TAX2601 UNIT 1 Introduction – Governments collect the income they need through taxation in order to provide services to citizens. (SA government has fiscal year 1 April 31 March) – List taxes or duties that are collected by SARS Income tax (capital tax, turnover tax, dividends tax) Value added tax (VAT) Estate duty Excise duty Customs duty Transfer duty Air passenger tax Securities transfer tax Unemployment insurance fund (UIF) Skills development levy (SDL The Income tax Act is administered by the Commissioner for SARS. The SA tax regime is set by National Treasury and administered by the Commissioner of SARS In SA, taxpayers are taxed on the residence basis of taxation. Persons who are residents are subject to taxation in respect of ALL the income they earn anywhere in the world. person not a resident, will be taxed on income earned from a South African source could – lead to double tax. INTERPRETATION OF TAX LAW The need for interpretation arise when Income tax Act not clear. Binding general rules are issued by CSARS these rules are binding on CSARS and taxpayers. – Interpretation are merely the opinion of SARS are not binding. A taxpayer can object to – an assessment even if SARS has assessed that taxpayer in terms of an interpretation note. When interpretation note provides guidance as to how commissioner intends to use discretion then interpretation note binding. A definition in the Income Tax Act will take precedence over – the definition in the Interpretation Act.
TAX2601 UNIT 1 – Introduction Governments collect the income they need through taxation in order to provide services to citizens. (SA government has fiscal year 1 April – 31 March) List taxes or duties that are collected by SARS Income tax (capital tax, turnover tax, dividends tax) Value added tax (VAT) Estate duty Excise duty Customs duty Transfer duty Air passenger tax Securities transfer tax Unemployment insurance fund (UIF) Skills development levy (SDL The Income tax Act is administered by the Commissioner for SARS. The SA tax regime is set by National Treasury and administered by the Commissioner of SARS In SA, taxpayers are taxed on the residence basis of taxation. Persons who are residents are subject to taxation in respect of ALL the income they earn anywhere in the world. person not a resident, will be taxed on income earned from a South African source – could lead to double tax. INTERPRETATION OF TAX LAW The need for interpretation arise when Income tax Act not clear. Binding general rules are issued by CSARS – these rules are binding on CSARS and taxpayers. Interpretation are merely the opinion of SARS – are not binding. A taxpayer can object to an assessment even if SARS has assessed that taxpayer in terms of an interpretation note. When interpretation note provides guidance as to how commissioner intends to use discretion – then interpretation note binding. A definition in the Income Tax Act will take precedence over the definition in the Interpretation Act.
TAX2601-summary.docx