Page 1105 - SAIT Compendium 2016 Volume2

MEMORANDUM ON THE OBJECTS OF TAX ADMINISTRATION LAWS AMENDMENT BILL, 2015
of taxable income. These estimates are therefore a pre-requisite before liability to pay under paragraph 17 can arise. Liability to pay provisional tax is thus premised on a taxpayer rst submitting to SARS an estimate of taxable income. The recently promulgated paragraph 20(2A) deems a provisional taxpayer who has failed to submit a second provisional tax estimate to have submitted a NIL estimate. This paragraph is silent as to the extent of its operation (it does not limit its operation to paragraph 20 only) and therefore the NIL submission must be considered to be a NIL submission for all purposes that estimates are submitted under the Fourth Schedule. The proposed amendment clari es that this paragraph will apply for purposes of paragraphs 19 and 20. Paragraph 27 (the penalty for late payment of provisional tax) may only be levied when a provisional taxpayer fails to pay an amount of provisional tax for which he or she is liable. Thus, in order for the late payment penalty to be capable of being levied, there must be a liability to pay provisional tax. The liability to pay provisional tax is premised on the estimate. If the taxpayer submits the estimate late, that estimate is deemed to be a NIL estimate. As the estimate is NIL, there is no resulting liability to pay provisional tax. Consequently, if there is no liability to pay, there can be no failure to pay on time, and thus no late payment penalty can be charged. The proposed amendment addresses this situation by replacing the words ‘nil submission’ with ‘an estimate of an amount of nil taxable income’. This provision has, furthermore, also been amended to insert a time period to indicate by when a taxpayer will be considered as having submitted an estimate of an amount of nil taxable income i.e. where the estimate in respect of the relevant provisional payment is submitted prior to the date of the subsequent provisional payment under paragraph 21, 23 or 23A, the deeming provision in terms of this paragraph will not apply.
2.18 Income Tax Act, 1962: Amendment of paragraph 29 of Fourth Schedule
The proposed amendment removes the reference to paragraph 11B as this paragraph is being deleted. Furthermore, the spelling of employees’ tax is corrected.
2.19 Income Tax Act, 1962: Amendment of paragraph 30 of Fourth Schedule
Paragraph 30(1)(h) is applicable to a condition prescribed under paragraph 13(12). Subparagraph (12) was deleted by section 11(1)(b) of the Tax Administration Laws Amendment Act, 2013, and the whole of paragraph (h) is accordingly deleted.
2.20 – 2.24 Excise Duty Act, 1964:
2.25 Value-Added Tax Act, 1991: Amendment of section 16
The proposed amendment clari es the policy as set out in Interpretation Note 49, that the purpose of section 16(2)(f) is to substantiate the entitlement to the deduction referred to in section 16(3)(c) to (n). Section 16(2)(g) provides relief to recipient vendors when they are unable to obtain the correct information or documentation from supplying vendors.
2.26 Value-Added Tax Act, 1991: Amendment of section 20
The proposed amendment relaxes the particulars required for a tax invoice without compromising the audit trail or policy intent for the requirements of the section.
2.27 Value-Added Tax Act, 1991: Amendment of section 21
The proposed amendment relaxes the particulars required for a credit note and debit note in accordance with the proposed amendment in paragraph 2.26.
2.28 Value-Added Tax Act, 1991: Amendment of section 41
Section 99 of the Tax Administration Act, 2011, speci es the limited time periods within which the Commissioner may make an additional assessment in terms of Chapter 8 of that Act. Furthermore, section 99(2) of that Act prescribes the circumstances when the prescription periods will not apply e.g. fraud, misrepresentation or non-disclosure of material facts. Paragraphs (aa) to (cc) of section 41(d) are in essence covered by the provisions of section 99(2), and it is proposed that these paragraphs be deleted to avoid any duplication. The proposed amendment effects this change and hence only the provisions of section 99(2) will apply in future.
2.29 Skills Development Levy Act, 1999: Amendment of section 1
Section 1(1) de nes a ‘penalty’ as any penalty payable in terms of section 12. Section 6(5) requires the Commissioner to report penalties collected to the Director-General. Section 12(1) refers to late payment penalties. Additional penalties were previously levied under sections 12(3) and (4) on an employer who failed to pay an amount of levy with the intent to evade that employer’s obligation under the Act. However, with the inception of the Tax Administration Act, 2011, the additional penalty provisions under section 12(3) and (4) were deleted from the Act and are now dealt with under the understatement penalty regime in Chapter 16 of the Tax Administration Act, 2011. The only penalty therefore remaining in section 12 is the late payment penalty. The effect of the amendment is that the Commissioner’s reporting obligation in section 6(5) is limited to penalties as speci cally de ned in section 12 which refers to late payment penalties only. Consequently the Commissioner’s reporting obligation in section 6(5) is limited to penalties as referred to in section 12 (i.e. late payment penalties). In order for the Commissioner to be able to report on all penalties levied in terms of the Skills Development Levies Act, a speci c reference to the understatement penalty regime in the Tax Administration Act, 2011, needs to be made. It is therefore proposed that the de nition of a ‘penalty’ in section 1(1) of the Skills Development Levies Act be amended so as to include an understatement penalty under Chapter 16 of the Tax Administration Act, 2011.
2.30 Skills Development Levy Act, 1999: Amendment of section 6
Ad para (a): As refunds are now dealt with in terms of section 190 of the Tax Administration Act, 2011, this provision can be deleted.
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