The following pieces of legislation give effect to the tax proposals of the 2016-17 budget and the budgetary adjustments announced in the medium-term budget policy statement in October:
- Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2016
- Tax Administration Laws Amendment Act, 2016
- Taxation Laws Amendment Act, 2016
Some ways in which this new legislation may affect you:
-The ability of taxpayers to transfer wealth to their trusts without being subject to tax has been limited by the introduction of a new section (7C), which relates to interest-free or low-interest loans to trusts. As from 1 March 2017, the difference between official rate of interest, and the amount of interest charged on the loan to the trust, will be deemed to be a continuing donation made by the trust and will thus be subject to donations tax.
- Employees will now be taxed on the dividend proceeds received from the disposal or redemption of the underlying equity shares in Company Share Incentive Schemes.
- The expiry date for Employment Tax Incentive (ETI) has been extended until 28 February 2019 (effective date 01 October 2016), thus encouraging employers to hire young people by reducing the cost of employment to the employer.
- The period for Learnership Allowances has been extended to 31 March 2022. (Effective 1 October 2016 and applicable to Learnership Agreements entered into on or after that date).
- Car tyres will cost more with the introduction of a new tyre levy at a rate of R2.30/kg.
- Loss of privacy on bank accounts - From September 2017, a new international Common Reporting Standard (CRS) will allow governments to obtain detailed account information from financial institutions, enabling an annual automatic exchange of information with other jurisdictions.
- Overseas assets must be disclosed - the Special Voluntary Disclosure Programme (SVDP) provides a “grace period” during which previously undisclosed overseas assets can be declared (assets held between 1 March 2010 and 28 February 2015). The original term of the SVDP has been extended to 31 August 2017.
Should you have any concerns regarding how these changes in tax legislation may affect you, please contact us for assistance.