On May 6, the Organisation for Economic Cooperation and Development (OECD) announced that bank secrecy for tax purposes was coming to an end as countries and major financial centres commit to the automatic exchange of information between jurisdictions.
According to the OECD, the declaration on automatic exchange of information in tax matters was endorsed during its annual Ministerial Council meeting in Paris, France, by all 34 member countries, along with Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Latvia, Lithuania, Malaysia, Saudi Arabia, Singapore and South Africa.
The declaration commits countries to implement a new single global standard on automatic exchange of information. The standard, which was developed by the OECD and endorsed by G20 Finance Ministers in February 2013, obliges countries and jurisdictions to obtain all financial information from their financial institutions and exchange that information automatically with other jurisdictions on an yearly basis. The OECD has indicated that it will deliver a detailed commentary on the new standard, as well as technical solutions to implement the actual information exchanges, during a meeting of G20 Finance Ministers in September. G20 governments have mandated the OECD- hosted Global Forum on Transparency and Exchange of Information for Tax Purposes to monitor and review implementation of the standard.
More than 60 countries and jurisdictions have now committed to early adoption of the standard, and additional Global Forum members are expected to join this group in the coming months.
Customs Registration
One of the most frequent questions asked is how an entity can register as an importer, exporter and/or manufacturer. On May 12, the South African Revenue Service (Sars) informed that the way an entity can register for tax and customs and update its existing details had changed with effect from that day. Accordingly, Sars will now have a ‘single registration’ of a taxpayer across all the taxes payable and legal entities associated with that taxpayer. One will only have to register once as a new taxpayer and thereafter add only the relevant details when one starts paying taxes like value-added tax (Vat). Sars has indicated that it will now be easier to update existing taxpayer details.
Single registration will be phased in, starting with the single registration of taxpayers and a simplified process to apply for corporate income tax, income tax (including provisional tax), pay-as-you-earn (PAYE), Vat and customs and excise.
What are the benefits of single registration? Taxpayers/registered representatives will now be able to view all tax types registered for in a central place, manage all personal information centrally on eFiling or at a Sars branch, register for additional taxes (including CIT, PAYE and Vat, but excluding customs and excise) on eFiling, provided one is already registered for at least one tax on eFiling, and for the first time, taxpayers or legal entities, such as companies and trusts, will be linked to their registered representative on the Sars system.
Customs Refund
On May 16, Sars published the amendment of the rules of the Customs and Excise Act relating to form CR1: ‘General Application for Customs Refund: Voucher of Correction Submission of Documents in Terms of Rule 76.04’.
In accordance with Section 76(4) of the Act (general refunds in respect of imported goods or excisable goods) “no application for a refund or payment in terms of this section will be considered by the commissioner unless it is received by the controller, duly completed and in the form . . . prescribed by rule and supported by the necessary documents and other evidence”.
Fuel Levy Allocations
On May 6, the National Treasury announced the allocations to metropolitan municipalities of general fuel levy revenue for the 2014/15 financial year. The allocations are as follows: Buffalo City metropolitan municipality, R362-million; City of Cape Town metropolitan municipality, R2-billion; City of Johannesburg metropolitan municipality, R2.32-billion; City of Tshwane metropolitan municipality, R1.35-billion; Ekurhuleni metropolitan muni- cipality, R1.47-billion; eThekwini metropolitan municipality, R1.97-billion; Mangaung metropolitan municipality, R257-million; and Nelson Mandela Bay metropolitan municipality, R459-million.
Vat Vendors Registration
On May 16, Sars published draft regulations for the registration as Vat vendors, and comment is due by June 30. According to the briefing note, following the 2013 Budget announcement that Vat registration would be streamlined to ease the compliance burden, while guarding against fraud, certain amendments have been made to voluntary registration for Vat purposes and these include the following: to allow a person to voluntarily register as a vendor where no taxable supplies had been made or the taxable supplies made do not exceed R50 000 and there is a reasonable expectation that the person would make taxable supplies exceeding R50 000 within the following 12-month period from the date of registration, and, in order to register, a person must demonstrate that he or she conducts a continuous and regular activity and that, owing to the nature of the activity, taxable supplies are likely to be made only after a period.
WTO Customs Valuation Meeting
The World Customs Organisation (WCO) technical committee on customs valuation held its thirty-eighth session in Brussels, Belgium, from May 5 to 9. The committee is responsible for the technical interpretation of the World Trade Organisation (WTO) agreement on customs valuation and, in particular, examines technical questions submitted by WTO/ WCO members. The committee examined questions relating to the use of transfer pricing studies when examining related party transactions, distribution fees and royalties and licence fees. A special theme meeting was also held during the week, focusing on the issue of undervaluation.
Professional Foreign Hunters Vat
On May 5, Sars published a draft interpretation note on the supply of goods and services by professional foreign hunters, which explains the Vat treatment of various supplies to foreign hunters, including hunting services, taxidermy services, the supply of a trophy as well as the subsequent export of the trophy. Comment is due by June 30.