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The 2025 tax amendment bills · Tax Break: South African tax for professionals

• 0:11
  Welcome and thank you for joining me for Tax Break.
• 0:13
  This is a podcast about South African tax, 4 South African tax
• 0:17
  professionals and practitioners. My name is Peter Flanagan and in
• 0:21
  each episode I share my thoughts with you on a topic or a recent
• 0:24
  development in South African tax.
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  And I tried to keep the episode short enough that you can listen
• 0:29
  to them whenever you've got a few minutes to spare.
• 0:32
  So before we start the episode, I would like to ask you to
• 0:36
  consider sharing the link to the episode or the podcast with any
• 0:41
  other person that you think would also enjoy listening to
• 0:43
  this podcast. It would help me tremendously if
• 0:47
  you if you can share the link and help me grow the listener
• 0:52
  base in this way, right. So for today's episode, I would
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  like to apologise that the podcast is a bit later than
• 0:59
  usual, but it's all linked to the topic.
• 1:02
  So our topic for today is based on the fact that the the
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  amendment bills were published yesterday on the 12th of
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  November. So maybe just to give a bit of
• 1:13
  context where we are in the process.
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  So you may remember that in August the National Treasury
• 1:19
  published the draft bills for comment.
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  There was a consultation session on these draft bills and
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  yesterday the Taxation Laws Amendment Bill and the Tax
• 1:30
  Administration Laws Amendment Bill.
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  There these two bills were published and in the past they
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  generally became the Amendment acts for the year.
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  I would think it may be slightly different under with the
• 1:45
  government of National Unity, but I would still expect these
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  bills to become the amendment Acts.
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  So what today's episode is all about this to to briefly at the
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  very high level speak about what's in these bills.
• 2:01
  Also, maybe I like what's not in them.
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  And then in the next episode or two, I'm going to go into a bit
• 2:09
  more detail on some of these amendments, right.
• 2:12
  So the First Amendment that we see in the bulls is that the the
• 2:17
  threshold for the ring fencing rule or for, for for losses from
• 2:21
  suspect rights for individuals will be reduced.
• 2:25
  So this rule basically targets losses suffered from activities
• 2:31
  that that may not always really meet the threshold to be a
• 2:34
  trait, the bliss to individuals. And at the moment it only
• 2:40
  applies to individuals who are taxed at the maximum marginal
• 2:44
  rate. That threshold is going to be
• 2:46
  lowered to individuals who are taxed at in the 39% bracket and,
• 2:51
  and upwards. Then the, the second point I
• 2:55
  want to mention is an amendment that's not in the bowl.
• 2:58
  So there was a proposal that certain foreign source pensions
• 3:04
  earned by South African residents should be, should no
• 3:08
  longer be exempt from from income tax.
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  That proposal was not taken forward and it's not included in
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  the bill. So for now the status quo
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  remains. The third one I would like to
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  mention. It also relates to a proposal
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  that was made, but that's not in the bill and that's specifically
• 3:26
  deals with hybrid, hybrid equity instruments.
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  So there was a proposal made to change Section 8 E definition of
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  our hybrid equity instrument and that proposal would have had the
• 3:39
  effect of broadening the scope of the the provision
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  significantly. So that proposal was actually
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  withdrawn even before the consultation session started.
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  So just to confirm that we also we don't see anything of of that
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  in the in the bills. Then the 4th 1 is and the the
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  4th point that I think we need to that I want to highlight is
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  that there is an amendment that will affect capital
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  distributions received from collective investment schemes.
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  So it would make these capital distributions when received by
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  the oldest of the units in the schemes subject to to capital
• 4:21
  gains tax. So that is something that could
• 4:24
  affect investors in collective investment schemes.
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  The fifth one that I think it's probably a correctional
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  clarification is a change to the definition of an equity share
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  that now specifically includes foreign shares as well.
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  And it goes all the way back to one April 20, 2012, the
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  effective date. Then the six point I would like
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  to highlight we find some amendments to the attribution
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  rules in Section 7 as well as to the, the, the trust conduit
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  rules in Section 25-B. And it all still relates to how
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  these rules apply in the context of non residents and, and
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  amounts being attributed or flowing through to, to non
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  residents. The 7th change I would like to
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  highlight relates to any supplies made made by schools.
• 5:20
  So there's an overall blanket exemption for supplies by
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  schools. So in other words, all supplies
• 5:27
  made by schools would be exempt going forward.
• 5:31
  Ohh. The the effect of that is of
• 5:34
  course that if a school made some supplies in the, as taxable
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  supplies before and in good expenditures would have claimed
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  the input tax. That means that there is an
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  output tax charge now on this. So it would have a a real
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  financial effect. So I think this is probably one
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  of the the the amendments I'm going to talk about.
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  Then lastly, the understatement penalty regime, there are a few
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  changes and specifically to the role that bona fide inadvertent
• 6:04
  errors play in this regime, right.
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  So that's at the very high level.
• 6:09
  A quick summary. So to the Taco message is the
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  build site out? Go and have a look at them.
• 6:15
  It, it's, it's very likely that there would be something in
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  there that could affect you or your clients.
• 6:21
  Just as always, if you've got any questions, comments, if you
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  want to suggest which of these amendments do you want to hear a
• 6:29
  bit more about, please send me an e-mail.
• 6:32
  I will. My e-mail address is in the show
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  notes. And then I would like to remind
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  you that nothing in this podcast is meant to be tax advice or a
• 6:42
  replacement for tax advice. Until next week, goodbye.