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Members of the public are randomly emailed with false “spoofed” emails made to look as if these emails were sent from SARS, but are in fact fraudulent emails aimed at enticing unsuspecting taxpayers to part with personal information such as bank account details

These emails contain links to false forms and false websites made to look like the “real thing”, but with the aim of fooling people into entering personal information such as bank account details which the criminals then extract and use fraudulently.

SARS’s warning to Taxpayers:

Please note these are scams and SARS taxpayers should take note of the following:

  • Do not open or respond to emails from unknown sources.
  • Beware of emails that ask for personal, tax, banking and eFiling details (login credentials, passwords, pins, credit / debit card information, etc.) as SARS will never ask taxpayers for such information in an email.
  • SARS will not request your banking details through the phone, email or websites.
  • Beware of false sms’s

We have attached screen shots from a Phishing Attack

N.IMG_20141020_195501 IMG_20141020_194528 IMG_20141020_194506 IMG_20141020_194440 IMG_20141020_194404

Image  —  Posted: October 22, 2014 in Uncategorized
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The tax treatment of life and disability premiums and policy proceeds was aligned in 2013, with effect from 1 March 2015. The premiums will not be deductible and the policy proceeds will be tax free. However, the wording prohibiting the deduction of the premium for tax purposes does not cover all circumstances, which may allow providers to argue that certain structured products fall outside the ambit of the legislation. It is proposed that the wording be clarified so that premiums paid on all personal insurance policies not be allowed as a deduction against income, and that the policy proceeds from such policies are tax free.

Background

As a general matter, there are currently two forms of disability insurance plans that are offered to individuals – capital protection and income protection. The tax outcomes of each differ in terms of premiums and pay-outs. Disability policies are offered to salaried workers, employers and self-employed business-owners (including professionals). In the case of capital protection plans, cover exists to protect individuals against the loss of the individual’s income earning capacity (e.g. through loss of a limb or mental capacity). In plans of this kind, no deduction is available in respect of premiums paid, but there is no tax payable in respect of insurance policy pay-outs. In the case of income protection plans, cover exists to protect individuals against the loss of future income (focusing on the negative income impact of the disability rather than the disability itself). In plans of this kind, premiums are deductible but tax fully applies on policy pay-outs.

Reason for change

The distinction between disability capital protection and income protection is unfortunate. The net benefit of these plans is often economically the same with the terminology easily blurred to suit the client’s tax needs. The unique tax treatment of disability plans aimed at income protection is also questionable when the overall tax treatment of individual insurance is considered Both life and disability insurance essentially have the same objective – to protect the financial future of an individual and his or her family through insurance against an adverse personal event (death or disability). The amount of cover chosen is designed ultimately for future “income” protection whether the payments come in the form of a lump sum for reinvestment (with reinvestment earnings providing the desired safety) or as an annuity. In the end, life and disability plans premiums are essentially expenses of a personal nature. Policy proceeds are mainly designed to protect personal lifestyles, not to fund business continuation. Even if some funds are ultimately applied for business continuation, policy proceeds for business should be deductible when applied – not the initial insurance premiums (being too remote from the trade itself with the premiums essentially acting as disguised “deductible” reserve for expenses that are often personal in nature).

Amendments to give effect to the above

The new legislation treats life and disability premiums and pay-outs in the same manner for tax purposes, regardless of whether the policy is aimed at capital or income protection. The key aspect of these plans is the personal nature of the contingency involved, not the potential use of funds (a use which may or may not be deductible at a later date). Going forward, premiums paid by natural persons in respect of life, disability and severe illness policies will no longer be deductible per se if the policies are aimed at income protection. However, all pay-outs on life, disability and severe illness policies will be tax-free, irrespective of whether the pay-out takes the form of a lump sum or an annuity. The same dispensation will apply in the case of disability policies, so that annuities payable in respect of a disability policy will be free from tax. Some employers pay a premium in respect of an employer-provided insurance policy for the benefit of employees. The premiums will be deductible for the employer, as long as the premiums are taxed as a fringe benefit in the hands of employees. With the employee being taxed on the premium (with no subsequent deduction available), the policy pay-outs will be tax-free. Lastly, the system will operate cleanly going forward. There will be no transitional period for current policy holders, meaning that premiums going forward will no longer be eligible for deduction even if the plans are pre-existing. On the other hand, all policy pay-outs will be tax free even if the policy previously generated deductible premiums.

Effective date

The amendment to section 10(1)gG) of the Income Tax Act, insertion of sections 10(1)(gI)and 23(r)and deletion of paragraph 12C(2) of the Seventh Schedule to the Income Tax Act are effective as from 1 March 2015 and will be applicable in respect of expenditures incurred as well as receipts and accruals in respect of years of assessment commencing on or after that date.

Background

The current tax framework exempts authors of copyright on revenue amounts received for the foreign assignment or licensing of copyright. More specifically, the exemption applies if the author is a natural person, the first owner of the copyright and the amount received is taxable in another country.   There is no similar exemption if the transfer of copyright is subject to capital gains taxation.

Reasons for change

The copyright blanket exemption for residents is out of sync with the current world-wide taxation paradigm and does not take into consideration the provisions of DTAs. As a general matter, South Africa has a primary taxing right in respect of the foreign transfer of copyright by a resident unless the transfer is attributable to a foreign permanent establishment. On the other hand, royalties received in respect of the foreign licensing of copyright are subject to a residual secondary taxing right. The exercise of the secondary taxing right means that South Africa will generally grant a credit (i.e. rebate) for the foreign taxes paid.

The change

The copyright exemption for authors has been deleted.

Effective date

The amendment will be effective for years of assessment commencing on or after 1 March 2014.

Amendment to section 10(1)(m) of the Income Tax Act and paragraph 64 of the Eighth Schedule

 

http://www.news24.com/SouthAfrica/News/Bookkeeper-appears-on-631-counts-of-fraud-20140930

Link  —  Posted: September 30, 2014 in For the Entrepreneurs, Uncategorized

http://www.vusi.co.za/wordpress/wordpress/?p=324

http://www.fin24.com/Entrepreneurs/Opinions-and-Analysis/Perfect-Entrepreneurs-biggest-enemy-20140922

https://sait.site-ym.com/news/193624/AD-CC-v-CSARS-DTC-VAT-1069-25-July-2014.htm

Posted: August 25, 2014 in Taxes
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http://www.news24.com/SouthAfrica/News/Accountant-jailed-for-stealing-from-orphans-20140825

What to do if you receive a letter of demand?

When you have received a letter of demand from SARS it is advised to respond immediately and answer it to the best of your ability. And because SARS legislation has the power to obtain all kinds of information from its taxpayers it can help to review and assess all tax assessments. Legislation also gives SARS the ability to issue an additional assessment three years after the date of original assessment in order to get more tax. This three-year rule applies to all cases except where there has been fraud, misrepresentation by the taxpayer or non-disclosure of facts in which there is no time limit for.

What if SARS requests for documents supporting your deduction claims?

SARS has the right to request these documents, as there is a duty on all taxpayers to keep documents for at least five years, even though the assessment may lapse after the three years.

Does SARS have the right to levy a 200% additional tax?

Yes, SARS does have the right to levy a 200% penalty if the taxpayer is in any way in default. That includes if the taxpayer:

– Omits an amount that should have been included in his or her return

– Failed to declare all income

– Made an incorrect statement

– Claimed a deduction they are not entitled to

– Doesn’t have supporting documents or deducted tax that doesn’t related to their trade

If you receive a letter of demand from SARS and unsure how to proceed call a qualified tax professional that will be able to assist you. At Numbrfactory, we have qualified tax specialists that can help you with any tax related problems.