News

RENEGOTIATED DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN THE REPUBLIC OF SOUTH AFRICA (SA) AND THE REPUBLIC OF MAURITIUS (MAURITIUS)

The revised SA/Mauritius Treaty will take effect from 1 January 2016. A Mutual Agreement Procedure (MAP) between the two countries will determine a single residency in cases of dual residency for legal persons other than individuals. The new Memorandum of Understanding (MOU) (see below) provides further guidance in terms of process.

INTERNAL AUDIT – ADDING VALUE OR ADDING PAPER?

Many internal audit functions within organisations fail to add practical value that exceeds their costs.  Why is this?
 
Firstly, it is our experience that an internal audit function is hard pressed to demonstrate and deliver value if not underpinned by a robust Enterprise-wide Risk Management (ERM) process.  In fact, where there is no ERM process in place, it is our recommendation that internal audit resources should first be applied in establishing an ERM process.  

CLARIFICATION ON TAX CLEARANCE APPLICATIONS FOR FOREIGN INVESTMENT PURPOSES

In the February Budget Review, National Treasury indicated that as from 1 April 2015 a South African resident’s (individuals only) foreign capital allowance would increase from R4 million to R10 million per calendar year.

In order to take funds offshore, individuals would have to obtain a foreign tax clearance certificate from SARS before they could transfer the funds offshore.

AN OPPORTUNITY TO AUGMENT YOUR ANNUAL TAX PLANNING

A TFSA is a long-term investment vehicle which can be a valuable addition to your existing plan, due to its significant tax advantages. Since the introduction of the TFSA legislation on 20 February 2015, you've probably been faced with a myriad of TFSA-related news and marketing messages. It may be tempting to make a decision hastily, but it's worth taking a step back and ensuring these decisions are fully informed and costs are fair, especially since high fee charges within some of the available options on the market could erode some of its tax benefits. We'd like to help you understand more about what to consider when making your selection.

TRUSTS - ROLE AND RESPONSIBILITY OF PROTECTORS

To Protect or Not to Protect
 
Whilst the role of a trust protector is more often raised in connection with offshore trusts, he/she may be appointed in domestic trusts both inter vivos and will trusts. His/her role and responsibility are often misunderstood or unclear.
 
A trust protector has nothing to do with nor has any connection with the “Public protector”, set up in terms of South Africa’s Constitution to investigate complaints against government agencies or officials.

SELLING YOUR BUSINESS

The preparatory steps, even if the thought hasn’t crossed your mind yet!
 
Are you a small to medium-sized business owner? Selling your business is possibly not your priority right now, but in order to achieve a successful sale, you should start preparing early in order to optimise the value that you could receive. Let’s run through ten practical steps to help you achieve the best value on the ultimate sale of your business. Please note that this article is not in any way intended to be a technical treatise. 

EXTENSION OF 2014 ROE DEADLINE

The deadline for the 2014 Return of Earnings form (W.As.8) has been extended to 29 May 2015.
 
The 2014 assessment period will be opened for transacting on the ROE website from 1 April 2015.

TAX-FREE SAVINGS ACCOUNTS

What is a Tax-Free Savings Account?
 
Tax-free savings accounts were introduced by National Treasury to encourage individuals to save with the benefit of the account being 100% tax free. These accounts came into effect on 1 March 2015. The investment account is exempt from income tax, capital gains tax (CGT) and dividend withholding tax. Individuals are allowed to contribute R30 000 per year to a tax-free savings account and there is a lifetime maximum contribution limit of R500 000. 

RISK MANAGEMENT

Top Management Tool or Administrative Nightmare?
 
We have seen many organisations implement an Enterprise-wide Risk Management Process during the last few years.  Yet very few have derived any practical value from this process.

COMPLIANCE WITH ANTI-BRIBERY AND CORRUPTION LEGISLATION

In recent years, there has been increasing concern internationally about bribery and corruption. As a result, many countries have passed laws (or have sought to implement existing laws more actively) that target bribery and corruption, both inside and beyond their national borders. Apart from any reputational risk management issues, penalties for non-compliance are potentially very severe for offending parties, so it’s not just a case of “doing the right thing” from an ethical standpoint.

THE PRESCRIBED OFFICER

Do you hold general managerial and executive decision making powers in your current position?  Do you lead from the front, instituting changes that affect the way your business functions and the systems it operates? Do you ever assist and advise in the legal affairs of the Company? If so, you could be a Prescribed Officer. Why is this important? Simple. You can and will be held at the same level of responsibility and liabilities to that of a registered director for any gross negligence and mismanagement.  As such, it is imperative that you are aware of your corporate positioning. 

SELLING YOUR BUSINESS

The preparatory steps, even if the thought hasn’t crossed your mind yet!
 
Are you a small to medium-sized business owner? Selling your business is possibly not your priority right now, but in order to achieve a successful sale, you should start preparing early in order to optimise the value that you could receive. Let’s run through ten practical steps to help you achieve the best value on the ultimate sale of your business. Please note that this article is not in any way intended to be a technical treatise. 

COMPLIANCE WITH ANTI-BRIBERY AND CORRUPTION LEGISLATION

In recent years, there has been increasing concern internationally about bribery and corruption. As a result, many countries have passed laws (or have sought to implement existing laws more actively) that target bribery and corruption, both inside and beyond their national borders. Apart from any reputational risk management issues, penalties for non-compliance are potentially very severe for offending parties, so it’s not just a case of “doing the right thing” from an ethical standpoint.

THE INSIDE SCOOP OF INSIDER TRADING – THE ZIETSMAN JUDGEMENT

Insider trading is famously prohibited but prosecution is uncommon. The judgement in Zietsman and Another v Financial Services Board and Another (A679/14) [2015] ZAGPPHC (24 August 2015) has shown that this form of market abuse can be easy to detect and prove and the financial sanctions imposed are a strong deterrent besides the risk of criminal prosecution.

A TOUGH YEAR AHEAD...

David Crosoer, our Executive: Research and Investments answers some pertinent questions about our investment perspectives for 2015 and what happened in 2014. He shares insight into the broader global economy, the local picture and just how PPS Investments has diversified its portfolios to minimise risk for clients and help to generate long-term wealth.

STC CREDIT – USE IT OR LOSE IT

Dividends tax was introduced into the South African tax regime on 1 April 2012 and replaced secondary tax on companies (STC). STC was levied on dividends distributed by companies at the flat rate of ten percent. In terms of the dividends tax regime, a 15% tax is levied on the amount of any dividend paid by a company. The company is liable to withhold the amount of the tax in respect of cash dividends and pay it over to the South African Revenue Service (SARS).

TOPPING UP YOUR RETIREMENT ANNUITY

Have you ever wondered why, at this time of the year, you receive a plethora of emails from investment businesses recommending that you top up your retirement annuity (RA)? The short answer is that the 2014/15 tax year closes on 28 February and you’re able to reap significant tax advantages by making an additional RA contribution before the tax year-end. Generally speaking, an additional investment into an RA is beneficial, provided that you have not yet reached your maximum tax deductible retirement annuity contribution for the year and provided that all money returned from SARS in future is reinvested into your RA portfolio.

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