Unit 1

Question 1

Main legislative pieces in SA

Answer 1

Income Tax Act and Tax Administration Act

Question 2

Highest Court to hear tax matters

Answer 2

Constitutional Court

Question 3

When will you pay tax?

Answer 3

When you receive income above the threshold set by SARS

Question 4

What are the 2 shadows?

Answer 4

Who is responsible for INTEREST and TAX

Question 5

Name 8 types of tax

Answer 5

Normal tax
Donations tax 
Withholding tax 
Turnover tax 
Dividends tax 
Capital Gains Tax 
Value-Added Tax 
Estate Duty

Question 6

What is NB when litigating against SARS?

Answer 6

To use the correct address (of the specific office being sued)

Question 7

What was the interpretive approach before the Constitution?

Answer 7

Black letter approach

Question 8

WWhat was the interpretive approach after the Constitution?

Answer 8

Purposive approach (contextual approach)

Question 9

Name 6 aids to use when interpreting tax law

Answer 9

Constitution 
Case law 
Different forums (tax board, tax court, HC) 
Rules of interpretation 
International law 
Interpretation Act

Question 10

What is the maximum value of a dispute that can be referred to the Tax Board?

Question 11

Name 4 facts about the Tax Court

Answer 11

It was previously the Special Court of Income Tax Appeals
Not a court of law
Not bound by own decisions
Bound by provincial divisions of HC & SCA

Question 12

What are the 5 rules/types of interpretation?

Answer 12

Literal approach 
Purposive approach 
Objective approach 
Contra fiscum rule 
Substance over form

Question 13

If in conflict, which takes precedence: ITA or TAA?

Answer 13

ITA

Question 14

Discuss 2 points each about unambiguous and ambiguous text ito the literal approach

Answer 14

English law follows literal/textual approach
Unambiguous:
1. Grammatical meaning 
2. Ordinary, natural use 
Ambiguous: 
1. Disregard literal meaning 
2. Avoid absurdity

Question 15

Name 3 points about the purposive approach (as now used in SA)

Answer 15

Contextual approach
Ss 39(1) & (2) of the Constitution
CSARS v Airworld

Question 16

What is the main point emphasised in CSARS v Airworld?

Answer 16

Emphasis is placed on the purpose with which the Legislature has enacted the relevant provision and the interpreter must give effect to such purpose; and such purpose must be used in conjunction with the appropriate meaning of the language of the provision.
I.e. Intention (Constitution) + literal meaning

Question 17

What is the main point emphasised in Natal Joint Municipal Pension Fund v Endumeni Municipality?

Answer 17

Whatever the nature, consideration must be given to the language used in light of ordinary rules of grammar and syntax; the context in which the provision appears; and the apparent purpose. Where more than one meaning is is possible, each possibility must be weighed in light of all these factors.
I.e. Tax context + purpose

Question 18

What does the contra fiscum rule mean?

Answer 18

When there is ambiguity in tax legislation, then you interpret that in the favour of the tax payer.

Question 19

What does substance over form mean?

Answer 19

SARS will consider the contents (substance) of a document/matter rather than the name (form).

Question 20

Does Ministerial regulations have the same power as legislation?

Answer 20

Yes.

Question 21

Name 4 points related to Practice Notes & Interpretation Notes

Answer 21

Not legislative
Published by SARS
Assists with interpretation
Same as Magistrates’ & High Court’s Rules

Question 22

Which legislative provision establishes liability for normal/income tax?

Answer 22

Section 5(1) of the ITA

Question 23

Upon whom is normal tax imposed?

Answer 23

Natural persons 
Pty Ltds 
Closed Corporations 
Trusts, estates, associations, and clubs 
Excludes foreign partnerships

Question 24

On which income is normal tax applicable?

Answer 24

Taxable income

Question 25

From when to when does a YOA run?

Answer 25

From 1 March to last day of February

Question 26

When the YOA broken?

Answer 26

Death
Birth
Insolvency

Question 27

Is the rate of normal tax a fixed rate?

Answer 27

No, it ranges from 18% to 45%

Question 28

What are the 2 ways of becoming liable for tax in SA?

Answer 28

1. Being a resident for tax purposes

2. Being a non-resident, but being in SA long enough that you are considered a resident

Question 29

What is the correct interpretive approach to tax legislation?

Answer 29

The Constitutional (purposive) approach.

Question 30

What are the two periods that a YOA could be?

Answer 30

1. Usually 12 months; but

2. Could be 6 months

Question 31

Name 2 types of special trusts

Answer 31

Mentally/physically disabled person

Relatives + youngest under 18 years old

Question 32

At what rate are trusts (excl. special trusts) taxed?

Answer 32

45%

Question 33

What types of rebates are available to natural persons?

Answer 33

Primary rebate (for being a natural person) 
Secondary rebate (if above 65yo) - in addition to primary rebate 
Tertiary rebate (if above 75yo)

Question 34

When are tax rates determined?

Answer 34

Annually by Parliament (delivered in Budget Speech)

Question 35

At what rate are companies (Pty & CCs) taxed?

Answer 35

28%

Question 36

What is the tax rate for companies in special economic zones?

Answer 36

15%