Standing Committee on Finance public hearings on the Draft Taxation Laws Amendment Bill, 2012 (22 August 2012) 1
Standing Committee on Finance public hearings on the Draft Taxation Laws
Amendment Bill, 2012
(22 August 2012)1
We made formal submission of our comments.
We will address only limited sections during this presentation.
2
We are in agreement with the change of the definition of equity
share as we are also of the opinion that the previous definition
was linked to the Companies Act 61 of 1973 and the new
Companies Act 71 of 2008 does not define equity shares.
However the proposed amendment to the definition is now too
limiting as it may lead to unintended consequences in Section 45
where shares are sold as redeemable preference shares that do
specify the redemption period, but has a fixed dividend rate to
their BEE partners. The proposed definition may lead to these
entities regrouping their instruments to fit into this definition.
3
Section 8F(1)(d) - We appreciate the Small
business relief on the hybrid recharacterisation
rules. However the total gross asset value not in
excess of R10million is very low and fail to
recognise different enterprise structures. A
service provider has a different asset structure
and need from that of a retail or manufacturing
enterprise.
4
Section 159 of the draft TLAB to amend section 21 of the
Value-Added Tax Act.
We agree that debit note and credit note should be used to
correct a previously issued tax invoice and the
amendments are necessary. However, the addition of (f)
allowing for when error or omission has occurred in respect
of the particulars required under section 20(4) or (5) to be
contained in a tax invoice is too broad.
5
The debit note or credit note is intended to record the
altering of a supply or consideration related to the supply
(discount, consideration amount, return of goods, and
cancellation of supply). Section 21 should not detract from
the vendor’s requirement to issue a tax invoice as required
in terms of section 20.
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A document issued as a ‘tax invoice’ should have at least a
minimum requirement, and the credit or debit note must refer
to such tax invoice, and as such the original tax invoice as
issued in terms of section 20 should be at least in the currency
of the republic, express “tax invoice” in a prominent place, have
an individual serialized invoice number (important for auditing
and referencing purposes) and the suppliers address and vat
registration number. If these are not present, then the
document issued is merely an ‘invoice’ as defined, and should
not be regarded as a ‘tax invoice’ issued in terms of section 20.
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If the ‘tax invoice’ has not been issued, the provisions of
section 21 cannot apply.
Therefore, we propose that paragraph (f) be limited to read
“an error or omission has occurred in respect if the
particulars required under section 20(4)(c), (4)(e), (4)(f), (4)
(g), (5)(d), or (5)(e) to be contained in a tax invoice,”
8
Thank you
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