 Authored by: Tarissa Wareley, Immigration specialist at Xpatweb
The discovery of natural gas along the shores of one of the poorest countries in Africa has paved the way for Mozambique to become the next major supplier of liquified natural gas. The expected influx of expatriates and investments into the exploration of LNG has forced government departments to implement various measures to monitor as well as facilitate entry into Mozambique. The Rovuma Basin Decree 2/2014, although approved about six years ago, its various measures and concessions for immigration-related matters were not implemented until recently. This has been timeous in the booming projects in the oil and gas sector in Pemba, Coral Sul, and others. From an immigration perspective, this decree relaxes requirements, improves processing times, and removes layered processes. Sub-contractors and companies in the Mozambique LNG Project are expected to benefit greatly from its measures. These companies and their approved sub-contractors, together with a plan of development approved by the Government of Mozambique, will receive access to an online portal for submissions and processing of applications. The Ministry of Labour introduced this online portal to process applications related to the Rovuma Basin and for adjudication of any expatriate skillset that is required as part of the approved projects for the region. Overall Improvements to Mozambique’s Visa System Since access to the online portal is exclusive to companies and sub-contractors related to the approved projects in the Rovuma Basin, all other companies must continue to follow standard processing and requirements. Quicker processing times were included in the implementation of these measures. Short-term work permits can be expected to be processed in about 3 – 5 working days as opposed to the standard processing time of 3 - 4 weeks for companies in the non-oil gas sector. Additionally, companies, as part of their approved plan of development, receive a number of quotas allocated to them facilitating the long-term work permit process. Long-term work permits applied through available quota positions are also processed through the online portal in shorter timeframes of approximately 5 – 7 working days. Standard processing for such applications has generally been 3 –4 weeks. Allowing for online processing of the applications streamlines the application for a long-term work permit avoiding additional bureaucratic tasks as part of the application process. Certain requirements such as Certificate of Equivalences issued by the Ministry of Education, similar to the South African SAQA evaluation, have been removed, which usually results in an additional 4 weeks to the end-to-end processing of long-term work permit processes. Gateway to Residency in Mozambique Candidates with approved work permits under the online system may qualify to obtain a residence permit upon arrival instead of previously obtaining a work visa at a Mozambican High Commission abroad and an additional residence permit at the immigration department in the province they are expecting to work. Although this may be beneficial to all expatriates arriving into Mozambique for the LNG project, it is a process exclusive to companies with an approved plan of development with the Government of Mozambique. Overall, the changes have been timeous to the upcoming Mozambique LNG projects. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Xpatweb: HOLISTIC EXPATRIATE SOLUTIONS The Xpatweb group has been in existence for over 14 years and includes over 90 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents. For more information on Xpatweb please visit: Website: http://www.xpatweb.com/ LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/ Facebook:https://www.facebook.com/xpatweb/
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 South African legislation governing expatriate tax exemption is set to change dramatically from 1st March 2020, affecting South Africans worldwide. This includes anyone who has permanently settled in another country.
Those who do not comply with the new requirements face stiff penalties and risk up to two years in prison. To help expatriates understand their obligations, local tax firm, Tax Consulting South Africa, held special workshops on the topic in the UAE and Qatar. “The outstanding attendance at these presentations demonstrates that expatriates are desperate to avoid falling foul of the new law,” says Claudia Aires Apicella, Head of Financial Emigration at the firm. The general consensus after the events was, there are still many expatriates out there with their head in the sand regarding the change in legislation and therefore, failing to make proper arrangements to ensure that they are compliant and following proper procedure. What’s changed? The current Income Tax Act provides that if a South African in employed by either a local or foreign employer and renders services to them outside South African for longer than 183 days in any 12 month period, being continuously abroad for 60 of those days, their remuneration earned during that time shall be exempt from taxation by the South African Revenue Service (SARS). From 1st March 2020, the conditions for exemption remain the same. However, only the first R1 million in remuneration will be exempt, with earnings above that threshold being subject tax at a rate of up to 45%, payable to SARS. Now what? It is imperative that South African expatriates get themselves acquainted with the law and how it will affect them and avoid being fish bait to the many dodgy investment and aggressive tax schemes being punted at them. The lack of knowledge has also led to a number of expatriates being misinformed by SARS agents and inexperienced tax practitioners that, should they wish to return to South Africa upon retirement, they are required to reintegrate to the country, while remaining compliant. This is, however, untrue and misleading. There are a number of options available that could assist in alleviating the tax burden of expatriates whilst ensuring that they remain compliant. These include Financial Emigration and Double Tax Agreements (“DTA”) signed between two countries. These are safe and compliant planning options that help expats lessen their tax burden. Financial Emigration has been recognized and confirmed by SARS as a process in which one can cease their tax residency in South Africa, should one have a permanent or long-term intention to remain outside of South Africa on a permanent basis. On the other hand, the DTA is used in the instances where individuals who have the intention to return to South Africa or who are simply uncertain about their intention to return. It is important to note, however, that these options are specific and need to be applied on a case by case basis. The trip revealed and confirmed just how diverse the circumstances of South African expatriates living abroad are and are yet in the same boat when it comes to their tax affairs. Nevertheless, there is no one-size-fits-all solution to the amendment of the legislation. All in all there are a handful of South Africans becoming more informed but there are many out there who are still looking for guidance in these uncertain times, which the workshops aim to provide. The firm intends to travel to other MENA countries to hold more workshops on the new expatriate tax law change. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook: Tax Consulting South Africa  The Angolan government has been introducing several initiatives to encourage investment and business opportunities in the oil rich country since former president José Eduardo dos Santos stepped down.
The first new president in 38 years, João Lourenço, took over at the end of 2017. One of his first initiatives was to relax the visa requirements for countries like Botswana, Mauritius, the Seychelles, Zimbabwe and notably Singapore. Citizens from Namibia, South Africa, Mozambique, the Cape Verde, Rwanda and Zambia can enter Angola without having to apply for a business or tourist visa. “It is clearly an effort by the Angolan government to encourage business and investments into the country, and to alleviate the unavailability of foreign currency in the country and the challenges behind that,” says Tarissa Wareley, immigration specialist at Xpatweb. She says another innovative decision is to allow people to conduct business under a tourist visa. This is a concession to investors from countries who are still required to enter the country with a visa. “A tourist visa will now suffice, even though visitors will be doing business or negotiating investments.” Wareley says the government has also extended the validity of the tourist visa from 90 days to 120 days.The introduction of e-visa applications has streamlined the process to allow for easy access into the country. The e-visa will be issued within 24 hours. The normal processing times for visas range anything between two to three weeks. If there is an urgent need for a business or investors to enter Angola it will no longer be subjected to this delay. “It allows business people and potential investors the opportunity to be first in the market if there are new opportunities,” says Wareley. The government is also allowing foreign nationals to partner with an Angolan national to set up a business, without having to invest at least $500,000. According to the World Bank the oil sector accounts for one-third of Angola’s GDP and more than 90% of exports. Given the importance of the sector the government has adopted a more lenient approach towards short-term visas. The validity of these “emergency visas” has been extended from seven days with an additional seven days to a total of 20 days (initial 10 days with an additional 10 days). Companies generally apply for a short-term visa when they have, for example, urgent maintenance requirements on an offshore oil or gas rig which requires the attention of a specialist technician. Companies, who pay a corporate income tax rate of 30%, have been subjected to harsh penalties because they exceeded the number of days allowed under the emergency visa. “The additional days would reduce the possibility of receiving penalties and can lead to major cost savings for companies.” These changes to the visa requirement regime in Angola are important for any investor or company wishing to set up operations in Angola, wanting to invest in the country or increase their business operations in the country. “We hope that streamlining the work permit process will be the next priority to allow for quicker processes times to obtain a work visa,” says Wareley. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Xpatweb: HOLISTIC EXPATRIATE SOLUTIONS The Xpatweb group has been in existence for over 14 years and includes over 90 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents. For more information on Xpatweb please visit: Website: http://www.xpatweb.com/ LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/ Facebook:https://www.facebook.com/xpatweb/  Authored by: Thomas Lobban, Jean Du Toit & Jonty Leon from Tax Consulting SA
This week, on 26 November 2019, the National Assembly passed the latest tax bills, which is set to be promulgated by the President after it has been passed by the National Council of Provinces. On the face of it, some concessions have been made for individual taxpayers, but these offer cold comfort in the bigger scheme. Proposed Amendments Before we get to the truly profound implications, it is important to note the following amendments:
At first glance, it appears that there are no profound amendments to the Income Tax Act or the Tax Administration Act that would raid the pockets of taxpayers, to generate additional revenue. This is peculiar, since the prevailing budget deficit is a massive elephant in a room with grim economic prospects and a junk credit rating. However, taxpayers must not be fooled. In the current economic climate and with SARS so far behind on collection, it is unlikely that the 2019 legislative cycle would not have been put to good use the drum up some more money. Government is smart enough to understand that big changes cause controversy, as we have seen with the VAT rate increase or the amendment to the exemption on foreign employment income. With no such amendments, were taxpayers truly given a tax break in light of the current economic landscape? No Change Means More Revenue In truth, the biggest change by far is not a change at all, nor is it actually found in the Income Tax Act or Tax Administration Act. The Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2019 proposes no amendment to the tax brackets which prescribe the rates of tax applicable to individual taxpayers. In a country with a relatively high inflation rate, this is a problem, since the salaries of employees generally increase in line with inflation. Where the tax brackets do not increase correspondingly, this results in so-called “bracket creep”. In real terms, while this means that individuals are technically earning more, they are actually taking home less pay each month as compared to the previous year. In fact, in many cases taxpayers may be pushed into a higher tax bracket. The upshot is the taxpayer’s pay increase is wiped out by additional taxes. It should also be mentioned that this is the second year in a row that the tax brackets have not been increased, which means that taxpayers will need to further reduce their cost of living for another year, in order to make ends meet. While this will not necessarily affect lower income earners, it will certainly have a significant impact on the already overburdened taxpayers in the middle- and higher-income brackets. This also affects those who will be withdrawing lump sum benefits from their pension interest. In this case, the special tax rates applicable to these amounts also remain unchanged. This means that these persons will be forced to enter into retirement with less cash available to defray their cost of living – an unfortunate consequence of bracket creep. Say Good-Bye to South Africa’s High Earners The long-term effect of these changes (or lack thereof) can only realistically be determined over time. This is an effective measure to generate revenue over the short term, but the question must be asked; how much financial constraint taxpayers are willing take before it becomes unsustainable and individuals simply decide to leave South Africa? We have already seen a massive jump in South Africans deciding to leave the tax net by formally noting their non-resident status by financially emigrating from South Africa. As it stands, National Treasury is already relying heavily on the higher earning segment of the individual tax base and measures like these forces the hand of taxpayers who are already contemplating their departure. Ultimately, we lose important taxpayers and their descendants to the tax base permanently, which leads to less revenue for government. Cunning as it may be, it would seem that government’s band aid is a temporary fix that will exacerbate a far larger problem. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook: Tax Consulting South Africa  Written by: Jonty Leon, Financial Emigration Legal Manager
SARS Views – Not a Law Unto Itself It is an unfortunate sight when tax advisors from varied backgrounds, but more so those who do not have a legal background, turn a blind eye to South African tax legislation and rather submit to the ever-dominating “views” of SARS. Arguing with such an advisor who uses “SARS said…” or “SARS’ interpretation note…” is like screaming into a black hole. Unlike for practicing attorneys, who are officers of the Court and must serve the Court to come to the correct decision; the tax practitioner plays a different role. SARS’ views are unavoidably one-sided, and the ethically correct space for a tax practitioner to operate is to provide balance to the equation, whilst always ensuring full compliance. Legally Blind Tax Advisors When a tax advisor only makes use of the views, or releases of SARS to determine what is best in one’s situation, which occurs more often than we like to believe; it generally ends with the taxpayer inadvertently and unnecessarily compromising their position, in favour of SARS. A true tax advisor must read the law. If this is not the starting point of their advice, there is already a problem and the advisor sets the client on a trajectory of paying too much tax or selling a tax service which is not really needed. With the correct interpretation of the law, the tax advisor has a chance. Without it, SARS reigns supreme, swinging its sceptre in favour of its own agenda. The issue with a tax advisor taking the words of SARS as gospel, is that SARS is a litigating party to any dispute with a taxpayer. It is therefore inconceivable that SARS’ views on legislation, “must be correct”. SARS has one job, to collect as much revenue from the taxpayer as possible, and not to provide ways for the taxpayer to reduce their liability. For some reason, tax advisors seem to forget this and play straight into the field of SARS’ collection priorities. The Full Might of the Letter of the Law Our Constitutional Court has clearly stated that SARS’ view cannot be relied upon, and specifically refers to SARS’ Interpretation Notes. In the ConCourt case Marshall and Others v Commission for the South Africa Revenue Service, the Court stated: “Why should a unilateral practice of one part of the executive arm of government play a role in the determination of the reasonable meaning to be given to a statutory provision?...In those circumstances it is difficult to see what advantage evidence of the unilateral practice will have for the objective and independent interpretation by the courts of the meaning of legislation, in accordance with constitutionally compliant precepts. It is best avoided.’ (Emphasis added) This Judgment is damning against SARS, and goes on to state, “Deference to an administrative body’s own interpretation of the meaning of a statute which it is responsible for implementing should be avoided, particularly when the administrative body is party to the litigation.” The Legally Literate Tax Advisor With the law in hand, a tax advisor that has been to Tax Court is an invaluable weapon. Having stood toe-to-toe with SARS on many occasions, and having insight into their strengths and weaknesses but more importantly understanding the legal obligations to win a case, becomes the only reliable stronghold to a daunting fight against the great collector, SARS. In terms of section 102 of the Tax Administration Act No. 28 of 2011, the onus of proving, “that an amount, transaction, event or item is exempt or otherwise not taxable”, falls on the taxpayer. Thus, the taxpayer bears the onus of proving that they are “innocent” on a balance of probabilities. Our Court’s in a decision by the Special Court in ITC 43, held that, “in the case of all things being equal we are bound to decide in favour of the Commissioner.” This means that the starting point for any tax planning or compliance advice, including SARS disputes, should be whether the taxpayer has passed the burden of evidential proof. The Law will Seal the Deal It is so important to have a legally literate tax advisor with tax court experience, who is capable and willing to use all available legal weaponry in their arsenal to advance your case. More importantly to ensure that the advice given to you prior to you even needing to step foot in a Court, is holistic and grounded in law, not on SARS’ opportunistic interpretation of the law. The next time you get an audit finding or your tax advisor hammers on “SARS will say this” and “SARS will say that”, be mindful of what the Constitutional Court has said about the views of SARS, that they ‘best be avoided’. A Tax Advisor is there to serve the taxpayer’s interests, not the interests of SARS. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook: Tax Consulting South Africa |
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