Browsing by Author "Van Wyk, Danielle"
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- ItemAn analysis of the discretion of the SARS and the relevant factors considered following a request for the suspension of the payment of disputed tax in terms of section 164(3) of the Tax Administration Act 28 of 2011(Stellenbosch : Stellenbosch University, 2015-12) Van Wyk, Danielle; Van Zyl, Linda; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accounting.ENGLISH ABSTRACT: Section 164(3) of the Tax Administration Act gives a senior SARS official (‘the SARS’) the discretion to suspend the payment of disputed tax or a portion thereof, having regard to relevant factors, including a list of specified factors. In this study the uncertainties regarding the discretion of the SARS and the meaning and relevance of the specified factors were examined. The objectives were to determine whether the amendments to section 164(3) addressed some of the concerns and uncertainties, to establish a basic understanding of the term ‘relevant factors’ and the impact thereof, to analyse the impact of the constitutional right to just administrative action on the manner in which the section 164(3)-discretion is exercised by the SARS, and to determine whether the ‘suspension of the payment’ of disputed tax constitutes the granting of ‘credit’ in terms of the NCA. It was established that the SARS has made several amendments to the specified factors, which resulted in some of the original concerns and uncertainties being addressed, many remaining unaddressed and creating new ones. For a factor to be considered ‘relevant’ it was determined that a close and logical sufficient connection must exist between the evidence provided by the taxpayer (factor) and the issue (request), which will make the granting of the request possible. The factor will most probably be considered with reference to all the other specific relevant factors in total. The relevance of a factor is also based upon the discretion of the SARS which adds an element of subjectivity. However, if the decision in terms of section 164(3) is unlawful, unreasonable or procedurally unfair, a taxpayer has the right to a review in terms of the PAJA. It was established that the request will form the foundation of a review application and the taxpayer therefore needs to ensure that all relevant information is included when submitting a request in terms of section 164(3). It was also concluded that a request for the suspension of payment can be equated with a credit transaction and, consequently with a ‘credit agreement’ in terms of section 8(4)(f) of the NCA. It was established that although the Tax Administration Act does contain some similarities to the relevant provisions in the NCA, the NCA can be used as guidance to simplify the process and specified factors in terms of section 164(3). The Legislator’s original intention with section 164(3) was to formalise the circumstances where the payment of tax will be required, despite objection or appeal. Based upon the existing concerns and uncertainties regarding the factors, as well as the impact of the discretion exercised by the SARS, it is however questionable whether section 164(3) in its current form endorses the Legislator’s original intention. It remains to be seen whether the Legislator will take the effect of the right to just administrative action, the unresolved concerns and uncertainties and the recommendations based on the provisions of the NCA into account in future amendments to section 164(3).
- ItemA critical analysis of the meaning of the term ‘income’ in Sections 7(2) to 7(8) of the Income Tax Act No. 58 of 1962(AOSIS Publishing, 2017) Van Wyk, Danielle; Dippenaar, MareliBackground: Section 7 of the Income Tax Act 58 of 1962 (the Act) was introduced as an anti-avoidance measure to prevent tax avoidance by means of a donation, settlement or other disposition in various types of schemes. In terms of this section, in certain circumstances, ‘income’ is deemed to be income received by or accrued to a taxpayer. Despite the fact that the term ‘income’ has been used in Section 7 from the time that it was first introduced into the Act and the fact that it is defined in section 1 of the Act, there still remains uncertainty regarding the intention of the legislature and the actual meaning of the term in terms of Section 7. Aim: The objective of the study is to understand whether the term ‘income’, as used in Sections 7(2) to 7(8) of the Act, is used in its defined sense or if it should be ascribed a different meaning. Setting: This article examines existing literature in a South African income tax environment. Method: A non-empirical study of existing literature was conducted by performing a historical analysis within a South African context. A doctrinal research approach was followed. Results: Possible interpretations determined include ‘income’ as defined in section 1 of the Act, namely ‘gross income’ (also defined) less exempt income, ‘gross income’, profits and gains or ‘taxable income’ (i.e. ‘income’ less allowable expenditure, deductions and losses) and ‘gross income’ less related deductible expenses and losses. Conclusion: It was found that the meaning of ‘income’, for purposes of Sections 7(2) to 7(8), remains an uncertainty, and it is recommended that the wording of Section 7 be amended to reflect the intended meaning thereof.
- ItemExploring the South African tax consequences of a residential property lottery(AOSIS Publishing, 2018) De Lange, Silke; Van Wyk, DanielleBackground: Disposing of a residential property by way of a lottery sounds peculiar, but a number of these transactions relating to residential properties in South Africa have recently taken place. As this is not an ordinary way of disposing of and acquiring residential property, it is submitted that it is necessary to explore the tax consequences resulting from such a transaction. Aim: The objective of this article is to explore some of the most pertinent South African tax consequences of such a residential property lottery transaction, from the viewpoint of the owner (‘seller’) who disposes of the residential property and the winner (‘purchaser’) who acquires the residential property in terms of the lottery. Setting: This article examines existing literature in a South African income tax environment to explore the tax consequences resulting from a disposal and acquisition of residential property by way of a lottery. Methods: A non-empirical study, which entails the study of the various South African tax provisions and an application thereof to the facts of the lottery transaction, was conducted. A doctrinal research approach was followed within the realm of exploratory research. Results: Disposing of and acquiring residential property by way of a lottery results in a number of actual tax consequences, as well as a number of uncertainties regarding taxes (referred to as uncertain considerations). Conclusion: The conclusion is reached that the possible tax consequences of such a transaction can create tax risks or can result in unintended tax consequences relating to inter alia income tax (including capital gains tax), transfer duty and donations tax. The insights provided in this article do not always result in conclusive answers but they may, however, result in further research to be conducted, and a number of such areas for further research were identified. Should residential property lottery transactions occur more frequently in South Africa in future, it is recommended that the South African Revenue Services (SARS) issues clear guidance on the tax treatment from the perspective of the owner and the winner of such a transaction to ensure that any uncertainties are dealt with correctly.
- ItemRelevant factors for the suspension of the payment of disputed tax - a comparative analysis(AOSIS Publishing, 2016) Van Zyl, Linda; Van Wyk, DanielleSection 164(3) of the Tax Administration Act No. 28 of 2011 gives a senior SARS official the discretion to suspend the payment of disputed tax or a portion thereof, having regard to relevant factors. Limited guidance is available in this regard. The objectives are to establish the concerns and uncertainties regarding the relevant factors and to determine whether a ‘suspension of the payment of disputed tax’ in terms of section 164(3) constitutes the granting of ‘credit’ in terms of a ‘credit agreement’ in terms of the National Credit Act, Act No. 34 of 2005. This is achieved by adopting an explanatory research approach and performing a literature review and comparative analysis respectively. The conclusion is reached that the current factors listed are not necessarily the most relevant ones. Recommendations are made to simplify the process and to revise and improve the wording regarding the relevant factors.
- ItemThe right to just administrative action in the context of suspending the payment of disputed tax(North-West University, Faculty of Law, 2017) De Lange, Silke; Van Wyk, DanielleSection 164(3) of the Tax Administration Act 28 of 2011 (hereafter TAA) provides a senior South African Revenue Service official (hereafter, respectively, SARS and senior SARS official) with discretionary powers to suspend the payment of disputed tax or a portion thereof, having regard to relevant factors, if the taxpayer intends to dispute the liability to pay such tax. Exercising a discretion in terms of section 164(3) of the TAA constitutes administrative action. Section 33(1) of the Constitution of the Republic of South Africa, 1996 (hereafter Constitution) grants everyone the right to just administrative action that is lawful, reasonable and procedurally fair and the Promotion of Administrative Action Act 3 of 2000 (hereafter PAJA) was promulgated to give effect to this right. The objective of this article is to apply the right to just administrative action to the manner in which the discretion in terms of section 164(3) of the TAA is exercised. This is achieved by adopting an explanatory research approach and performing a literature review of the discretion process in terms of section 164(3) of the TAA and the constitutional obligations in terms of section 33 of the Constitution as given effect to in PAJA. As the discretion exercised by the senior SARS official is influenced directly by the right to just administrative action, it should be exercised in a lawful, reasonable and procedurally fair manner to ensure compliance with the Constitution and the PAJA. For the discretion to be exercised in a lawful manner, the senior SARS official must at least be authorised to exercise the discretion in terms of the TAA and comply with the procedures and conditions stated in section 164(3) of the TAA. For the decision to be considered reasonable, the decision must be, at the minimum, rational and proportional, and to ensure that the discretion is exercised in a procedurally fair manner, SARS should comply with at least the relevant compulsory elements in terms of section 3(2)(b) of PAJA. A decision in terms of section 164(3) of the TAA which fails to meet the requirements of lawfulness, reasonableness and/or procedural fairness will be subject to review on several grounds listed in section 6(2) of PAJA.