 By Jonty Leon, Legal manager at Financial Emigration, Tax Consulting SA
With several alarming indicators showing that more South Africans are leaving the country, an increasing number of people have started to research their options on how to move money offshore. Tax Consulting SA has also noted a large increase in individuals who are expatriating funds and investing these funds offshore. There are various speculative reasons as to why people are moving money abroad. Some are financially emigrating due to moving overseas. Other reasons include better investment opportunities abroad, the weakened South African Rand, and political instability. Many of Tax consulting’s clients leaving, or having already left SA, wanting to formalize their non-Residency status, have mentioned discussions regarding land expropriation without compensation has led them to feel that their investments in South Africa are no longer secure. What is exchange control? Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents. Exchange control in South Africa is dealt with in terms of the Currency and Exchanges Act No. 9 of 1933 and Regulations thereof. In my opinion, this law is quite antiquated. Over the past few years and for the foreseeable future, this law will continue to be phased out and simplified, but the process has been slow. The exchange control system regulates the inward and outward flow of money in South Africa and it affects both individuals and companies. At its core, exchange control in South Africa is controlled by the South African Reserve Bank (SARB). The SARB, however, entrusts authorised dealers (banks) to ensure their customers comply with the various regulations that control the sending and receiving funds across South African borders. Jurisdictions that form part of the Common Monetary Area, however, aren’t subject to the same regulations. These countries include South Africa, Lesotho, Namibia and Swaziland. Key considerations when moving money abroad The exchange rate is a major determining factor as to when people take money out of South Africa. People obviously want to take money out of the country when the exchange rate is in their favour, i.e. when the Rand is stronger against currencies such as the Dollar, Euro or Pound. Many times, ill-timed expatriation of funds can mean that a person ‘loses’ much of the value of the funds. Moving money outside of South African when the Rand is weak is like making a bad investment. Be sure to time the expatriation of your money according to the exchange rate. Compliance is another aspect of funds expatriation that needs to be carefully considered and adhered to. Those looking to expatriate funds must ensure they meet all the regulations related to the transaction. Something as seemingly menial as providing an incorrect statement in any declaration to the SARB can lead you to be found guilty of an offence in terms of Regulation 22 of the Exchange Control Regulations, 1961. If you are found guilty of such an offence, you could be fined up to R250,000 or up to five years in prison – or both. Tax Consulting SA also advises clients to find a reputable foreign exchange company when looking to expatriate funds. Many times, large banks do not give consumers the lowest rates, which leads to a major chunk of the funds being absorbed by the bank’s fees. Look for a foreign exchange company that not only offers good rates but will assist you with meeting all the requirements and regulations of the SARB and SARS. How much money can you move abroad? There are two main ways of expatriating funds from South Africa, namely the single discretionary allowance and the foreign capital allowance. The single discretionary allowance is afforded to all South African residents who are 18 years or older and have a valid South African identity document. This allowance is R1-million per calendar year per individual. The foreign capital allowance gives a South African resident individual, 18 years or older, the opportunity to expatriate funds of up to R10-million per calendar year. Prior approval is needed to expatriate funds under the foreign capital allowance. The individual will be required to obtain a Tax Clearance Certificate from SARS before they will be allowed to expatriate money and prior approval is required. If a person wants to move actual South African bank notes abroad, the limit when entering or leaving South Africa is R25 000 per individual. If you are travelling between countries in the Common Monetary Area, however, the amount is unlimited. Those looking to expatriate funds will benefit greatly from speaking to an experienced tax consultant. Make sure you remain within the boundaries of the law, that you plan the fund expatriation according to the exchange rate and that you get a good rate from a foreign exchange company. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za 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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 Authored by: Christopher Renwick, Senior Tax Attorney at Tax Consulting SA
The current problem Provisional taxpayers find themselves on the receiving end of penalties and interest from SARS on a regular basis. While they may attempt to dispute the penalties, they resign themselves to the payment of interest because, as many tax practitioners will tell you, that’s what you have to do. “You cannot successfully challenge SARS on interest”. Typically, a provisional taxpayer (assuming they are aware that they are a provisional taxpayer) fails to file their provisional return in February as required. 4 months down the line and the result is a deemed “zero return”.The implication hereof is that the taxpayer then files an income tax return in tax season and is charged with an underestimation penalty of 20% 20% of the liability is levied as a penalty and, as salt in the wound, 10% interest per annum, calculated pro-rata, is thrown in for good measure.The result of failing to file a return and filing later is 25% additional liability. Confusion If I have confused you, don’t be alarmed. Most provisional taxpayers find themselves equally confused when solving the conundrum that is their tax affairs. Long story short is, that most end up paying more tax than they should. In the form of penalties. However, and this is where things become important, its not the late filing or failure to file that is the problem facing most provisional taxpayers. In fact, it’s solving the problem incorrectly that is causing the real issue. Bluntly, provisional taxpayers are settling their tax debt poorly. Problem solving problematically One method that taxpayers are utilising (whether on the advice of errant tax advisors or not) is to simply file their return and hope they can argue against penalties being imposed. Others attempt a VDP (Voluntary Disclosure Programme). While a VDP has its merits and does prevent criminal sanction, in most cases, the application is inappropriate for solving a provisional tax underestimation. A difference in approach The frustration for me is that these two methods are not, whether individually or collectively, the most appropriate means of resolving a failure in provisional tax compliance. In fact, why pay penalties and interest when you don’t have to. The correct engagement with SARS will ensure tax compliance, without the payment of interest and penalties. Fact. However, if you want to engage with a tax professional to make sure you don’t pay penalties and interest, do it before you file your next return. For best results There exists a mechanism for the successful avoidance of penalties and interest. Yes, it carries with it, its own complexities and administrative difficulties. That’s why it’s best to contact someone who has dealt with it before. Should you choose not to, be prepared to add 25% to your tax bill. Personally, I’m adverse to tipping SARS. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa New Critical Skills Survey - The most in-demand skills in SA may be leaving for greener pastures4/7/2019  According to reports from emigration assistance groups and local banks, South Africa is experiencing a sharp rise in people emigrating.
Pew Research estimates that at least 900,000 people born in South Africa were living in other countries in 2017, with many of these people being skilled and educated. Marisa Jacobs, Immigration Specialist and Director at Xpatweb, the largest independent immigration specialists in South Africa, says the company’s recently released annual Critical Skills Survey not only highlights the top critical skills that employers struggle to recruit within local borders but shows striking similarities between the jobs that are in demand in popular emigration destinations, such as the United Kingdom, New Zealand and Australia. Which skills are the hardest to recruit locally? The latest Critical Skills Survey, which is considered by the government, surveyed 110 companies, including JSE-listed companies and large multinational groups operating in Africa. Following last year’s survey, ICT specialists and engineers remain the most difficult to recruit, followed by artisans, senior financial executives, professionals in the health sector, executive managers, specialists & academics, mining executives, risk managers, and foreign language speakers. “The most notable jump in figures are the number of South African companies struggling to recruit artisans, increasing by 45% from last year and professionals in the health sector which rose by a massive 200%” says Jacobs. Work visa processes to recruit internationally are perceived as onerous Over 85% of respondents indicated that they find it difficult to recruit critically skilled individuals and that an international search would help them find these skills, but that the work visa process was an inhibitor. “Respondents indicated that the work visa process prohibits South African employers from recruiting internationally, citing onerous requirements and long processing times of the South African embassies abroad, as some of the major challenges they face. While this is a clear perception shared by the respondents, our experience has shown that if the person being recruited truly has a critical skill, we have never failed to obtain a work visa,” says Jacobs. Skills leaving South Africa South Africa notoriously doesn’t keep record of the number of South Africans who permanently leave the country, but other countries keep track of immigrants. “Our survey results show that there is a very clear link between the skills that are needed locally and the professions that other countries are recruiting for, again confirming that skills shortages are a global challenge and South Africa is competing for these skills. Skills transfer to local teams and concession planning remains a key element for companies to develop their teams,” concludes Jacobs. Xpatweb will launch the next Critical Skills survey earlier this year in time to provide input for Government’s new critical skills draft list, which is expected to be published later this year for public comment. Visit www.xpatweb.com to access the full survey results. 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 70 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: Marisa Jacobs, Director at Xpatweb
President Cyril Ramaphosa shared an optimistic lookout on the future for the Business and Government sectors within South Africa, at his State of Nation Address (SONA) on 20 June 2019. During the address, President Ramaphosa continuously encouraged Foreign Direct Investment (FDI) confirming that they continue to build a pipeline of investment which will contribute towards economic growth and therefore job creation. FDI = ECONOMIC GROWTH AND JOB CREATION President Ramaphosa indicated that during the last year, R250 billion worth of investment (of the R300 billion in investments announced at the Investment Conference last year) has entered implementation phase. It is evident from the State of Nation Address, that attracting foreign investment to boost economic growth and employment creation remains high priority on the President’s agenda. RECOGNISING CHALLENGES In order to improve the current business climate, our President recognises the challenges faced including the high cost of doing business, high unemployment rate of young South Africans as well as ‘complicated and lengthy regulatory processes.’ Following a recent survey conducted by Xpatweb, many businesses, including large corporates and multinationals, still perceive the visa regime (which forms part of the ‘complicated and lengthy regulatory processes’) as a prohibitor to doing business in South Africa. Businesses continuously seek to attract foreign talent with the required skillset to positively contribute to the organisations and as such to the economy. The regulatory processes however, in their view, serve as an obstacle, despite the direct and indirect impact these critically skilled expatriate talent has on business and the ability to create jobs. OVERCOMING THE CHALLENGES TOGETHER President Ramaphosa assures us the necessary measures are being put in place to improve the ease of doing business, and subsequently lead to an increase in investment. Interim solutions, such as the review of the country’s investment promotion policy and architecture, streamlining of regulatory processes, automating permit and other applications, and further reducing the cost of compliance are some of the measures mentioned during his Address. The above changes will enable a narrowing of the gap between Government and business. We are encouraged by the President’s remarks and retain that we have never failed to successfully obtain a legal work permit for a foreigner who truly has a scarce skill that is needed in South Africa. 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 70 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/  Mariana Stander, Tax and Expatriate Remuneration Specialist at Tax Consulting SA & Grant Wilkinson, a Labour Law expert and Executive at Global Business Solutions
When their market shrinks, especially in a struggling economy, companies must find ways to reduce their operational costs, and retrenchment may become an unavoidable option. It’s an unfortunate but sometimes necessary decision that can traumatise both dismissed employees and remaining staff, leaving psychological scars long afterwards. To protect them from undue distress, the entire process is regulated by specific legal requirements, stipulated in Section 189 of the Labour Relations Act 66 of 1995. Yet many employers fail to satisfy these conditions and find themselves on the losing side of a judgment in Labour Court. To make sure they don’t, they should avoid the following common mistakes. Being ignorant of the law None of the legal requirements for retrenchments can be skipped or reduced, and the onus is on the employer to prove that all the provisions of the Act have been satisfied. It is therefore recommended to seek legal counsel to guide or facilitate the retrenchments, rather than attempt to complete the process yourself. Delaying notification After it becomes apparent that retrenchments could be necessary, employers must, as soon as reasonably possible, serve notice on the affected employees. Section 189, subsection 3, of the Act also clearly describes what information must be included in the notice. No employer is eager to retrench, so they may spend too much time seeking alternatives, hoping to turn the business around. However, the longer they delay, the more pressure they face to complete the process quicker, leading to the next complication. Rushing the consultation process Employers are required to consult with their employees, or their union or employee representatives. This is a serious process through which consensus must be sought on appropriate measures to avoid the dismissals, minimise them, change their timing, mitigate their adverse effects;the method of selecting the employees to be dismissed, and their severance pay. The consultation cannot be rushed or short circuited in any way and the entire retrenchment can take quite long. For large scale retrenchments, at least 60 days are required. So employers should start consultation as soon as possible. Not serving notification correctly Another area of concern is the incorrect serving of notices. Apart from ensuring they contain the right information, employers must serve notices to all employees who may possibly be affected by the retrenchment, whether they will be dismissed or not, and not only those targeted for dismissal. Not keeping the process impartial Employers should never handpick or preconceive who will be dismissed before the consultation. Rather, the appropriate selection criteria must be determined by the employer and then consulted on with the potentially affected parties and should be applied in an unbiased manner, such as last-in-first-out, retention of skills, etc. Not making the consultation inclusive Employers who believe the consultation is just a platform to announce their intention to retrench are gravely mistaken. In the case of NUMSA vs Dorbyl, the Labour Court judge determined that the decision to retrench had been taken at an executive level before consultation began.This rendered the consultation meaningless and the retrenchment invalid. The company was ordered to pay wages to 122 workers over the time that had passed since the dismissal. Organisations must therefore recognise that the process is a two-way street. Having the wrong attitude As the case above illustrates, retrenchment should be seen as a last resort and not an inevitable outcome. Even then, every effort must be made to minimise its impact. Any indication otherwise could render the entire process void and force the organisation to start from scratch, wasting time, money and resources. This requires that employers enter the consultation with an attitude that is open to negotiation, collaborative and ready to embrace alternatives. Not structuring retrenchment packages correctly For those workers who are finally retrenched, the law makes provision for special tax rates that will help preserve the precious funds keeping them afloat until they find a new position. However, certain conditions apply. Unable to spare their jobs, an employer should make every effort to meet all the requirements to ensure these former staff members realise the maximum tax benefits possible. The assistance of a remuneration specialist is advised. Not motivating remaining staff So you’ve ensured your retrenchment policies are robust and compliant, and that your retrenchment packages are structured to offer the greatest value to exiting employees. But what about those staying behind, who feel overwhelmed by what just happened and what the future holds? Research shows that creating a sense of control can quickly restore normal performance. Apart from counseling, initiatives like flexible benefits can do the trick. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za Tax Consulting SA deals with all aspects of South African and international tax compliance and are known for providing market leading remuneration and employee benefit consulting services. Their solutions are built over a robust tax layer, incorporating allowances afforded in tax law, whilst ensuring one remains fully compliant with fiscal law and statutory requirements. Their team consists of over 70 full-time professionals, including tax attorneys, tax professionals, reward specialists, global remuneration professionals (GRP), chartered accountants, professional accountants and psychometrists. Global Business Solutions is a leading Labour Law, Human Resources and Industrial Relations consultancy offering a diverse range of services aimed at empowering businesses to achieve their objectives. They have a wealth of experience and expertise in the fields of business consultancy solutions, project management, B-BBEE, the full spectrum of Human Resources and private and public training (SETA accredited training provider). For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa For more info on Global Business Solutions please visit: Website: https://www.globalbusiness.co.za/ LinkedIn: Global Business Solutions SA Facebook: Global Business Solutions  By Thamasanqa Msiza, senior tax consultant & Darren Britz, Senior Tax Attorney at Tax Consulting SA
The South African Revenue Service (SARS) is acutely aware of the decline in tax moral and tax compliance. Many of the changes to the annual tax Filing Season this year is to lower the cost of compliance for taxpayers, but also to encourage voluntary compliance. High-risk taxpayers, including foreigners working in South Africa, South Africans working abroad; having large capital gains, income from rental properties or from a trust are advised to engage an experienced tax practitioner to assist with filing their returns. SARS has for the first time in several years increased the income threshold for the mandatory submission of income tax returns to R500,000 (previously R350,000) and individuals with simple tax affairs below this new threshold are not obliged to file a return. Simple tax affairs mean the taxpayer only has one employer, does not earn additional rental or interest income, and does not have allowable additional medical aid or retirement annuity deductions. Free capacity The high threshold is aimed at discouraging people who do not pose a risk to the fiscus to visit SARS branches. This frees up capacity to assist taxpayers with more complex affairs who are obliged to file, and to focus on deliberate negligence or even fraud. SARS has been making use of third party data submissions and the annual tax certificates (IRP5s) submitted by employers to prepopulate tax returns. It also has sophisticated risk engines that will be able to detect discrepancies from information received from employers and third party data submissions such as banks and medical aid schemes. Last year two million people were not obliged to file tax returns because they were below the R350,000 threshold, had no additional income or expenses and only had one employer. Yet 1.5 million of them visited the branches to file, hoping for a refund. SARS is this year focused on converting taxpayers to make use of its online channels. It has also adopted a more staggered approach to the start and finish of the tax season. Branch filing season Tax Season only starts on 1 August for taxpayers who have traditionally been filing at SARS branches. The deadline for branch filing is 31 October. SARS has given the assurance that it will not show away traditional branch-filers when they come to their offices in July, but the taxpayers will be encouraged to register as users of the electronic filing system (eFiling) and the MobiApp. The MobiApp has been revamped and will make it easier for people with simple income tax returns to file. Some of the new features include simpler navigation, the introduction of biometric authentication and the scanning and uploading of supporting documents (which has been problematic in the past). SARS will once again make mobile units available in remote areas. It will offer free wi-fi for taxpayers at these units and in the branches to register as online-filers. eFiling season Filing season for taxpayers who have been making use of eFiling will start as usual on 1 July. Non-provisional taxpayers who use eFiling to submit their returns will be able to do so from 1 July and will have time until 4 December. Non-provisional taxpayers are individuals who do not have additional income such as interest and rental income. The filing season for provisional taxpayers – people with multiple employers and different income streams – also starts on 1 July, but they will again have until the end of January 2020 to file their returns. Be ever-ready It is important for taxpayers to ensure that they have all their supporting documents available if they have allowable deductions and that they are able to submit it to SARS when required to do so. It is also important to check with the tax calculation function on SARS e-filing that there are no amounts due. Where there are tax amounts due, interest or penalties will often be charged. Your rights Once you have submitted your return and you receive your assessment you may lodge an objection if you disagree. However, ensure you apply for a suspension of payment, as commencing a dispute with SARS does not stop the obligation to settle the amount SARS considers as due. Also, in following the dispute resolution rules, it is best to ask SARS for reasons for the assessment before simply lodging an objection. In complex disputes it is best to engage a seasoned tax practitioner early on to avoid premature forfeiture of your claim. 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  Authored by: Johnny Kruger, Tax Attorney at Tax Consulting SA
SARS vs Salaries The tough economic playground in South Africa has seen struggling business owners scraping their last pennies together to keep their businesses afloat for a number of years now. Out of sheer desperation and due to stretched cash flow problems, some business owners have been faced with the decision of rather paying their employees’ salaries than paying the tax man his pound of flesh. “Desperate times calls for desperate measures” - a concept not receiving much empathy from SARS’ collection process. The demand for what is due to SARS will often result in closing the doors of the same businesses determined to contribute to the stagnating and struggling economy. With these businesses closing, the economy struggles further. With Kieswetter as the new sheriff in town, one could expect a firm and aggressive stance from SARS in making up the shortfalls under the previous administration. It is only logical that he will target low hanging fruit and corporate income taxes and non-compliant businesses will be at the top of his list. Going into a tax tailspin One such business is that of hip-hop star, Cassper Nyovest, whose company is facing a grave encounter with SARS for owing millions in unpaid corporate income tax. Once in this situation, companies such as Cassper’s will not only be faced with legal action but also have to face the full arsenal of SARS’ collection powers, including having their assets attached and sold under a warrant of execution to cover the amount of tax owed. Kicking the man while he is down so to speak. As tax problems find their way of escalating if not properly dealt with, not much can be done once the SARS collection process has commenced, which often results in the suffocation of businesses. Taking a few steps back Business owners such as Cassper could have prevented their tax affairs from spinning out of control and ending up with SARS having to flex their collection mandate. There is no reason for business owners having endless sleepless nights, stressing about their historic non-compliance, as there are certain measures provided by the same revenue authority to rectify non-compliance before it is too late. What Cassper should have done, is not to sit back and wait for SARS to come knocking, but rather to take proactive steps in rectifying his company’s non-compliance. Prevention is better than cure Some lucky businesses owners that made it through the tough economic times and risen to their feet again are in a fortunate position of settling their tax affairs before experiencing the full might of SARS. This can be done by teaming up with a tax attorney who is well versed with the SARS voluntary disclosure programme (“VDP”). The VDP will ensure rectification of historic non-compliance and business owner that have successfully completed the VDP can benefit for remittance of up to 200% of penalties and full amnesty from criminal prosecution. However, it must be stressed that a VDP application is no simple task and should not be undertaken without the necessary care and skill. What effectively amounts to a mini audit, can result in a door being opened for our new Commissioner if not handled correctly. 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  Authored by: Marisa Jacobs, Director at Xpatweb, Tax Consulting SA
The Department of Home Affairs published the first directive for 2019 explaining the rules of Section 11(2) Visitor Visas with endorsement to conduct work. The sparing nature in which directives are issued further highlights the importance of this directive and the focus of the Department on business travelers and short-term assignees vs long term secondees. Only Issued Once in a Calendar Year The directive clarifies that Section 11(2) visas are not to be used continuously and are specifically to allow for short term project resources in South Africa. The issuing of this directive indicates a common misuse of the visa category by employers where they are making use of the relaxed nature of visa requirements of this category to bring resources into South Africa and then continuously extending or applying for new visas when they should in fact be pursuing a long term work visa. The directive now sets out clearly that the visa may only be applied for once in a calendar year and further only extended once in the Republic for a period not exceeding 3 months. The maximum period thus 6 months. Work Legally in the Short Term There is further a broad misrepresentation by business travellers, especially those travelling from visa exempt countries, who enter South Africa on a holiday/business visa while in fact conducting work in South Africa. When an employee comes to render employment services in South Africa, make sure they get a valid short-term work visa. Do not take a chance and tell the immigration official this is only a business trip, when the purpose is work. It is easy to be compliant and not worth the risk. The process takes 5 – 10 working days and the short-term visa is issued for 3 months and may be extended in South Africa for a further 3 months. Consequences of Working on a Business Visa Where an expatriate is found on your premises conducting work without the necessary authorisation on their visa to conduct such work, the Immigration Act clearly sets out the implications for both the expatriate and the employer. This includes arrest and deportation for the foreign national and a fine and/or arrest for the employer depending on the offence. The issuing of the above directive points to a more vigilant Department with their eye on individuals and businesses who do not comply with the conditions of their visas. This is a good time to ensure all employees are compliant and your organisation is in the green. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za 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 ability for employees and business owners to pre-tax structure their relatives’ school and tertiary education fees remains one of the few available but seldom used tax planning opportunities.
In short, they can sacrifice a portion of their taxable income in exchange for their company’s bursary paying their education costs tax-free, thereby obtaining a tax benefit. How much they save depends on the fee amount, their tax bracket and the number of learners they support. For qualifying employees, their savings range between R3,600 and R23,400 per person per annum. With the allowed limits for employer bursaries having been recently increased, organisations are beginning to see this as a meaningful benefit to attract and retain talent. However, according to Darren Britz, Senior Tax Attorney, and Donne Trump, Bursary Advisor, at Remuneration Consultants (Tax Consulting SA), the arrangement must adhere to the letter of the law or employers could find themselves in hot water with SARS. What is an employee bursary benefit? In terms of the Income Tax Act 58 of 1962 as amended, a bona fide bursary or scholarship granted to an employee’s relatives shall be exempt from tax within certain limits and provided certain conditions are met. The employee must not earn more than R600,000 for the year of assessment, and the portion of the bursary amount exceeding R20,000 for Grade R to 12 or NQF 1 to 4, or exceeding R60,000 for an NQF 5 to 10 qualification, will be subject to taxation. When correctly augmented with the provisions for a salary sacrifice, the clause allows employees to legally reduce their taxable income in exchange for the equal but tax-free bursary benefit. “Employers with tight budgets can increase their employee value proposition (EVP) tenfold, at virtually no cost, just by offering this reward,” says Trump. However, It is important to note that an employer’s payment of the school fees is a fringe benefit, as contemplated in the 7th Schedule of the Act. Therefore, additional requirements need to be met to obtain the exemption, while critical legal and administrative procedures must be followed throughout the life of the incentive for the bursary and resulting tax reduction to be valid. The rise of questionable schemes Any organisation wishing to offer such a benefit must perform the requisite due diligence and thoroughly research the requirements before taking on a partner to set up and administer the bursary. They should also ensure the programme is backed by a legal opinion that expresses its validity. “Companies shouldn’t focus on incentives marketed solely to appeal to employees,” warns Britz. “Rather, they need a system that’s also deeply rooted in law to protect themselves so they can offer a bulletproof case if called to account by SARS.” In contrast, the firm has noted several offerings appearing in the market whose legal grounding would not stand up to close scrutiny by the tax authority. It is concerned that this could rob companies of a much needed means to attract, mobilise and retain vital skills. If enough of those schemes fail, with employers left holding an unwanted tax bill, SARS and businesses alike could tar all such offerings with the same brush. “Yet, this incentive will undoubtedly provide the competitive advantage companies are desperately seeking,” says Miss Trump. “It costs the employer nothing, allows employees to contribute to a need that’s important to them while lowering their tax obligation and, overall, promotes education in South Africa.” She further urges that employers who are interested in this staff incentive should engage a reputable bursary administrator with a strong tax and legal foundation, backed by tax attorneys and chartered accountants, to assure the successful creation and implementation thereof. 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  Authored by: Janine van der Merwe, Reward specialist at Remuneration Consultants, Tax Consulting SA
Hard skills are easy to quantify in the workplace and at home: either you know how to program software, or you don't. Either you understand how to design a stellar spreadsheet, or you don't. With the rise of automation in the 21st century and the 4th Industrial Revolution, however, many jobs that require simple hard skills like data processing or data collection are going to disappear or evolve. That's why it's essential to harness the power of soft skills like leadership, empathy, and creativity. Here are 10 soft skills you will need to survive. 1. Interpersonal skills: empathy When it comes to day-to-day or workplace situations, it's critical to be able to empathize with others to break down boundaries between team members, prevent conflict, and create a more positive work environment where people can flourish. While sympathy involves feeling bad for another person and extending pity, empathy goes deeper. It requires putting yourself "in another's shoes" and feeling their pain, frustration, excitement, or joy. It's a more profound response, connected to impulses in your cerebral cortex, that allows you to identify with another person's situation. 2. Sense of humor In a fascinating Ted Talk, "The Magical Power of Storytelling," David JR Phillips discusses how telling humorous stories at work can help trigger the production of endorphins. This effect occurs not just in yourself, but also in whoever's listening. People whose brains get flooded with endorphins are more relaxed and creative. Having a sense of humor and being able to engage with other team members in a light and easy way is an essential soft skill. It not only helps ease the mood and get endorphins flowing for greater creativity, but it also keeps things in perspective in work and your day-to-day world. 3. Integrity and honesty Integrity will never go out of style. In its purest form, it's about maintaining a set of personal values at all points during your personal and professional life. Though compromising in some matters is essential to collaborative work, there's never a reason to compromise on values like honesty and respect. When it comes to fostering integrity in your interactions, it's helpful to keep those values top-of-mind so that you don't lapse in moments of hardship. 4. Leadership Quote: "The challenge of leadership is to be strong, but not rude; be kind, but not weak; be bold, but not bully; be thoughtful, but not lazy; be humble, but not timid; be proud, but not arrogant; have humor, but without folly." --Jim Rohn. Jim Rohn's wise words break down the critical aspects of leadership, highlighting the importance of balancing values to guide a team or an organization to success. Even outside of managerial roles, it helps to think like a leader; value other people's contributions and exude confidence but be willing to learn from others. 5. Language Though everyone has a conflicting view on globalization, most can agree that the trend is here to stay. Most Millennials already consider themselves "global citizens". A bilingual employee is an asset to the team. Understanding the structure of other languages can also help strengthen communication skills in your native language, and feeds into other soft skills like flexibility, collaboration, and empathy. Emerging language technology has made it incredibly easy to learn a new language. 6. Communication Language fluency is not enough. The ability to communicate effectively is another necessary soft skill. Communication, as a concept, is way more complicated than you might think. A Principles of Management article breaks down 13 distinct types of communication, including nonverbal, written, storytelling, and touch. 7. Collaboration If you were to ask the Millennial generation about the power of collaboration, they would overwhelmingly agree that it is an essential soft skill in the workplace and beyond. As automation begins to take over more solitary, rote tasks like data entry and data processing, you're going to have to embrace the ability to work in teams on higher-level functions that require more collaborative work. 8. Creativity and problem solving Problem solving, and creativity must be discussed as one cohesive soft skill because most issues do necessitate creative solutions that haven't been thought of before. Think of the ever-evolving world of content marketing, for example. Year by year, innovative companies make new strides and set the standard for development. If you want to work on creativity, try the following: • Brainstorming sessions allow you to develop concepts in a judgment-free zone. • Challenge your creative, right-brain activation through drawing or other artistic practices. 9. Time management When it comes to maintaining your position in an increasingly competitive workplace, time management is critical. With automation, faster technology, and greater connectivity in the world, there's indeed no place to hide from poor time-management skills. That is where harnessing the power of technology is going to be an incredible asset. 10. Adaptability and flexibility As we've discussed, automation and the role of Artificial Intelligence will likely continue to increase at a rapid rate. Though this promises exciting innovations and efficiencies in a variety of fields, it's going to create rapid changes. That is where the ability to adapt becomes an incredibly valuable soft skill asset. You can have all the education, training, and potential in the world, but if you cannot rapidly adapt to the changes that are set to occur in the workplace, you will have a difficult time transitioning in the future. The most fascinating and elusive aspect of soft skills is that they work together in perfect harmony. For example, it's difficult to engage in effective collaboration and communication without empathy. Without integrity and established trust, it's hard to be a good leader. And without the ability to adapt to changes in the workforce, you'll never develop your skills efficiently. 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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