Learning Unit 1 Flashcards
Name the different taxes set up by the South African government
- Income tax
- Value added Tax
- estate duty
- excise duty
- Customs duty
- Transfer duty
- Air passenger tax
- Securities transfer
- UIF
- Skills development levy(SDL)
Income tax includes
Capital gains
Turnover tax
Dividends tax
The government has a fiscal year that runs from
1 April to 31 March each year
The budget speech is based on
The National Budgets
When is draft taxation bills promulgated as a Act of Parliament?
When the act is published in the Government Gazette
The Income Tax Act stays exactly the same every year?
No , it’s affected by a number of amended acts every year
Before legislation is passed by parliament it is called
A Bill
A Bill is always accompanied by
An explanatory memorandum, which gives reasons for the amendment
The government issues two amendment Acts per fiscal year
- Taxation Laws amendment Act
2. Taxation Laws second amendment Act
Date of promulgation
Date at which it is published in the GOVERNMENT GAZETTE
Attached to our Income tax act are
11 Schedules
SARS
South African Revenue Service
The commissioner of SARS has powers and duties given to him/ her by
The Income Tax Act
The commissioner reports to
A board of directors which in turn is accountable to the MINISTER OF FINANCE
SARS was established in terms of the
South African revenue Service Act as an autonomous and independent section of Government
The South African tax regime is set by
The national Treasury and administered by the commissioner
CSARS , CIR , SIR are abbreviations for
The commissioner of SARS
On what basis are South Africans taxed?
Residency
What does residence basis of taxation mean
Residents of RSA are taxed on all their income they earn , anywhere in the world
Where a person is not a resident , they will still be taxed
In South Africa on income earned from a South African source
Taxation in RSA can be classified According to
- What is tax levied on
- The method used to calculate tax
- Who must pay
Taxes based on what is taxed
- Income - income tax
- Consumption-VAT
- Wealth-Capital gains
- Other - transfer duty
Taxes based on who pays
- Direct - person who earns pays
2. Indirect - seller bears impact while consumer pays
Taxes based on method of calculation
- proportional - company tax
- Progressive
- Regressive
Taxation rules are also referred to as
Provisions
Binding general rulings issued by the CSARS
Are binding on SARS AND TAXPAYERS
Interpretation notes
Are NOT binding on SARS except if they are a binding private of class ruling.
The purpose of an interpretation note is
To set out how SARS will interpret or apply certain provisions
If a interpretation note provides guidance on how the CSARS intends using his/her discretion
The interpretation note will be binding on SARS and therefore have the same effect as the law
CONTRA FISCUM rule
According to this rule , where a provision of the Income Tax Act has 2 interpretations , the court will interpret the provision in terms of the interpretation that places the smaller burden on the taxpayer.
When a taxpayer Disagrees with SARS regarding an assessment, name the overarching remedies
- Alternative dispute resolution (ADR)
- The tax board
- The tax court
Request for reasons
A taxpayer who is aggrieved by an assessment may request SARS to provide the reasons for the assessment prior to lodging an objection.
Lodging a objection
A taxpayer who wishes to object to an assessment must deliver a NOO within 30 days after the delivery of reasons from SARS. Specify grounds for objection on the NOO form or the ADR1 form
If a objection has been lodged by the taxpayer, SARS must
Notify the taxpayer of the allowance/ disallowance of the objection and the basis for it within 60 days after delivery of the taxpayer’s objection
The NOO FORM is applicable to
Personal Income Tax (administrative penalties and assessed tax)
corporate income tax
The Alternative dispute resolution for objection (ADR1)
VAT
PAYE assessment
Income tax for trusts
Secondary tax on companies prior to 1 April 2011
Donations tax
