TAX STATUS OF MUNICIPAL ENTITIES PricewaterhouseCoopers Business School Tax-4-TBAs COMPANIES (2) May 2011 FOR INTERNAL USE ONLY

Contents VAT within Municipal Entities PAYE within Municipal Entities AG and VAT SARS developments The holding of shares brings with it a host of tax implications, both in respect of the way shareholders manage their shareholdings, and in respect of the dealings between companies and their shareholders. The purpose of this training session is to offer an overview of the major tax issues related to the holding of shares. Whilst companies and shareholders can not always be expected to know all the detailed rules related to the tax treatment of share-related transactions and events, it is still important to have an awareness of the types of issues that may arise. With the proliferation of corporate restructurings and other share-related events, companies and shareholders are becoming increasingly confused about the likely current or future impact of these events. An important point is to have an overall awareness of the issues so that professional advice can be sought appropriately. The following abbreviations are used in these notes : DT : Dividend Tax IN : Interpretation Note (issued by SARS) ITA : The South African Income Tax Act (Act 58 of 1962) PN : Practice Note (issued by SARS) s : section (e.g. “s10 ITA” means section 10 of the Income Tax Act) SARS : The South African Revenue Service STC : Secondary Tax on Companies 8th Sch. : The Eighth Schedule to the ITA (The ITA currently has 10 schedules) PLEASE ALSO NOTE that, in order to avoid getting overwhelmed by all the technical complexities, the language used in the rest of these notes is deliberately simple –and will therefore sometimes be technically imprecise (e.g. will not always capture 100% of each and every proviso, requirement, etc.). Tax Status of Municipal Enteties 11/23/2018

VAT within Municipal Entities Output VAT Input VAT ERP system Grants received/paid What to do with assessments SCM and VAT Tax Status of Municipal Enteties 11/23/2018

PAYE within Municipal Entities Tax tables Fringe benefits Reimbursement of expenses Allowances Tax Status of Municipal Enteties 11/23/2018

AG and VAT Recon of VAT votes Valid Tax Invoices VAT Vendors Tax Status of Municipal Enteties 11/23/2018

SARS developments Record keeping (S29, S30 and S31) New penalties (S223) Voluntary disclosure program Time limitation Tax Status of Municipal Enteties 11/23/2018

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