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Taxation Laws Amendment Act Signed

January 11, 2018

National Treasury

President Zuma assented to the Taxation Laws Amendment Act (TLAA) in December 2017.

The Tax Administration Laws Amendment Act (TALAA) was also signed.

The main tax proposals contained in the TLAA are:

• A levy on bargaining councils to address non-compliance;
• A higher fringe benefit exemption for bursaries to learners with disabilities;
• Removing the foreign employment income tax exemption in respect of South African residents;
• Addressing the circumvention of anti-avoidance rules dealing with share buy backs, dividend stripping and contributed tax capital;
• Strengthening anti-avoidance rules relating to mining environmental rehabilitation funds;
• Extending the application of controlled foreign company rules to interposed foreign trusts and foreign foundations;
• Changes in the tax treatment of banks due to IFRS9; and
• Tax amendments due to the SAM framework for long term insurers.

The main tax administration proposals outlined in the TALAA include:

• Assisting micro businesses transitioning into the small business corporation system;
• Employees’ tax and reimbursement of travel expenses;
• Application of the cap on deductible retirement fund contributions;
• Taxation of interest payable in respect of normal tax by SARS;
• Phased implementation of Tax Administration Act, 2011, interest rules by tax type; and
• Transitional arrangements regarding processes before commencement of the new Customs Acts.

During December, the following notices were published:

• Notice 194 – fit and proper requirements for financial services providers.
• Notice 195 – Financial Services Board language policy.
• Notice 1407 – replacement of policy holder protection rules – long-term insurance.
• Notice 1433 – replacement of policy holder protection rules – short-term insurance.
• Notice 1437 – amendment of regulations made under section 72 of the Long-Term Insurance Act.
• Notice 1438 – commencement of sections 95, 109(e), (k) and (1), 114(d) and 135 of Financial Services Laws General Amendment Act.
• Notice 1439 – amendment of regulations made under section 70 of the Short-Term Insurance Act.
• Notice 1449 – Draft Financial Sector Regulation Act regulations published for comment.