Note

  • Draft Interpretation Note – Vesting of income in a resident beneficiary by a non-resident trust: Interaction between section 25B(1) and section  7(8)

Explanatory Note
This Note provides clarity on the interpretation and application of the words “subject to the provisions of section 7” in section 25B(1) and, more specifically, whether section 7(8) or section 25B(1) applies when income received by or accrued to a non-resident trust by reason of or in consequence of a donation, settlement or other disposition by a resident, is vested in a resident beneficiary by the trustees of the non-resident trust.

Date published: 22 June 2020

30 June 2020Value-Added Tax Act, 1991

Draft Interpretation Note

Explanatory Note
This draft Note clarifies the VAT implications resulting from the participation in loyalty programmes based on the current provisions of the VAT Act. This Note does not attempt to list and analyse all the loyalty programmes available. Loyalty programmes differ from each other, evolve and change because of continuous changes in market conditions, competition etc. For this reason, the general VAT principles applicable to loyalty programmes as contained in this Note must be analysed and subsequently applied to each transaction in a loyalty programme in accordance with that specific loyalty programme’s characteristics or nature.
 
Date published: 2 April 2020
30 June 2020Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
This draft Note provides clarity on the tax treatment of amounts received by or accrued to missionaries who are performing religious or related activities in South Africa.
 
Date published: 26 March 2020

31 March 2020

Due date extended to 15 May 2020
Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
This draft Note provides guidance on on calculating the section 11(j) doubtful debt allowance. Taxpayers should pay attention to the accompanying document outlining the application process, the requests for information (RFIs) and the excel-based Loss Allowance Models
 
Date published: 18 February 2020

31 March 2020

Due date extended to 15 May 2020
Income Tax Act, 1962

Draft Binding General Ruling

Explanatory Note
The draft BGR provides clarity on what constitutes an unbundling transaction under section 46(1) of the Income Tax Act 58 of 1962 when an unbundling company having non-qualifying shareholders unbundles shares in an unlisted unbundled company. A non-qualifying shareholder is a shareholder of the unbundling company that does not form part of the same group of companies as the unbundling company.
 
Date published: 13 February 2020
30 April 2020Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
The draft interpretation note provides guidance on the interpretation and application of the “funding” requirement in section 30B(2)(b)(ix) for an entity to be approved by the Commissioner, and to retain such approval for its receipts and accruals to qualify for exemption from normal tax under section 10(1)(d)(iii) or (iv).

The “funding” requirement is only one of a number of requirements, for purposes of section 30B, that must be included in the founding document. The other requirements are not addressed in this Note.

Date published: 24 March 2020
30 April 2020Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
The draft interpretation note discusses the requirements of the public benefit activity (PBA) contemplated in paragraph 3(c) in Part I of the Ninth Schedule to the Income Tax Act 58 of 1962 (the Act). PBA 3(c) provides for residential care to be provided to retired persons. An organisation carrying on that PBA as its sole or principal object may apply for approval as a public benefit organisation under section 30(3) of the Act, and if approved by the Commissioner, obtains preferential tax treatment under section 10(1)(cN), if all of the prescribed requirements are met.
 
Date published: 21 February 2020
28 February 2020Income Tax Act, 1962

Draft Guide

Explanatory Note
The guide provides general guidance on building allowances available to owners and lessees of buildings. The Guide has been updated to take into account legislative amendments, clarification on certain aspects and the fact that some of the sections are now the subject of separate Interpretation Notes.

Date published: 14 January 2020

17 January 2020Carbon Tax Act, 2019

Draft Regulations

Two draft regulations were published for comment:
Also see:
  • Summary – Draft Trade Exposure and GHG Emissions Intensity Benchmark Regulations
  • Media statement – Gazetting of the Carbon Offsets Regulations in terms of the Carbon Tax Act and related draft regulations for public comment
Explanatory Note
The National Treasury is seeking public comment into the Draft Regulations for Trade Exposure Allowance and the Draft Regulations for the Greenhouse Gas (GHG) Emissions Intensity Benchmarks.
“The National Treasury has published for public comment two further sets of regulations, namely Draft Regulations for the Trade Exposure Allowance for purposes of section 10 and Draft Regulations for the Greenhouse Gas (GHG) Emissions Intensity Benchmarks for purposes of section 11 in terms of section 19(b) and (a) of the Act, respectively,” it said on Monday.
The Draft Regulations for the Trade Exposure Allowance gives effect to the sector based allowance and provides a list of sectors and subsectors and their respective trade exposure allowances. The regulations also outline an alternative approach to calculate the trade exposure allowance for companies.
In addition, the Trade Exposure Allowance, aims to assist companies that potentially face competitiveness pressures whilst the performance allowance seeks to encourage firms to reduce the carbon intensity of their production processes relative to their peers and promote the competitiveness of local products.
 
This follows on an extensive stakeholder consultation process on the design of the carbon tax and tax free-allowances since the publication of the Carbon Tax Policy Paper in 2013 and the 2015 version of the Carbon Tax bill.
 
Earlier this year, President Cyril Ramaphosa signed into law the Carbon Tax Act in May 2019. The Act came into effect from 1 June 2019.
 
The Carbon Offsets Regulations – which were developed jointly by the National Treasury, the Department of Minerals Resources and Energy and the Department of Environment, Forestry and Fisheries – were gazetted on Friday.
 
The regulations outline the eligibility criteria for offset projects and sets out the procedure for claiming the offset allowance.
 
Companies are allowed to use carbon offsets of either 5 or 10% of their total GHG emissions to reduce their tax liability.
 
On Monday, Treasury said it will ensure that the final regulations are gazetted by the first quarter of 2020. This is to align the regulations with the greenhouse emissions reporting period of the Department of Environment, Forestry and Fisheries.
 
“The carbon tax is an integral part of government’s package of policy measures to mitigate climate change as outlined in the National Climate Change Response Policy, National Development Plan and its Nationally Determined Contribution commitments under the 2015 Paris Agreement.”
 
These said Treasury, provide for the introduction of the carbon tax in a phased manner at a relatively low rate initially. This will allow businesses time to make the necessary structural adjustments to their production processes and practices and to ensure a just transition to a low carbon, climate resilient economy.
 

“To ensure a cost effective transition, the design of the tax provides for the recycling of revenues through the electricity generation levy credit and energy efficiency savings tax incentive, and significant tax free-allowances of up to 95% of the total greenhouse gas emissions to firms, consisting of a basic tax free allowance of 60 % for direct, scope 1 emissions and allowances for sectors that are trade exposed up to a maximum of 10% and a performance allowance up to a maximum of 5%.”

Date published: 4 December 2019

30 November 2019Income Tax Act, 1962

Draft Binding General Ruling

  • Draft BGR – Determination of the threshold for applying the higher rate of donation tax
Explanatory Note
This BGR provides clarity on the rate of donations tax chargeable for the value of any property disposed of under a donation, and the determination of the R30 million threshold to be applied to such value. 
 
Date published: 17 September 2019
15 November 2019Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
This Note has been updated with amendments in the 2015, 2016, 2017 and 2018 Amendment Acts. Attention is drawn to the following main amendments to section 6quat on which readers may wish to comment:
  • Section 6quat(1B)(a) – see 5.5.1.
  • Section 6quat(1C) and (1D) – see 6. Section 6quat(1C) was amended at the same time section 6quin was deleted.
  • Section 6quat(4) – see 7.1.
In addition, owing to the deletion of section 6quin, the content relating to that section was deleted from the Note. A detailed discussion of section 6quin is contained in Issue 3 of this Note.
Readers will also note that the flow, structure and some of the wording used were amended throughout the document. The purpose of these changes was to improve standardisation and readability. The discussion on section 64N was deleted, since commentary in this regard is now contained in the Comprehensive Guide to Dividends Tax.
 
Date published: 12 September 2019
24 June 2019Tax Administration Act, 2011

Draft Common Reporting Standard Regulations

Explanatory Note
Amended draft Regulations under section 257 of the Tax Administration Act, which provide for the implementation of the OECD Common Reporting Standard.
29 March 2019Schedules to the Excise Duty Act, 1964, and Customs Control Act, 2014

Draft Schedules

As a consequence of the rewrite of the Customs and Excise Act, 1964, which will be replaced with the new Excise Duty Act, 1964 and the Customs Control Act, 2014, kindly find below documents for consideration and comments:
  1. Correlation Table
    This document is comprehensive and contains corresponding references and provisions for inclusions from the Schedule to the Customs and Excise Act, 91 of 1964 and the new draft Customs tariff
  2. The General Notes to the Excise Tariff
  3. Schedule No. 1 – Excise and Ad Valorem Duty
  4. Schedule No. 2 – Environmental Levy
  5. Schedule No. 3 – Fuel and Road Accident Levy
  6. Schedule No. 4 – Health Promotion Levy
  7. Schedule No. 5 – Ordinary Levy
  8. Schedule No. 6 – Rebates and Refunds of Excise Duties, Fuel Levy, Road Accident Fund Levy, Environmental Levy and Health Promotion Levy
  9. Schedule No. 7 – Rebate on Import Duties
  10. Schedule No. 8 – Drawback and Refunds of Excise Duties on Imported Goods
9 March 2019
Due date extended to 29 March 2019
Schedules to the Customs Control Act, 2014 and Customs Duty Act, 2014

Draft Schedules

As a consequence of the rewrite of the Customs and Excise Act, 1964, which will be replaced with the new Customs Duty Act, 2014 and the Customs Control Act, 2014, kindly find below documents for consideration and comments:
  1. Correlation table
    This document is comprehensive and contains a birds eye view of the tariff structure as contained in the 1964 Act, any changes to the wording and structure and where in the new Customs Tariff it can be found. The correlation is from the 1964 Act to the new Customs Tariff and the other way round.
  2. The General Notes to the Customs Tariff
    The General Notes are circulated without the rest of Schedule No. 1 as it will make the documents bulky and difficult to email. Schedule No. 1 contains a few changes that are elaborated on in the correlation table (see lines 60 to 73) but in essence it contains the current tariff code structure of the existing Schedule No. 1 Part 1 of the 1964 Act.
  3. Schedule No. 2 to the Custom Tariff
    Schedule No. 2 remained unchanged with the exception of the Notes which were previously repeated in each Part of Schedule No. 2. The changes are contained in the correlation table.
  4. Schedule No. 3 to the Customs Tariff
    Schedule No. 3 significantly changed and contains both the provisions of Schedule No. 3 and Schedule No. 4 to the 1964 Act. The Schedule is also aligned with the procedures as contained in the CDA and CCA. All the changes are elaborated upon in the correlation table.
  5. Schedule No. 4 to the Customs Tariff
    Schedule No. 4 contains the refund and drawback provisions previously contained in Schedule No. 5 to the 1964 Act. The Schedule now also makes provision for some refunds contained in Chapters 25 and 26 of the CCA that did not form part of the 1964 version of Schedule No. 5. All the changes and movement of items are elaborated upon in the correlation table.
  6. Schedule No. 5 to the Customs Tariff
    Schedule No. 5 contains the provisions for ordinary levy that previously resorted in Part 8 of Schedule No. 1 of the 1964 Act.
8 March 2019Tax Administration Act, 2011

Draft Notice

Explanatory Note
The draft revised notice lists reportable and excluded arrangements in terms of sections 35(2) and 36(4)
18 September 2018Customs & Excise Act, 1964

Draft Amendment Notices

 
Explanatory Note
The proposed amendments to Schedule No. 6 to the Act are contained in the draft amendments as follows:
  • Section C of Part 1 of Schedule No. 6 is amended to provide for the rebate provision on unfortified wine used in the manufacture of other foodstuffs.
     
  • Form DA 133 is being inserted in the Schedule to the Rules. This form is used by the rebate user for recording the manufacturing, other operation or process.
26 June 2018Tax Administration Act, 2011

Draft Rules

Explanatory Note
Rules governing the procedures to lodge an objection and appeal against an assessment or decision under Chapter 9 of the Act, procedures for alternative dispute resolution, and the conduct and hearing of appeals before a Tax Board or Tax Court.
30 April 2018Income Tax Act, 1962

Draft Interpretation Note

Explanatory Note
Section 23I prohibits a deduction of any expenditure incurred for the right or permission to use intellectual property and other expenditure which is directly or indirectly related to such expenditure. This Note provides guidance on the interpretation and application of section 23I.

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