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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.

ECONOMIC COMMENTARY

David Crosoer, PPS Investment Executive, answers some pertinent questions about his investment perspectives for 2015 and over the past quarter. 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 them generate long term wealth. 

WITHHOLDING TAX ON FOREIGN INTEREST PAID AND INCREASE IN RATE OF WITHHOLDING TAX ON ROYALTIES PAID (EFFECTIVE 1 JANUARY 2015).

Areas that could be of significance to entities that receive finance from abroad, are Sections 50A – 50H that came into effect on 1 January 2015.

These sections deal with withholding tax on interest paid to or for the benefit of any foreign person, to the extent that the amount is regarded as having been received or accrued from a source within South Africa.  According to the new regime, withholding tax amounting to 15% of the interest payable will be required to be withheld and paid by the South African resident entity to SARS by the last business day of the month, following the month in which the interest is paid.

DURBAN-BASED AGRI COMPANY SET TO EXPAND INTO AFRICA AND MIDDLE EAST

Durban-based company, VIPA Holdings, is set to become a leader in the fertiliser business into Africa and the Middle East after entering into an alliance with Cargill, the largest grain-rading company in the world.
 
VIPA’S partnership with Cargill will enable it to import bulk fertilisers such as UREA, KCL as well as MAP for distribution into the regions.  These three products form the base of the standard Nitrogen, Phosphates and Potassium (NPK) which is widely used in agriculture.

IS YOUR HOUSE IN ORDER? YOUR HOLIDAY CHECKLIST

The holiday season is almost upon us, and with it an excellent opportunity to get your financial house in order. One of the keys to stress-free living in the holiday season is to make a financial checklist, suggests Olivier Barbeau, senior managing partner for audit and advisory firm, Moore Stephens South Africa.

QUALITY IS KEY SAYS MOORE STEPHENS INTERNATIONAL CHAIRMAN, RICHARD MOORE.

The Chairman of Moore Stephens International, Richard Moore, has encouraged partners and staff to make the most of tremendous opportunities over the next few years. 
 
Mr. Moore was warmly welcomed when he joined 68 Partners at the 11th MSSA Partners Conference in Clarens, where he offered some valuable insights into the network and industry.
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