Concerning corporate tax, Aretè tax consulting provides a wide range of tax services specifically for corporate taxpayers to assist them in complying with South African tax laws and administration procedures. This includes correspondence with the South African Revenue Services (SARS), registrations, research and opinions, administration and compliance, tax planning and outsourced tax department services.
Registrations
Registering for the different tax types can be a complicated process as each type has its own procedures and systems and is regulated by different sections in the tax acts. It is important for any business owner, director or employer to be fully informed as to when a taxpayer will be liable and/or allowed to register for the different tax types. In some instances, companies will not be liable to register for some of these tax types, but should be aware of the fact that they might become liable in the future. VAT, PAYE and provisional tax are just some of the tax types that are strictly regulated by the Income Tax and VAT Act and will be enforced by SARS. Not complying with these regulations might result in penalties and even criminal charges.
- Whether it is Income Tax, VAT, PAYE or Provisional Tax, we offer our clients the service of these administrative tasks. We also assess and review their current and future positions in order to ensure that they comply and keep complying with these regulations, so that unnecessary risks are eliminated.
Legal research, opinions, advance tax rulings and consultancy on international tax and local transactions
Tax issues are not always black or white. At times, a transaction could be a borderline situation. However, it is critical to ensure you stay on the right side of the law. Often the biggest mistakes made by taxpayers are the lack of tax planning. One cannot change the facts and nature of a transaction after it has been completed. Proper research helps taxpayers to understand the tax liability they face and the time they will become accountable for such liability. It also enables taxpayers to plan and explore possible options or alternatives (refer to tax planning for more information).
We offer our clients research and consultancy services in the following ways:
- Professional opinions
Reading, interpreting, understanding and applying tax legislation to your own specific set of facts are skills, which are developed over years. At times case law and SARS interpretation notes, guides and tax handbooks are required to reach accurate conclusions, and even then, it is not always conclusive. However, our tax specialists are experts in this field and will be able to assist and draft professional opinions to corporate taxpayers, dealing with the most complex transactions and situations. Examples include capital vs revenue transactions, Double tax Agreements, Resident vs Source taxation rights, permanent establishment issues (International transactions), corporate rules, anti-avoidance rules and tax deductions.
- Tax Ruling applications
Sometimes a tax opinion is just not enough certainty, especially when dealing with high risk and/or high value transactions. It would therefore be worthwhile to apply for an advance tax ruling from SARS. This is done through the advanced tax ruling system after which SARS will then issue a taxpayer with a “binding private/class ruling”, meaning that SARS will be bound to the ruling of a specific transaction and enabling taxpayers to plan their transactions with certainty. In order to persuade SARS to issue a favourable ruling requires persuasive writing skills, good interpretation and application of the relevant legislation and case law and specialist knowledge. Our tax team will therefore not only draft applications from scratch, but also will also review and provide assistance and valuable insights in order to increase the probability for a favourable ruling.
Tax administration, compliance and SARS
- Tax return calculations, completion and submissions
While liaising with our accounting division, we will ensure that your tax calculations are correct (complying with the relevant legislation) and accurate. We will review, complete and submit returns such as Income Tax returns (IT14, IT12TR, IE12, IT12S, IT12BU or IT12SE); VAT returns (VAT 201), employee tax returns (EMP201), dividend tax returns (DTR01 and DTR02) or provisional tax returns (IRP6).
- Application and assistance in obtaining tax directives
The purpose of a tax directive is to enable SARS to instruct an employer / fund administrator on how to deduct employees' taxes from certain payments to a taxpayer or to provide a fixed tax rate for individuals who earn commission/independent contract income. Employers and fund administrators can request a tax directive from SARS via the channels provided by SARS. We are able to assist employers with this process.
- SARS assessment/ITA34 review
After filing your income tax return, SARS will issue an assessment (ITA34 - original assessment) which will state your tax liability. It often happens that a taxpayer does not agree with SARS and this could be because of the taxpayer incorrectly completing a tax return, incorrect calculations, or SARS disagreeing with the submitted information. We will review your assessment and assist in making informed decisions on whether or not you should accept the issued assessment, or object to it.
- Objections, appeals, Alternative Dispute Resolutions (ADR) and settlement negotiations
After receiving an assessment from SARS, whether it relates to income tax, VAT, PAYE or any other tax for that matter, and the taxpayer disagrees with the outcome of the assessment, he or she has the right to object. Objections are done in the form of a NOO1 or ADR (Alternative Dispute Resolution) 1. In the HR Computek (Pty) Ltd v SARS (South African Revenue Service) case it was made clear that a taxpayer is restricted to disputing an assessment on the grounds raised by its objection. Therefore it is crucial to draft objections strategically and with due care, considering all the facts. These documents could end up in court as legal documents and should be drafted in such a manner. Our team is more than capable to assist taxpayers in this regard.
If a dispute cannot be resolved by way of objection and appeal (ADR2), an ADR hearing could be the next step. An ADR hearing is essentially a mini trial without the formal procedures of a court, in a last attempt by both SARS and the taxpayer to resolve the dispute before ending up in court. An ADR hearing will normally end up in a settlement, with both parties meeting each other halfway or agreeing that the other was correct. However, it is impossible to negotiate or even to know if you are willing to negotiate if you are not fully aware of the all the options available to you and the technical strength of your argument. While most of us dread the prospect of going to court, it may be worthwhile not to settle on anything less than what you believe to be due. Where you have a strong argument that is strategically well placed, SARS (South Africa Revenue Service) is unlikely to force taxpayers to court. We are able to assist and handle these matters on your behalf.
- SARS audit assistance
A SARS (South African Revenue Service) tax audit is generally aimed at ensuring that you, as a corporate taxpayer, are making the correct adjustments in your tax returns. These may be triggered by various factors that SARS (South African Revenue Service) take into account. Dealing with SARS’ audit questions strategically and accurately will save you as well as SARS valuable time.
Understanding what SARS is trying to establish puts you in a position to respond strategically and accurately to SARS’ questions so as to save both you and SARS valuable time. Allow us to assist you in dealing with SARS audits efficiently and effectively.
- Voluntary disclosures (VDP)
Although SARS does not have the capacity to audit every taxpayer out there, you never know when SARS might choose you. SARS’ current aim and focus is to create a culture of compliance in South Africa. This however, leads to taxpayers deliberately and in certain circumstances negligently or because of lack in knowledge, submitting untrue and incorrect information to SARS.
As part of our risk assessment and consulting services, we would consider advising our clients who find themselves in such a position, to consider making a voluntary disclosure to SARS, as this eliminates the risk of SARS showing up on your doorstep and imposing interest and penalties of up to 200%. This could even result in criminal charges against you which could mean the end of your business.
We facilitate this process and assist with making the correct disclosures, which, if successful, will result in minimal to no penalties, and a tax risk free company.
Tax planning and structuring
Tax planning not only reduces your tax risks, but also puts you in the position to plan and structure future transactions, which could reduce your tax liability. Tax planning is affected by a number of different factors and should consider a business’s financial and other personal needs and requirements. We understand this and by liaising with our accounting division, we are able to streamline business and tax objectives and goals.
- Tax and remunerations services for employers
The concept of remuneration structuring requires diverse criteria. This includes financial, tax and personal requirements and needs. Then there are also the associated risks as to how payments and/or benefits provided to your employees, independent contractors and services providers should be taxed. The structuring of a director’s salary is also a controversial subject and even though tax saving is quite possible, it should be done strategically and with due care to minimise risks. Our services include risk reviews and assessments, as well as assistance in salary structuring for directors and employees. This can also be implemented in our accounting division, which will ensure that this area of your business is running smoothly, and with minimal risks.
- Companies
Company structuring and tax planning could be complex and should account for financial and tax benefits. This does not only require good knowledge of tax and other relevant laws and regulations, but also extensive experience. Our team will not only be able to help you with local company structuring but also possible offshore structuring options.
Outsourced tax department
- Auditors and accountants
Tax is a dynamic environment to work in and requires up to date knowledge of tax laws. Large audit and law firms have the benefit of a dedicated tax department. Aretè tax consulting has a range of tax services, which could assist auditors and accountants in giving up to date advice. We follow a strict policy of having any direct contact with your clients and will sign a disclosure if so required.
- Private companies
Private companies, which fall within the larger scheme of things, often need specialist tax knowledge and services, but cannot justify the salary of a tax specialist as he / she is effectively only required for 5 -10 hours per month. Another option is to approach a big audit firm which will more than likely charge a consulting fee of R 2 500 per hour.
We therefore offer various “retainer” packages for those companies whom might consider having an outsourced tax department. Our experts will be available for prompt and accurate tax advice and answers on tax questions and issues. For more information on fee packages and options, contact us at info@arete-tax.com.