1. Draft Revenue Laws Amendment Bill, 2008 and
Comments on
Draft Revenue Laws Amendment Bill, 2008
and
Draft Revenue Laws Second Amendment Bill, 2008

2. General comments
Clause 4 - Insertion of section 25B into Estate Duty Act 45
Business purpose test?
Clause 6(1)(b) - Definition of “contributed tax capital”
What about existing companies
Clause 6(1)(f) - Definition of “pension fund”
Typing correction

3. Clause 11(1)(a) and 11(2) – Insertion of section 8C(1A)
capital distributions in respect of restricted equity instruments received or accrued between 1 October 2007 and 22 September 2008?
Clause 15(b) – Increase in basic exemption for recreational clubs
Will it apply to dividends once the withholding tax is introduced?

4. Clause 21 - Insertion of section 12J of the Act
Business plan
VCC’s gross income “solely from financial instruments”
Impact on “small business corporation” status of another company owned by the shareholder
Clause 25 – Deduction in respect of the sale of certain residential units
interest on amount owing

5. Clause 61 - “Personal service provider”
Includes independent contractors?
Tax rate
Employment companies?
Application of section 23(k)
Effective date 1 March 2008
Safe harbour: 3 or more full-time employees
Para 5(a) of the Fourth Schedule: labour broker exemption certificates

6. Clause 62(e) – Payroll giving
Deduction limited to 5% of remuneration
Section 18A deduction 10%
Re-determination provision required
Clause VAT Act: Amendment of section 41B
Publication of rulings

7. Clause 66 – Insertion of the Sixth Schedule: Presumptive turnover tax
Exclusion of professionals
Also debarred from small business corporation concession until 3 or more full-time employees
Exclusion of vendors
Exclusion of trusts
Permitted investments
dormant companies
Exclusion if proceeds from capital asset disposals exceed R1 million over a 3-year period

8. Presumptive turnover tax (cont.)
Taxation of capital gains
Previous allowances to be added back but assessed losses are foregone
Transitional rules on deregistration
Provisional tax?
Records of assets and liabilities?

9. II. Draft Revenue Laws Second Amendment Bill, 2008
Clause 13: Deleted of “basic amount” rule
Unrealistic to estimate 90% of taxable income by the last day of the financial year
Proposal to bring last date for payment forward by 2 days at end-March
Current provision for interest (section 89sex)

10. Thank you!