Draft tax bills published for comment
THIS week, National Treasury and the South African Revenue Service (SARS) published the 2017 Draft Taxation Laws Amendment Bill and the 2017 Draft Tax Administration Laws Amendment Bill. These bills, together with the 2017 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill published on Budget Day, will give effect to the tax proposals announced in the Budget.
The South African Institute of Tax Professionals (Sait) says there will be an extensive process of public comment and consultation before the bills become law. It says there is an opportunity for written comment on the draft taxation amendment bills until August 18. Workshops with Treasury and SARS are planned for the end of August. The Standing Committee on Finance will also convene public hearings on the bills before their formal introduction in Parliament.
In late September, Treasury and SARS will present a combined response document to the Standing Committee on Finance on the comments received. The bills will then be revised, taking into account these comments, before they go through the formal parliamentary processes and are signed into law.
Sait says the proposals likely to attract a lot of attention include:
• From March 2019, the foreign employment income tax exemption in respect of South African residents will be removed. Individuals subject to tax in a foreign jurisdiction on such income will have to claim foreign tax credits via their South African income tax returns to avoid double taxation.
• From March 2017, amendments to accommodate employee share scheme trusts will be implemented.
• From January 2018, there will be alterations to the tax treatment of debt foregone for the benefit of a mining company or a group company.
• From July 2017, measures to prevent tax avoidance through the use of trusts will be refined.
• From July 2017, the circumvention of anti-avoidance rules dealing with share buy-backs, dividend stripping and contributed tax capital will be addressed.