On 21 July 2019, the South African Revenue Service (SARS) and the National Treasury has published 2019 Draft Taxation Laws Amendment Bill (Draft TLAB) and the 2019 Draft Tax Administration Laws Amendment Bill (Draft TALAB) for public comment.
The key proposals of the two draft bills are summarized in below:
Draft Taxation Laws Amendment Bill of 2019:
- Aligning the effective date of tax neutral transfers between retirement funds with the effective date of annuitization for provident funds
- Adjusting the withholding tax treatment of surviving spouses’ pensions to limit tax debts on assessment
- Addressing abusive arrangements aimed at avoiding the anti-dividend stripping provisions
- Clarifying the interaction between corporate reorganization rules and other provisions of the Income Tax Act
- Refining the tax treatment of long-term insurers
- Refining investment criteria and anti-avoidance measures for the Special Economic Zone regime
- Limiting the allowable deduction for investors investing in a venture capital company
- Reviewing the controlled foreign company (CFC) comparable tax exemption and addressing the circumvention of the anti-diversionary rules
Draft Tax Administration Laws Amendment Bill of 2019:
- Removal of requirement to submit a declaration to a regulated intermediary in respect of tax free investments
- Authorization for the Commissioner to prescribe rules relating to the making of advance foreign currency payments
- Alignment of time limitations on requesting refunds
- Model mandatory disclosure rules and non-compliance penalties
- Tax compliance certificates
The public now has the opportunity to submit comments to the National Treasury and the South African Revenue Service (SARS) on this proposed amendment and any other proposed amendments in the TLAB Draft and TALAB Draft. The deadline for public comments is 23 August 2019.
