As from this year, any taxpayer whose gross income for the year is below R250,000 need not file a tax return if they meet the following criteria:
This month's Tax Flash emphasises the importance of 'place of effective management' and the importance of Binding Private Ruling 148 for determining 'effectively connected with such permanent establishment', for dividends withholding taxes imposed by a Double Taxation Agreement (DTA).
It is of the utmost importance, when establishing a group structure, to ensure that the 'place of effective management' of the entities is indeed situated in the desired jurisdiction.
SARS' Binding Private Ruling 148 dealt with the appropriate dividends tax rate applicable to a permanent establishment in South Africa of a Japanese company, which was not a resident of South Africa having regard to the application of the South Africa/Japan DTA.
For more information, go to www.sars.gov.za.