The concept of reportable arrangements was introduced in 2005 to require early disclosure to the South African Revenue Service (SARS) of certain types of transaction that may give rise to tax avoidance concerns so as to enable SARS to investigate them timeously. Fewer than 150 transactions were reported by 2008, causing significant amendments to the reportable arrangement legislation to ensure a greater response.
The draft Taxation Laws Amendment Bill of 2014, published in July for public comment, contains several proposed changes to the reportable arrangement legislation.
Some of the main proposals are:
These proposed changes come hot on the heels of the release of a draft notice in June, listing various transactions that SARS considers “reportable arrangements”.
The draft list comprises a wide variety of transactions, including certain arrangements which involve payment of service fees to non-residents, share buy-backs, rebates of foreign taxes, contributions to non-resident trusts, payments to foreign insurers and the purchase of companies in assessed loss positions.
Taxpayers that participate in the arrangements which meet the criteria set down in the list will be required to report them to SARS once the list becomes final.
The proposed changes and lists may indicate a new initiative by SARS to render the reportable arrangement provisions more effective.
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