RESEARCH & EDUCATION
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LATEST CHANGES
Section 31 of the Income Tax Act 58 of 1962
MAIN GUIDANCE: PRACTICE NOTE 7
DRAFT GUIDANCE ON INTRA-GROUP LOANS
DRAFT GUIDANCE ON THE DEFINITION OF AN "ASSOCIATED ENTERPRISE", 2022
INTERPRETATION NOTE 67 ON THE "CONNECTED PERSONS", 2020
GG #1334: Duty to Keep Records i.t.o S29 of the TAA
LAW TO SUMBIT
"International Tax Standard" definition of Section 1 of the TAA, 2011; and GG #1117 (i.t.o. Section 25 of the TAA, 2011).
REGULATIONS/GUIDANCE
CBCR Regulations R1598, December 2016.
MAIN TRANSFER PRICING
LEGAL LANDSCAPE
A
RELATED TAX
LEGAL LANDSCAPE
CONTROLLED FOREIGN COMPANY (CFC) RULES
Section 9D of the ITA 58 of 1962.
DOMESTIC LAW ON CFCs
PERMANENT ESTABLISHMENT RULES
N.A.
DEFINITION IN DOMESTIC LAW
PROFIT ALLOCATION IN DOMESTIC LAW
N.A.
DIGITAL SERVICES TAX (DST) /OECD PILLAR I
NA
DST LAW
OECD 2 PILLAR PLAN PARTICIPATION
DST GUIDANCE
N.A.
Participates
LIMITATIONS ON INTEREST, ROYALTIES & SERVICE CHARGES
OTHER LAW LIMITATIONS
N.A.
OTHER LAW LIMITATIONS
N.A.
OTHER LAW LIMITATIONS
N.A.
INTEREST
DOMESTIC TAX LAW LIMITATIONS
Sections 8, 8F, 23J, 23O, 23M, 23N, 45,47
ROYALTIES
DOMESTIC TAX LAW LIMITATIONS
Section 23I of the ITA 58 of 1962
SERVICES
DOMESTIC TAX LAW LIMITATIONS
N.A.
B
COMPLIANCE
RETURNs and submissions
Submission
INCOME TAX
Return: ITR
Threshold/Taxpayer: All Corporate
Submission: E-filing - Link: https://www.sarsefiling.co.za/
Form:
Guidance: https://www.sars.gov.za/types-of-tax/corporate-income-tax/completing-an-itr14/
Language: English
CBCR (Country-byCountry Reporting)
Notification: on IT14 return (see above)
Return: CBC01 or Reportable File (XML)
Threshold/Taxpayer: The Ultimate Parent Entity (UPE), resident in South Africa, of an MNE Group with a total consolidated group revenue of R10 billion or more during the Fiscal Year immediately preceding the Reporting Fiscal Year, as reflected in its Consolidated Financial Statements for such preceding Fiscal Year.
Submission: E-filing - Link: https://www.sarsefiling.co.za/
Deadline: no later than 12 months after the last day of the Reporting Fiscal Year of the MNE Group.
Form: Find on e-filing
Guidance: https://www.sars.gov.za/types-of-tax/corporate-income-tax/country-by-countrycbc/
Guidance Document:
Language: English
MASTER FILE AND LOCAL FILE
Return: Master file and Local file
Threshold/Taxpayer:
The Ultimate Parent Entity (UPE), resident in South Africa, of an MNE Group with a total consolidated group revenue of R10 billion or more during the Fiscal Year immediately preceding the Reporting Fiscal Year, as reflected in its Consolidated Financial Statements for such preceding Fiscal Year.
Any MNE Entity with potentially affected transactions for the year of assessment, without offsetting any potentially affected transactions against one another, that exceeds or is reasonably expected to exceed R100 million, is required to file a local file and may also be required to file a master file.
Submission: E-filing - Link: https://www.sarsefiling.co.za/
Deadline:
A UPE or other MNE entity that must file a CbC Report, master file and local file must file no later than 12 months after the last day of the Reporting Fiscal Year of the MNE Group.
An MNE entity that must only file a local file (and master file) must file no later than 12 months after its year of assessment.
Form: Find on e-filing
Guidance: https://www.sars.gov.za/types-of-tax/corporate-income-tax/country-by-countrycbc/
Language: English
WITHHOLDING TAX ON INTEREST
Return:
Return for Withholding Tax on Interest (WT002)
Withholding Tax on Interest Declaration (WTID) (for exemptions and reduced rates)
Threshold/Taxpayer: The foreign person is responsible for the tax, but it must be withheld by the person making the interest payment to or for the benefit of the foreign person.
Submission: E-filing - Link: https://www.sarsefiling.co.za/
Deadline: The WT002 and the payment must be submitted to SARS before the end of the month after the month in which the interest was paid.
Form:
WT002 is available on e-filing
WTID:
Language: English
WITHHOLDING TAX ON ROYALTIES
Return:
Return for Withholding Tax on Royalties (WTR01)
Withholding Tax on Royalties Declaration (WTRD) (for exemptions and reduced rates)
Threshold/Taxpayer: The foreign person is liable for the tax, but the tax must be withheld from the royalty payment by the person paying it to the foreign person (i.e. the withholding agent).
Deadline: Payment must be submitted with form WT002m before the end of the month following the month in which the royalty was paid.
Submission:
WTR01: E-filing - Link: https://www.sarsefiling.co.za/
WTRD: submit to lbqueries@sars.gov.za with proof of payment for taxpayers that deal with Large business.
Form:
WTR01: available on e-filing
WTRD:
Language: English
DST
Not applicable
PENALTIES
C
AUDIT & DISPUTES
PREVENTION & RESOLUTION
DISPUTE PREVENTION
LAWS
Chapter 5 (Audits) & Chapter 8 (Assessments) of the TAA, 2011.
LAWS
Chapter 7 of the TAA, 2011
Rule 6 of the Dispute Resolution Rules (GG#37819).
RULES/REGULATIONS
LAWS
DRAFT Legislation: Section 90A of the TAA, 2011.
RULES/GUIDANCE
Discussion Paper, 2020
RULES/GUIDANCE
SARS Page
DISPUTE RESOLUTION
LAW
Section 101 - 106 of the TAA, 2011.
LAWS
Chapter 103 of the TAA, 2011.
LAWS
Chapter 9 of the TAA, 2011,.
RULES/REGULATIONS
Rule 7-9 of the Dispute Resolution Rules i.to. s103 (GG#37819)
RULES/REGULATIONS
Part C of GG#37819, 2014
RULES/REGULATIONS
Rule 10-11 (Appeals) and Part D (Tax Board Procedures), Part E and F (Tax Court Prodecures) Dispute Resolution rules i.to. s103 (GG#37819)
CASE LAW
OBJECTION | ADR | REGULATIONS |
|---|---|---|
/africa-tp-dblegal/zimbabwe | ||
/africa-tp-dblegal/zambia | ||
/africa-tp-dblegal/uganda | ||
/africa-tp-dblegal/tunisia | ||
/africa-tp-dblegal/togo | ||
/africa-tp-dblegal/tanzania | ||
/africa-tp-dblegal/sudan | ||
/africa-tp-dblegal/south-sudan | ||
/africa-tp-dblegal/south-africa | Section 101 - 106 of the TAA, 2011. | Rule 7-9 of the Dispute Resolution Rules i.to. s103 (GG#37819) |
/africa-tp-dblegal/somalia | ||
/africa-tp-dblegal/sierra-leone | ||
/africa-tp-dblegal/seychelles | ||
/africa-tp-dblegal/senegal | ||
/africa-tp-dblegal/soa-tome-%26-principe | ||
/africa-tp-dblegal/rwanda | ||
/africa-tp-dblegal/nigeria | ||
/africa-tp-dblegal/niger | ||
/africa-tp-dblegal/namibia | ||
/africa-tp-dblegal/mozambique | ||
/africa-tp-dblegal/morocco | ||
/africa-tp-dblegal/mauritius | ||
/africa-tp-dblegal/mauritania | ||
/africa-tp-dblegal/mali | ||
/africa-tp-dblegal/malawi | ||
/africa-tp-dblegal/madagascar | ||
/africa-tp-dblegal/lybia | ||
/africa-tp-dblegal/liberia | ||
/africa-tp-dblegal/lesotho | ||
/africa-tp-dblegal/kenya | ||
/africa-tp-dblegal/guinea-bissau | ||
/africa-tp-dblegal/guinea | ||
/africa-tp-dblegal/ghana | ||
/africa-tp-dblegal/gambia | ||
/africa-tp-dblegal/gabon | ||
/africa-tp-dblegal/ethiopia | ||
/africa-tp-dblegal/eswatini | ||
/africa-tp-dblegal/eritrea | ||
/africa-tp-dblegal/equatorial-guinea | ||
/africa-tp-dblegal/egypt | ||
/africa-tp-dblegal/drc | ||
/africa-tp-dblegal/djibouti | ||
/africa-tp-dblegal/cote-de-viore | ||
/africa-tp-dblegal/angola | ||
/africa-tp-dblegal/comoros | ||
/africa-tp-dblegal/chad | ||
/africa-tp-dblegal/central-african-rep. | ||
/africa-tp-dblegal/cameroon | ||
/africa-tp-dblegal/cabo-verde | ||
/africa-tp-dblegal/burundi | ||
/africa-tp-dblegal/burkina-faso | ||
/africa-tp-dblegal/botswana | ||
/africa-tp-dblegal/benin | ||
/africa-tp-dblegal/congo | ||
/africa-tp-dblegal/algeria |
TRANSFER PRICING CASES
1.Crookes Brothers Ltd v Commissioner for the South African Revenue Service [2018]:
Issue: Scope of the carveout of Section 31(7) related to a shareholders loan.
Link: https://www.saflii.org/za/cases/ZAGPPHC/2018/311.html
2.ABC (Pty) Ltd v Commissioner: SARS (IT 14305) [2021] ZATC 1 (7 January 2021)
Issue: Section 31(2) (power to make adjustments).