The National Budget 2019’s tax administration proposals appear in the National Budget Review of 20 February 2019.
Model mandatory disclosure rules and non-compliance penalties
It has emerged internationally that offshore structures and arrangements are being designed in an attempt to circumvent financial account reporting under the OECD’s Common Reporting Standard. The standard is used for the exchange of information between countries. It is proposed that the OECD’s model mandatory disclosure rules be implemented in South Africa to identify and counter such structures and arrangements, and that similar penalties to those currently in force for non-compliance with the reportable arrangement legislation be imposed for non-compliance with the rules.
Tax compliance certificates
The legislative provisions relating to tax compliance certificates will be updated to include recent system requirements.
Technical corrections
In addition to the amendments described above, the 2019 tax legislation will include various technical corrections, which mainly cover inconsequential items - typing errors, grammar, punctuation, numbering, incorrect cross-references, updating and removing obsolete provisions, removing superfluous text, and incorporating regulations and commonly accepted interpretations into formal law. Technical corrections also include changes to effective dates and the proper coordination of transitional tax changes.
A final set of technical corrections relate to modifications that account for practical implementation of the tax law. Although tax amendments go through an intensive comment and review process, new issues arise once the law is applied (including obvious omissions and ambiguities). These issues typically arise when tax returns are prepared for the first time after the tax legislation is applied. Technical corrections of this nature are limited to recent legislative changes.
Story by: Riaan de Lange