How does taxation affect cryptocurrencies in South Africa?

Cryptocurrencies are increasing in popularity in South Africa. One of the key issues is how do taxation laws affect cryptocurrency in South Africa. Is the use of cryptocurrency legal in South Africa? Simple answer, yes, it is. The complicated part is, is whatever you are doing with the cryptocurrency legal? For most of us, the [...]

Tag and Drag

The importance of a water-tight shareholders’ agreement that is in line with the company’s memorandum of incorporation and the provisions of the Companies Act, No. 71 of 2008 (“Companies Act”) cannot be emphasized enough. A shareholders’ agreement that is not drafted in line with its own memorandum of incorporation and the Companies Act is void [...]

SARS is allowed to dig into your bank account

Be aware when you have outstanding tax debt as the Tax Administration Act 2011, as amended (TAA), empowers the Commissioner of the South African Revenue Service (SARS) to appoint a third party to withhold and pay over to SARS any amounts due by a taxpayer in terms of the relevant tax Act.  Such a third [...]

Thin Capitalisation

Companies are funded (“capitalised”) in two ways, namely through a mixture of debt and equity. In certain instances, interest payments incurred in the production of income are deductible for tax purposes, while distributions in the form of dividends are not tax deductible. The way in which a company is structured, ie the company’s debt to [...]

A new court ruling says you may not need to provide payslips or bank statements anymore

In November 2016, a number of retailers were taking the National Credit Regulator (NCR) and the Minister of Trade and Industry (DTI) to court with the aim of having parts of the affordability assessment criteria declared unlawful and constitutionally invalid. The High Court issued a major ruling, in favour of these retailers, against the Minister [...]

South Africa’s new VAT rate…v(wh)at you need to know regarding the sale of immovable property

During the budget speech of 2018, South Africa’s then Minister of Finance, Malusi Gigaba, made a nationwide announcement of the national increase on value added tax (“VAT”) rate from 14% to 15%. This is the first national increase since 1993. The VAT increase will be effective from 1 April 2018. It goes without saying that [...]

Asset Purchase or Share Purchase – that is the question.

When a buyer is considering purchasing a business (“Target”), invariably prior to an extensive due diligence, the buyer often reaches the following crossroads: do they purchase the business in its entirety (“Share Purchase”), do they purchase the business as a going concern or do they cherry-pick the parts of the target business that are most [...]

New impacts on the Net Income of Controlled Foreign Companies

The minister of Finance raised a concern that the current Controlled Foreign Company (“CFC”) rules do not include foreign companies held by interposed trusts or foundations. South Africa force taxes on worldwide income of South African residents. The Income Tax Act contains anti-avoidance provisions. An example of one of these provisions was the introduction of [...]

The extension of preferential rights – the collateral consideration

Recent development in our law highlighted the implication of the verbal extension of preferential rights embodied in a written agreement. This article briefly discusses the legal principles surrounding pre-emptive rights, the new legal developments in this regard and the dangers associated with extending same. A contract may grant a preferential right to conclude a subsequent [...]

SARS is deducting my income tax

SECTION 12J OF THE INCOME TAX ACT NO. 58 OF 1962: SARS IS NOW PREPARED TO DEDUCT ALL YOUR TAXABLE INCOME: PART ONE One of the significant hurdles facing South Africa’s burgeoning small and medium-sized businesses is the access to equity finance. To assist in alleviating such difficulties, the government, in conjunction with the South [...]

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