Mazars Messenger March 2020: Special Tax Edition
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Mazars Messenger March 2020: Special Tax Edition
In this issue our tax experts focus on implications resulting from Treasury's 2020/2021 Budget:
1.) Budget speech 2020 aims to win back investor confidence
2.) 2020 Budget is the boldest in recent years
3.) New exchange control and SARS procedures for emigrants
4.) Tax-free bursary schemes loophole to be closed
5.) Tax and deceased estates
6.) At a loss: Treasury's proposal to limit the use of assessed tax losses
7.) Tax treatment of excessive debt financing under review
You will also find handy tax calculators as well as your tax deadlines for March.
1.) Budget speech 2020 aims to win back investor confidence
2.) 2020 Budget is the boldest in recent years
3.) New exchange control and SARS procedures for emigrants
4.) Tax-free bursary schemes loophole to be closed
5.) Tax and deceased estates
6.) At a loss: Treasury's proposal to limit the use of assessed tax losses
7.) Tax treatment of excessive debt financing under review
You will also find handy tax calculators as well as your tax deadlines for March.
Keep scrolling to view individual articles, download the full edition in pdf as well as other informative Budget-related info documents.
Documents
Budget speech 2020 aims to win back investor confidence.
Minister Tito Mboweni walked the tightrope in delivering his Budget Speech 26 February 2020. In an effort to preserve the last remaining investment grade status he had to demonstrate to the ratings agencies that South Africa was applying appropriate measures of fiscal discipline in cutting expenditure and limiting the amounts allocated to underperforming SOEs, whilst not overburdening South Africans with taxes.
2020 Budget is the boldest in recent years.
The 2020 Budget Speech, delivered on Wednesday 26 February by Minister of Finance, Tito Mboweni, contained several pieces of good news for taxpayers. At the same time, the Minister has taken a bold step in committing government to curtailing spending, which may have far-reaching consequences if it fails.
New exchange control and SARS procedures for emigrants.
Due to the change to the foreign employment exemption coming into effect on 1 March 2020, there has been a spurt of expats approaching both the South African Revenue Service (SARS) and the South African Reserve Bank (SARB) to formalise their permanent exit from South Africa, in order to not have to pay tax in South Africa on their foreign employment income.
Tax-free bursary schemes loophole to be closed.
The ability for employers and employees to structure their remuneration package to include a tax-free bursary or scholarship is one of the few mechanisms left to increase an employee’s take-home pay. Employees have been able to use their tax savings resulting from the tax-free bursary or scholarship to contribute to their own or children’s education and retirement savings.
Tax and deceased estates
The 2020 budget speech left some people with mixed emotions, but all in all, most people found it to be positive, perhaps the most positive budget speech in the past number of years.
At a loss: Treasury's proposal to limit the use of assessed tax losses
In his recent Budget Speech, Minister Mboweni proposed tax legislative amendments affecting the use of assessed losses. This article explores the practical implications for taxpayers of these proposed amendments.
Tax treatment of excessive debt financing under review
“Government proposes to restrict net interest expense deductions to 30 percent of EBITDA.”
Minister Mboweni’s 2020 Budget Review has been received as a largely positive one by most South Africans, although aspects such as the country’s increasing levels of debt, have left many worried. Ironically, one of the positives from the Budget is that Government has issued a discussion document detailing the proposed tax treatment of SA companies which are excessively financed by way of debt (the Discussion Document) – a topic which the previous Minister of Finance raised as a concern in 2018, and one which has been a source of great uncertainty for taxpayers.
Minister Mboweni’s 2020 Budget Review has been received as a largely positive one by most South Africans, although aspects such as the country’s increasing levels of debt, have left many worried. Ironically, one of the positives from the Budget is that Government has issued a discussion document detailing the proposed tax treatment of SA companies which are excessively financed by way of debt (the Discussion Document) – a topic which the previous Minister of Finance raised as a concern in 2018, and one which has been a source of great uncertainty for taxpayers.
Tax Calculators
This year, most taxpayers will be happy to note they have been given some real relief. Use the tax calculators below to see just how much.