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Further Comments Sought On South Africa's 2015 Budget Laws

by Lorys Charalambous,, Cyprus

02 September 2015

Following a Ministry of Finance consultation that closed on August 24, and the subsequent presentation of the draft 2015 Budget Bills in the South African Parliament, the Standing Committee on Finance (SCoF) has now made its own request for comments on the legislation.

The 2015 Draft Taxation Laws Amendment Bill (TLAB) and the 2015 Draft Tax Administration Laws Amendment Bill (TALAB) would give effect to tax proposals announced in the Budget in February this year. Changes to tax rates and thresholds announced in the 2015 Budget were already included in previous legislation.

The draft TLAB's proposals include: the closure of a loophole that enables the avoidance of estate duty through excessive contributions to retirement funds; transitional tax amendments resulting from the regulation of hedge funds as collective investment schemes; and measures to counter tax-free corporate migrations.

Other changes would see the withdrawal of special foreign tax credits for service fees sourced in South Africa and the reinstatement of the controlled foreign company diversionary income rules to prevent the shifting of profits offshore through the sale of goods and services.

Meanwhile, the draft TALAB would provide for the collection of information by South African financial institutions regarding the Foreign Account Tax Compliance Act intergovernmental agreement with the United States. It would also further clarify matters concerning South Africa's permanent Voluntary Disclosure Program.

The SCoF is inviting further comments on the legislation by September 14, 2015.

TAGS: individuals | South Africa | compliance | tax | investment | business | tax information exchange agreement (TIEA) | tax compliance | law | retirement | investment funds | hedge funds | fees | tax credits | agreements | legislation | transfer pricing | regulation | legislation amendments | Compliance | Africa | Tax

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