Synopsis

A monthly journal, published by PwC South Africa, that gives informed commentary on current developments in the tax arena, both locally and internationally.

Through analysis of and comment on new laws and judicial decisions of interest, Synopsis helps executives to identify developments and trends in tax law and revenue practice that may affect their business.

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In this edition:

Synopsis Tax today - March 2024

In February 2024, the South African Revenue Service (‘SARS’) issued a Draft Interpretation Note on the Consequences of an Employer’s Failure to Deduct or Withhold Employees’ tax (‘the Draft IN’) for public comment. SARS concludes in the Draft IN that where an employer does not recover the amount paid by the employer to SARS from the employee, the employee will remain liable for income tax on the portion of their remuneration on which the employer failed to withhold the employees’ tax, with no credit for the employees’ tax paid by the employer. We disagree with SARS’ interpretation in this regard and set out the basis for our opposing view in our first article, having regard to applicable sections of the Income Tax Act 58 of 1962, as amended and the Tax Administration Act 28 of 2011, as amended.

In our second article we analyse the judgment in The Commissioner for the South African Revenue Service (‘SARS’) v J Company (case no. (14944/19) [2024] ZAWCHC 63) in which the court had to consider whether the taxpayer had to comply fully with SARS’ request for relevant material in terms of section 46 of the Tax Administration Act, No. 28 of 2011 (‘TAA’) and whether SARS was entitled to demand unredacted information from the documents provided. It is important for taxpayers to be aware of the extent of SARS’ information-gathering powers regarding requests for relevant material in terms of section 46 of the TAA, and that these are wide, with a relatively low threshold for SARS to meet.