To Host or Not To Host a Year-End Party?

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“If you can laugh together, you can work together” (Robert Orben)

There’s no requirement or obligation for companies to host a year-end party for employees, clients or suppliers. This is true even if there’s a company tradition of an end-of-year bash, or where there may be expectations of a year-end party for clients or suppliers in certain industries.

Read on for the lowdown on the pros, cons and tax implications of hosting a year-end party (or parties).

The benefits of year-end functions

For many, a year-end party is a highlight. A great meal, free drinks and the opportunity to mingle socially with your colleagues. It can even be a motivator when linked to company performance over the year. Here are a few other benefits:

  • By creating shared memories that are talked about throughout the year, these functions can create a sense of belonging.
  • Employees get to know each other better, making connections, building trust and helping to improve communication and collaboration. In the same way, functions for clients and suppliers are a chance to make professional connections and even new friends.
  • A company-sponsored celebration offers a change of scenery, routine and pace that can boost employee productivity when you get back to the office. Among clients, it can increase levels of customer satisfaction and loyalty.
  • A dedicated function makes people feel valued. For employees it can boost morale, build loyalty and reduce turnover, while for clients and suppliers it can create long-lasting relationships and generate qualified referrals.
  • A party is also a great opportunity to share company achievements, like sales figures, special projects completed, or client video testimonials, in the process inspiring staff, clients and suppliers with your company’s vision and offering.
The possible drawbacks of year-end functions

The first step in arranging a corporate event should be setting a budget. Consider the costs – and the potential rewards – carefully. A boring or cookie-cutter party could nullify all the benefits – even if it’s not lavish. That’s why you need to make sure you host a thoughtful event that creates a positive and lasting impression of your company.

There’s also always a risk that staff, suppliers and even clients might conduct themselves inappropriately. This can cause reputational damage and sour working relationships. In extreme circumstances your businesses could even be held legally liable for employee behaviour.

Is it tax deductible?

A company year-end party for staff can be a tax-deductible expense where it’s regarded as a non-taxable occasional meal.

Where clients or suppliers are entertained at a year-end function, expenses such as meals, venue hire and live entertainment can be claimed as a tax deduction, but only if you can prove the expenses were incurred “in pursuit of business”. This means keeping a comprehensive schedule of the entertainment expenses along with the date, the venue, the company and people entertained, and the purposes of that entertainment (for example, prospecting for a new client) to prove to SARS that the expenses were genuinely business-related.

A claim for entertainment expenses is likely to be flagged for investigation by SARS, so don’t risk it unless you have verified your tax position with us and your ability to prove that the expenses claimed are legitimate business expenses.

Remember also that input VAT cannot be claimed on entertainment expenses, including but not limited to business lunches and dinners; annual functions; and expenses incurred for entertaining clients at restaurants, bars and night clubs.

To host or not to host?

If you are considering a year-end event, we invite you to rely on our expertise. While we won’t offer to help with the décor, we can assist you to weigh up the pros and cons for your specific business. We can help you to determine a budget and take care of all the tax stuff, so you can enjoy all the benefits of a corporate function with confidence. Cheers to that!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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Why Aren’t You Hitting Your Revenue Targets? 4 Hard Truths

“The only real mistake is the one from which we learn nothing.” (Henry Ford)

Without revenue targets, businesses are unable to measure their performance against past years, reward employees, or accurately forecast and plan. Targets set by leaders for individuals or teams can shape morale and expectations for employees and bring accountability to team actions.

But it doesn’t always work like this. You might have found yourself in the unenviable position where your targets are consistently being missed – despite your team leaders reporting that their teams are giving it everything they’ve got. Here are four reasons why this may be happening – and what you can do about it.

Reason 1: You set the wrong goals

For many leaders, revenue targets are calculated by simply adding a percentage to the previous year’s turnover to show growth. While this system may seem sensible, it’s actually very wrong.

When setting revenue targets, you must consider a number of factors that go beyond the achievements of the previous year (or quarter), and the current inflationary environment. Consumer behaviours change; sometimes overnight. The market adjusts and new competitors are always springing up. What’s more, a new technology could arise, bringing new challenges or rendering one of your products or services obsolete.

The first step to setting accurate revenue targets is gathering all the data. Once you’ve done a thorough analysis of the market, competition, and consumer behaviour, you should look at each product or service you offer and evaluate its existing sales and potential for new sales. Setting individual targets should result in much more realistic numbers.

Reason 2: Short-term thinking

Pressure to show growth can cause you to rely too much on channels that deliver speedy growth. It’s easy to fall into the trap of doing things for short-term benefit, rather than building your business one brick at a time. Loads of things that are time-consuming and have no obvious short-term gain could eventually reap huge rewards – things like building an organic online presence or nurturing a business community.

The demand for short-term growth can also lead you to abandon strategies that do work simply because they don’t show immediate success. There’s almost always a lag between implementing a new strategy and seeing an impact on your bottom line – often a little patience is all it takes.

Reason 3: Failing to plan

Having a revenue target is not the same as having a plan. At the end of the day, it’s your staff who will convert the proposed numbers into a reality. Your teams must be given the tools they need to meet your revenue targets.

Have your numbers factored in a new competitor? Then your staff need to know how to market around that new competitor, and your sales teams need to know how to answer the questions they’re going to get about the competitor’s products.

If it’s growth you’re after, will your current team be able to handle the extra hours needed to achieve it? Or do you need to add staff? If you need new staff, have you allocated budget for hiring and training them? And have you considered that they’ll operate at a slower pace in the beginning?

Your accountant (that’s us!) can help you gather the necessary data to turn your sales targets into an actionable, budget-friendly plan that makes them a reality.

Reason 4: Bad sales pipeline

You can only sell to customers who actually need your product. You can kiss your revenue targets goodbye if your sales team isn’t getting enough good leads. Without good leads, salespeople start changing their behaviour, wasting time trying to sell to clients they know won’t bite and/or giving deep discounts just to get a hit.

Poor-quality sales pipelines manifest themselves through deals that either don’t close or that take a long time to close. If this is something you’re seeing regularly, here are three questions to ask yourself:

  1. Is your marketing targeting the right demographics?
  2. If you are reaching the right demographics, do you have a large enough budget to reach the number of clients you need?
  3. Are your leads being assessed for quality, and if so, are the sales reps getting the highest quality leads first?

Remember, revenue targets are most often reached by those companies that have gathered accurate data and planned effectively to reach those goals. Your accountant should be on speed dial when you’re putting together revenue targets (and coming up with plans to make them work).

We’d love to chat about your revenue targets – just give us a ring. 

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

© CA(SA)DotNews

Can You Afford to Work Overseas? How Double Taxation Agreements Work

“The hardest thing in the world to understand is the income tax.” (Albert Einstein)

With an increasing amount of business being conducted online, it’s perfectly possible to live in one country and earn an income in another. If you are conducting services for global corporations and earning foreign income in another country, you could get caught up in a world of tricky tax situations. Under these circumstances, you can find yourself being taxed twice, both in the country where the business is conducted and here at home in Mzansi.

To prevent this scenario and encourage South African residents to bring valuable foreign income into the country, the government has enacted Double Taxation Agreements (DTAs) with 79 foreign powers. If applied correctly at tax time, a DTA should mean you don’t pay tax twice. But how does this work, and just where are the pitfalls?

Check your residency status

Many people incorrectly believe that DTAs mean that income earned in a foreign country is taxable in that country. While the exact terms of each DTA are different, most DTAs actually give taxing rights on employment income to the residential country, unless the services are rendered elsewhere. This means that if you live in South Africa, you should pay all of your taxes in South Africa. On this basis, any taxes also paid to the government of the country in which the income was earned might qualify you for tax relief in South Africa.

Surprisingly though, in some cases, and depending on the domestic legislation in the particular country, an individual may find themselves tax resident in both South African and the other country, regardless of where you live. This can have enormous implications on your legal obligations and the taxes you end up paying. Luckily, all DTAs cater for such instances, with a set of rules to apply to determine which of the two countries you will ultimately be deemed tax resident in.

That’s why it’s vital to ask your accountant to first examine the laws and determine just where you are officially resident and how the specific DTA applies in your case.

Do you need a tie-breaker?

Some South African residents working in foreign countries should normally be given tax residency certificates by the country where they make their income. But don’t fall into the trap of assuming this means you’re not a South African tax resident. More likely you now have dual residency for tax purposes and will be required to apply a tie-breaker test under the specific terms of the relevant DTA to determine just where and how you need to pay taxes.

For something that was supposed to make things simpler and decrease the tax burden on residents earning money overseas, DTAs can actually be somewhat onerous.

Does the DTA even apply?

The fact that there’s a DTA between South Africa and the country of your income may fool you into thinking you’re automatically exempt from paying taxes in one of the two countries, but this is not so. DTA relief is something that must be proven in South Africa before it can be granted. SARS will want proof of your claims – only once they have satisfied themselves that the income is earned offshore will the DTA exemptions apply.

The bad news is that if you do not have the relevant supporting documentation, SARS may choose to view the omission as a material non-disclosure. The good news is that your accountant can help you assess what documentation you need.

If you’re earning foreign income but living in South Africa, please speak to us. We can help you to avoid paying more tax than necessary. Or, worse still, falling foul of the law.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

© CA(SA)DotNews

Unlock the Benefits of an End-of-Year Company Review

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“In the business world, the rearview mirror is always clearer than the windshield.” (Warren Buffett)

Every business should conduct an extensive review of its business operations at least once a year. Doing a review allows you to track your company’s progress towards achieving its goals, to evaluate current strategies, practices and operations, and to determine what’s working and what isn’t. Think of it like going to the doctor for an annual checkup.

The benefits of a year-end review

A year-end review enables you to evaluate business performance across business functions and to identify trends and issues before these become serious problems.

It requires checking progress on goals, objectives and key performance indicators (KPIs). This will reveal what is already working well (these processes can be enhanced and replicated), as well as what is not working – prompting you to realign the team or change tactics. All of this empowers you to chart a well-informed plan of action for the year ahead.

What should be included in an annual business review?

For a big-picture understanding of your business’ performance across the various business functions over the last year, a multitude of factors should be reviewed. Luckily, we can help with putting everything together.

  • Financial reports, including:
    • Annual financial statements and management accounts
    • Profit and loss (P&L) statement comparing total income to total expenses
    • Cash flow statement to identify cash flow problems and inform budgeting and spending decisions
    • Debtors’ reports enabling proactive management of current and overdue invoices for improved cash flow
    • Budget vs actual spending report to identify areas over or under budget
    • Balance sheet summarising total assets and liabilities, shareholders’ equity, investments and retained earnings
  • Company vision, mission and values
  • Business plan covering:
    • Market conditions, industry changes and competition
    • Client base, changing client needs and client satisfaction
    • Goals, objectives and KPIs (Key Performance Indicators)
    • Current and pipeline projects, new opportunities
  • Human resources, key roles and employee satisfaction
  • Customer acquisition cost and lifetime value
  • Products/services, value proposition, quality, prices and fees
  • Sales, advertising, marketing and branding
  • Costs and expenses, including tax liabilities
  • Internal systems and processes, equipment, and resources
  • Statutory documents, registrations, certifications and contracts
The smartest way to benefit from a year-end review

Collating all this information may seem overwhelming, but with our professional assistance it can be done quickly and efficiently.

Our team will also assist you to understand the numbers and what the data says about your business. This insight will enable you to enhance or duplicate the processes that are already generating good results and to identify the changes necessary to obtain better results in other areas. It’s all about creating a solid plan for the upcoming year, so you can set your business up for greater success in 2025.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

© CA(SA)DotNews

Your Tax Deadlines for December 2024

  • 06 December – Monthly Pay-As-You-Earn (PAYE) submissions and payments
  • 24 December – Value-Added Tax (VAT) manual submissions and payments
  • 30 December – Excise Duty payments
  • 31 December – Corporate Income Tax (CIT) Provisional Tax payments
  • 31 December – End of the 3rd fiscal quarter
  • 31 December – Value-Added Tax (VAT) electronic submissions and payments

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

© CA(SA)DotNews

6 Ways to Make the Most of Your Employees’ Performance Reviews

“Always treat your employees exactly as you want them to treat your best customers.” (Stephen R. Covey, author of ‘7 Habits of Highly Effective People’)

Good business leaders recognise that regular employee performance reviews play a vital role in improving transparency, identifying talent, and enhancing performance – yet often this process is handled in a casual fashion or even not implemented at all. In fact, a recent study revealed that only 13% of employees and managers, and only 6% of CEOs, think their organisation’s performance appraisal system is useful. Even worse, 88% of respondents said their current performance review negatively impacted their opinion of the HR department.

Here are six tips for turning those opinions around and getting maximum value from your performance reviews.

Tip 1: Really listen

During a review it’s vital that the employee feels truly understood. Data shows that leaders who come to reviews with preconceived notions and a list of complaints are more likely to have unhappy teams. A massive 85% of employees would consider quitting if they thought their review to be unfair – and there is no surer way of making someone feel unfairly treated than to brush off their side of the story and make them feel unheard.

Companies should therefore focus on getting their leaders to:

  • actively listen to employees during reviews
  • avoid making assumptions
  • ignore distractions such as phone calls
  • pay attention to verbal and nonverbal cues.
Tip 2: Be transparent

Because performance reviews are often linked to raises and other benefits, it’s extremely important that the employee understands exactly why certain decisions were made. Giving clear, fair, specific and actionable feedback allows the employee to see how they can get a better raise next year and what they need to do to gain a promotion. Vague or unclear feedback only leads to distrust of the system – and of the company’s HR and leadership.

Tip 3: Keep looking forward

While the very name “performance review” suggests a look back over the course of the past year, it’s also the ideal time to project forward into the future. By using the review to set new goals and speak about career progression, your leaders will be able to motivate employees to do well. Knowing that you’re being considered for promotions or that there are rewards at the end of the tunnel is motivational. Little wonder, then, that forward-looking performance reviews have been shown to improve employee productivity by 13%.

Tip 4: Your employee’s opinion matters

A decent performance review is a conversation between employer and employee. It is a chance to listen as well as to speak, and this dynamic should be carried through to the very design of the review. Speak with both managers and employees about the reviews. Ask them what works and what doesn’t and encourage them to suggest things that would make the process more useful. Then actually adjust the review to accommodate these requests where possible. Employees who feel they have power and buy-in over the review process are far less likely to feel hard done by.

Tip 5: Little and often

According to many business experts, traditional annual business reviews are inadequate. Doing them once a year leaves you with too much ground to cover and places undue stress on the employee – who is then less likely to function optimally during the review. In fact, a recent study suggested the pressure can be so bad that 34% of millennials admitted to crying during their performance review.

By having more frequent and casual performance chats, and addressing any issues when they arise, companies can reduce stress and get better results. According to a report by ClearCompany, employees at companies that use continuous feedback systems are 65% more motivated and 66% more productive.

Tip 6: Be prepared

At the end of the day, an employee performance review is about reward and improvement. Before going into a review, it’s important to know exactly what rewards you’re able to offer, and how these can be implemented.

Work with your team to create a system that is not only motivational, but effective. And speak to your accountant (that’s us) about defining what you can put on the table.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© CA(SA)DotNews

What More Can We Do for You This International Accounting Day?

“Accounting is the bridge between financial chaos and structured prosperity.” (Amanda Green)

International Accounting Day is celebrated on November 10 every year. The day is all about acknowledging the role of accountants in supporting businesses and the economy – at local, national and global levels.

Accountants supporting the economy

Accountants are integral to any economy, as they:

  • Enable strong, sustainable, and inclusive global economic growth through quality financial reporting, auditing, and ethical behaviour.
  • A greater number of accountants correlates to better economic performance in each measure reviewed in IFAC research.
  • Accountants who are members of professional accountancy organisations (like SAICA), make an even more meaningful contribution, correlating to even stronger performance on the economic indicators.

Source: The International Federation of Accountants (IFAC)

Accountants supporting businesses

At the risk of tooting our own horns, now seems a good time to remind you of the many ways that we help businesses to not only survive but also thrive. We can do this by:

  • Translating companies’ financial data, so all stakeholders can “understand the numbers”, using accounting, aka the “language of business”.
  • Monitoring, recording and reporting business performance.
  • Keeping track of finances to help you manage cash flow.
  • Enabling accurate budgeting.
  • Ensuring compliance with laws and regulations to help you avoid penalties.
  • Managing payrolls.
  • Optimising your tax affairs.
  • Facilitating informed, data-driven decisions by providing understandable financial reports that help you to:
    • identify the most profitable products or services
    • optimise spending
    • allocate resources to high-growth areas.
  • Enabling accurate forecasting of revenue and expenses, and informed financial planning.
  • Detecting and preventing fraud by identifying red flags and investigating suspicious transactions.
Reap all the benefits available!

This International Accounting Day is a great opportunity to ensure that you and your business are reaping all the benefits of having a professional accountant in your corner.

Simply reach out to us, and we will gladly identify areas where our expertise and experience could add further value to your business…Be it ensuring compliance, optimising tax or enabling strategic planning.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© CA(SA)DotNews

Not Another Lanyard! How To Make the Most of Promotional Gifts

“Many companies have forgotten they sell to actual people. Humans care about the entire experience, not just marketing, sales, or service.” (Dharmesh Shah, CTO and co-founder, HubSpot)

Brand awareness is at the heart of building a successful business. If your target customers, and the public at large don’t know who you are, you might as well close your doors. Promotional gifts have long been a powerful and effective element of successful marketing. But recently companies seem to be forgetting this and instead are offering their customers the cheapest thing they can stick a logo on.

This attitude lowers the effectiveness of the brand campaign, and risks making your promotional gifting a total waste of money. Here are five reasons you should ask your accountant to free up the budget for a proper campaign, rather than handing out something your client is just going to put in the bin.

Build a real connection

By giving your customer a cheap, nearly useless gift you inadvertently send them the signal that they are unimportant to you. A well-thought-out gift that they can actually use does the opposite. This doesn’t mean you need to break the bank (although spending big for high-end clients can be well worth it). Think of items that they may need such as a torch, measuring tape, or small kitchen implement. Another great option is experiential gifting. Depending on the customer, this might be a round of golf at a sought-after course, or a bungee jumping voucher. By giving customers something they might really use (or an experience they will never forget), you make them feel like you value them as more than just a source of income. In a recent report, 58% of respondents said that they kept useful promotional gifts for more than a year, and many of them for a lot longer.

Your customer becomes the advert

If you’re really crafty, you’ll give people something they can actually use outside of their home. By giving folks a gift they’ll go out with, you turn them into a walking billboard for your business. An umbrella, backpack, or warm jacket that is built to last will give you many years of value as your brand will be subtly showcased at events and venues you haven’t even dreamed of.

Love at first sight

Many companies first meet new customers at events or expos. By giving potential customers a gift before they have even bought anything, you stand out from the horde of other companies vying for their business. Once again, you need to make your gift useful – if everyone else is doing pens and lanyards, your bottle opener, snack or kids’ toy can be the difference between blending into the crowd and being remembered when the time comes to make an enquiry.

According to Giftsenda’s Customer Gifting Report for 2024, almost 85% of people who receive a promotional item remember the advertiser, with 82% of recipients saying it gave them a more favourable perception of that brand. What’s more, a whopping 66% are able to clearly recall the name of that brand a year after receiving the gift.

Repeat business

If you have done this correctly over many years, you may find a customer has several of your products circulating in their daily lives – each of those items is a constant reminder of you and the impact you have had. This helps reinforce connections and ensure you are top-of-mind for the next call.

Keep them loyal

Depending on which study you believe, acquiring a new customer is anywhere from five to 25 times more costly than retaining a loyal one. The best promotional gifts are those that help you keep your loyal customers by showing that you truly understand them. The key to giving these is research.

If your research reveals most of your clients are travellers, then offering them protective suitcase covers, or travel pillows may be the way to go. If they’re into gaming, why not offer them a branded carry bag for their laptop or a quality mousepad with a unique design? We humans want to be understood – and if the companies we work with show they know us, we’re much more likely to stick around.

Promotional gifting doesn’t have to be expensive. In fact, one of the attractions is that it can give you a lot of bang for your buck. But don’t get so lost in the price that you forget why you’re doing it in the first place.

If this article has convinced you to up your gifting game, ask your accountant to help you with your budget. This way you can ensure you make an impact instead of throwing money away on yet another lanyard.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© CA(SA)DotNews

Global Corporate Tax Changes: Advice Is More Crucial Than Ever

“Over the next few years, we are also implementing a global minimum corporate tax to limit the negative effects of tax competition.” (Enoch Godongwana, Minister of Finance, Budget 2024)

There have been significant shifts in the corporate income tax landscape in South Africa and globally. Recent trends noted by the OECD and The Tax Foundation include:

  • Statutory corporate income tax rate changes in 13 countries in 2023
  • A reversal of a two-decade downward trend in corporate tax rates
  • An increase in the average global CIT rate from 20% to over 21% in the last year.

Corporate tax rates have declined from the highs of an average 40% in 1980 and 28% in the early 2000s to around 21%. South Africa has also reduced its CIT rate over the years, from 30% in 2000 to 27% in 2022 – but it is still substantially above the international average.

A new global tax treaty

Dubbed “an historic step towards changing the financial landscape”, 110 UN Member States, including South Africa, recently voted in favour of the terms of reference for a new global tax treaty. The UN says that all 193 UN Member States could vote on a finalised UN global tax treaty as early as 2027.

In the meantime, more than 140 countries have already agreed to this global minimum tax, and some have already implemented this tax reform, including South Africa. Finance Minister Enoch Godongwana announced in his 2024 Budget Speech that South Africa will be implementing the global minimum tax with effect from years of assessment commencing on or after 1 January 2024.

Why a minimum global tax?

Multinational companies use tax planning strategies, like moving profits to low-tax jurisdictions, to minimise their tax liabilities. A global minimum tax aims to ensure that these multinationals pay their fair share of taxes, regardless of where they operate.

This limits the race to the bottom of effective corporate tax rates for large multinationals, with countries competing to attract income by offering low tax rates and tax incentives.

On a social responsibility level, it goes without saying that companies should contribute fairly to the financial stability of the countries they operate in.

Who is affected?

A global minimum tax will ensure that any multinational enterprise group with annual revenue exceeding €750 million (+-R15 billion) will be subject to an effective tax rate of at least 15%, regardless of where its headquarters, operations, sales or profits are located.

Implementation in South Africa

Government plans to introduce two measures to effect this change for qualifying multinationals:

  1. The income inclusion rule applies to multinational entities headquartered in South Africa and requires a tax top-up if the effective rate in the jurisdictions the multinational entity operates in is lower than 15%. This tax is payable to SARS as opposed to the relevant jurisdiction.
  2. The domestic minimum top-up tax applies in situations where the multinational entity’s effective tax rate in respect of its South African profits is lower than 15%. In such circumstances, the South African constituent entities of the multinational entity are jointly and severally liable for the top-up tax.
What is the expected impact?

A global minimum tax will ensure that multinational corporations contribute their fair share of taxes in jurisdictions where they operate, curbing tax avoidance and safeguarding countries’ tax bases. It’s expected to generate significant additional tax revenues for many countries, especially those in the Global South.

In South Africa, National Treasury predicts that implementing the global minimum tax will bolster our corporate income tax base by approximately R8 billion in 2026/2027.

Whether a global minimum corporate tax can deter corporate tax avoidance and evasion remains to be seen. Concerns have also been raised about the impact on companies’ competitiveness, likely increased compliance costs, and possible double taxation.

Will it affect SMEs?

In the long run, the changes should benefit smaller local companies. With a broadened tax base, there may be opportunities in South Africa to lower the personal income tax burden on individuals, or to consider more globally competitive corporate tax rates than the current 27%, which is well above the international average.

The change may also create a more certain and predictable global tax environment, which is conducive to long-term planning and investment decisions.

What needs to be done?

Qualifying multinationals should assess their effective tax rates for the income inclusion rule and domestic minimum top‐up tax from 1 January 2024. Their local and global tax planning, and financial structuring, may need to be reviewed and updated.

While this probably doesn’t apply to your business (yet), companies of all sizes should note the significant shifts in international and local tax policy. This makes our up-to-date, expert tax assistance a must-have for every company navigating the changing tax landscape.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© CA(SA)DotNews

Your Tax Deadlines for November 2024

  • 07 November – Monthly PAYE submissions and payments
  • 25 November – Value Added Tax (VAT) manual submissions and payments
  • 28 November – Excise duty payments
  • 29 November – VAT electronic submissions and payments, Corporate Income Tax Provisional Tax payments where applicable.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© CA(SA)DotNews

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