On 31 July 2023, the National Treasury and the South African Revenue Service (SARS) released the 2023 Draft Tax Bills and Draft Regulations. The purpose of the 2023 Draft Tax Bills and Draft Regulations is to implement the tax recommendations that were presented in the 2023 budget review, which were a part of the budget speech delivered by the Minister of Finance on 22 February 2023. The draft 2023 publications include the following:
2023 draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill (2023 draft Rates Bill)
- 2023 draft Taxation Laws Amendment Bill (2023 draft TLAB)
- 2023 draft Tax Administration Laws Amendment Bill (2023 draft TALAB)
- Draft Regulations in terms of paragraphs (d) and (e) of the definition of “Research and Development” in section 11D (1) of the Income Tax Act,1962
- Draft amendments to the Regulations on domestic reverse charge relating to valuable metal in terms of section 74(2) of the VAT Act, 1991; and • draft Carbon Offset Regulations
Draft Explanatory Memoranda, which provide insight into the background and justifications for the proposed alterations, were made available, along with a Draft Memorandum outlining the purposes of the TALAB (Tax Laws Amendment Bill).
Key tax proposals contained in the 2023 draft include the following:
- Rooftop solar tax incentive
- Renewable energy tax incentive
- Research and Development tax incentive
- Urban Development Zone tax incentive
- Adjusting the minimum royalty rate for oil and gas companies
- Reviewing principles contained in Practice Note 31 of 1994
- Clarifying anti-avoidance rules dealing with third-party backed shares
- Refining the provisions applicable to unbundling transactions
- Tax treatment of deposit insurance scheme 3 of 6 • Clarifying the foreign business establishment exemption for controlled foreign companies
- Refining the participation exemption for the sale of shares in foreign companies
- Reviewing the VAT treatment of specific supplies in the short-term insurance industry
- Clarifying the VAT treatment of prepaid vouchers in the telecommunications industry
Proposed changes related to tax administration include the following:
- Advance Pricing Agreement Programme
- Employees’ tax registration requirement for non-resident employers
- Variation of employees’ tax withholding in respect of remuneration
- Expanding the general disclosure provisions for section 18A approved organisations
- Single window for advance passenger information and passenger name record data
- Enabling SARS’ new online traveller management system
- Expending the time period to submit a return where taxpayers disagree with an auto assessment.
- Alignment with anti-money laundering and combatting terrorism developments.
The invitation was issued on 31 July 2023 and members of the public are requested to submit written comments by 31 August 2023, to the following email addresses: 2023AnnexCProp@treasury.gov.za and acollins@sars.gov.za.
