Category Archives: Acts

Private bodies PAIA (Promotion of Access to Information Act) manuals required by 31 December 2015

A1The Promotion of Access to Information Act, 2000 require all juristic persons and all businesses, small to large as well as individuals and partnerships carrying on business to compile manuals on how to access their records. These manuals must be submitted to the South African Human Rights Commission (SAHRC) and must be available at the business offices. Material changes in the manuals must also be updated regularly.

The Act specifies what information these manuals must contain and include inter alia:

  • contact details
  • information that the business keeps in compliance with other legislation
  • a description of the subjects on which the private body holds records, and the categories of records held on each subject

Exemption of certain private bodies no longer applicable

The Minister of Justice has exempted certain private bodies in the past from compiling these manuals. However this exemption is no longer applicable. Therefore all businesses should review their submitted PAIA manuals and update where necessary. Private bodies, which were exempted, must now also submit their manuals by 31 December 2015.

We strongly recommend that all entities resubmit their manuals if they submitted the previous manual prior to December 2007, even if there is no changes to the manual.

We can assist you with compiling your manuals. Our fees will be R750 (excl. VAT) per manual where all information is readily available. Should you have more than 2 business/entities for which manuals must be prepared, we will reduce this fee to R500 (excl. VAT) per manual.

This article is a general information sheet and should not be used or relied upon 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 financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Director’s personal financial interests

2If in terms of section 75(5) of the Companies Act a director of a company who has a personal financial interest in respect of a matter to be considered at a meeting of the board, or knows that a related person has a personal financial interest in the matter, the director:

  1. Must disclose the interest and its general nature before the matter is considered at the meeting;
  2. Must disclose to the meeting any material information relating to the matter, and known to the director;
  3. My disclose any observations or pertinent insights relating to the matter if requested to do so by the other directors;
  4. If present at the meeting, must leave the meeting immediately after making any disclosure contemplated in paragraph (b) or (c);
  5. Must not take part in the consideration of the matter, except to the extent contemplated in paragraphs (b) and (c);
  6. While absent from the meeting in terms of this subsection:
    • Is to be regarded as being present at the meeting for the purpose of determining whether sufficient directors are present to constitute the meeting; and
    • Is not to be regarded as being present at the meeting for the purpose of determining;
    • Whether a resolution has sufficient support to be adopted; and
  7. Must not execute any document on behalf of the company in relation to the matter unless specifically requested or directed to do so by the board.

The above does not apply:

  1. To a director of a company
    • In respect of a decision that may generally affect
      1. All of the directors of the company in their capacity as directors; or
      2. A class of persons, despite the fact that the director is one member of that
        class of persons, unless the only members of the class are the director or
        persons related or inter-related to the director; or
    • In respect of a proposal to remove that director from office; or
  2. To a company or its director, if one person:
    • Holds all of the beneficial interests of all of the issued securities of the company; and
    • Is the only director of that company.

If a person is the only director of a company, but does not hold all of the beneficial interests of all of the issued securities of the company, that person may not:

  1. Approve or enter into any agreement in which the person or a related person has a personal financial interest; or
  2. As a director, determine any other matter in which the person or a related person has a personal financial interest, unless the agreement or determination is approved by an ordinary resolution of shareholders after the director has disclosed the nature and extent of that interest to the shareholders.

Source:  Companies  Act 2008

This article is a general information sheet and 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 financial adviser for specific and detailed advice.

Tax Administration Act 2011

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The following are extracts from the SHORT GUIDE TO THE TAX ADMINISTRATION ACT, 2011  regarding records that are to be kept in terms of the Act.

 

Record retention:
The duty to keep records

This Act imposes a duty on a person to retain the records, books of account or documents needed to comply with a tax Act. It is important to note that certain taxpayers, for example employers and vendors, are required to keep additional specific records in terms of the relevant tax Acts.

In what form must records be kept?

Regarding the manner of keeping records, a new requirement is added. This is to ensure the orderly and safe retention of the records and efficient access thereto by SARS, for purposes of an inspection or audit, during the prescribed retention period. To ensure that records are kept in the correct form, provision is made that SARS may inspect the records for this purpose, in addition to an examination, audit or investigation under the Act.

A person obliged to keep records must:

  1. Keep the records in:
    • Their original form;
    • The form generally prescribed by the Commissioner by public notice; or
    • The form authorised by a senior SARS official upon request by a specific taxpayer for the retention of information contained in records or documents by that taxpayer in a different but acceptable form;
  2. In an orderly fashion;
  3. In a safe place; and
  4. Open for inspection, audit or investigation by SARS.

SARS can do an unannounced inspection to ensure that the records that have to be retained are actually retained and a taxpayer has the duty to keep the necessary records open for inspection by SARS in South Africa.

For what period must records be retained for?

The periods for which persons are required to keep records are set out in Table 3.

Table 3: Record retention periods

Person Period
A person who has submitted a return From the date of the submission of the return until the last day of a period of five years
A person who is required to submit a return for the tax period and has not submitted a return Indefinite, until a return is submitted, as from when the period of five years applies
A person who is not required to submit a return but has, during the tax period, received income, has a capital gain or loss or engaged in any other activity that is subject to tax or would be subject to tax but for the application of a threshold or exemption Until the audit is concluded or the applicable five year period, whichever is the latest
A person who has been notified or is aware that the records are subject to an audit or investigation. If required to submit return: Date of submitting returnIf not required to submit return but received income: End of the tax periodIf failed to submit return: End of the tax period
A person who has lodged an objection or appeal against an assessment or decision under this Act. Until the disputed assessment or decision becomes final or the applicable five year period, whichever is the latest

This article is a general information sheet and 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 financial adviser for specific and detailed advice.

Donations

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Whether you are thinking of helping your son financially to enable him to purchase his first property or donating money towards a worthy cause, there are some things to keep in mind.

A donation is defined in the Income Tax Act No. 58 of 1962 as “any gratuitous disposal of property including any gratuitous waiver or renunciation of a right.”  The donor may therefore not receive anything in return from the donee, as this will constitute an exchange agreement.

There are two types of donation, viz. donatio inter vivos (donation between two persons who are both alive) and donatio mortis causa (a donation where the donee will only receive the donation on the death of the donor).The requirements for both an inter vivos and a mortis causa donation are:
  1. The donor must make an offer to donate, which offer must be accepted by the donee;
  2. The donor must have the necessary legal capacity to make the donation and the donee must have the necessary legal capacity to accept the donation;
  3. Anything that a person can trade (in commercio), can be donated;
  4. A donation must be legal and feasible; and
  5. A donation must be identified or identifiable.

Donations can also be withdrawn.  In the case of an inter vivos donation, the donor can at any time before the donee accepts the donation, withdraw such donation.  After acceptance of the donation by the donee, a valid contract has been formed and the donor will only be able to withdraw the donation in the case of gross ingratitude on the part of the donee, e.g. if the donee threatens the donor’s life.  A mortis causa donation can be repealed at any time before the donor’s death, as the donation will only be ratified on the death of the donor.

Finally, and probably of the most importance to some people, is the matter of donations tax payable to the Receiver of Revenue.  Currently donations tax is calculated at 20% of the fair market value of the property donated.

In terms of article 59 of the Income Tax Act, the donor is liable for payment of donations tax within three months after the donation was made.  If the donor fails to pay the tax timeously, the donor and the donee will be jointly and severally liable for the payment thereof.  An individual can make a donation of R100 000 per annum, free of donations tax.

There are also a few exemptions in terms of section 56 of the Income Tax Act, which should be noted. They include the following:

  1. a donation in terms of a duly registered prenuptial or postnuptial contract to the spouse of the donor;
  2. a donation between spouses who are still married to each other;
  3. a donation in the form of donatio mortis causa (this donation occurs in terms of the donor’s will and is therefore not subject to donations tax);
  4. a donation that was cancelled within six months after it was made; and
  5. donations to certain public benefit organisations.

If spouses are married in community of property they should pay attention to section 57A of the Income Tax Act.  If any property, which forms part of the joint estate of both spouses is donated by one of the spouses, such donation shall be deemed to have been made in equal shares by each spouse.  However, if property that has been donated by one of the spouses belongs to only that spouse (the donor), the donation shall be deemed to have been made solely by the spouse who made the donation.

There are several factors to keep in mind when making a donation and it is therefore advisable to consult with an expert to discuss the tax and legal implications before a decision is made.

References:

  1. Income Tax Act Nr. 58 of 1962
  2. Course for Notarial Practice
  3. www.sars.gov.za

This article is a general information sheet and 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 financial adviser for specific and detailed advice.

The obligation to provide access to certain information about your business

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The Promotion of Access to Information Act (PAIA), No 2 of 2000, was enacted in an effort to foster a culture of transparency and accountability in the public and private sector. It gives effect to the constitutional right of access to any information held by the State or any other person and that is required for the exercise or protection of any rights of any person.

This implies that any person whose rights may be affected may request any of the prescribed information as defined in the Act from a public or private body by following the applicable procedures. The public or private body is then legally compelled to provide such information in the prescribed manner.

Section 51 of this Act requires the head of a private body to compile, within six months after the commencement of this section of the Act or within six months after the establishment of the private body, a manual containing certain prescribed information, such as:

  • postal and street address, phone and fax numbers and email address of the private body;
  • the latest notice regarding the categories of records of the private body which are available without a person having to request access in terms of the Act;
  • a description of available records generated by the private body, indicating which records are automatically available and which records are available on request;
  • the request procedure to be followed in terms of the Act, as well as the applicable fees;
  • a statement confirming the head of the public body;
  • other information as prescribed by the Act.

This manual should be updated every time a change in the prescribed information occurs and must be:

  • submitted to the Human Rights Commission;
  • submitted to the controlling body of which the private body is a member (if applicable);
  • published on the private body’s website (if applicable).

A private body is defined as:

  1. a natural person who carries on any trade or business or profession;
  2. a  partnership that carries on any trade or business or profession;
  3. any former or existing juristic person, but excluding a public body.

When a person requests information in terms of this Act, it must be provided if:

  1. the information is requested to exercise or protect a right;
  2. the person follows the correct procedure as prescribed by the Act;
  3. access to that information cannot be denied on any of the grounds of refusal as stated in the Act.

The deadline for the submission and publication of the PAIA Manual for public and private bodies was 31 December 2011. However, for certain private bodies in certain economic sectors, this has been extended until 31 December 2015.  These exceptions are based on:

  • the economic sector in which the private body operates its business;
  • the total number of employees being less than 50;
  • the turnover of the private body being less than a certain amount per economic sector.

This extension does not otherwise impact on the enforcement of this Act, and the rest of the requirements of the Act are currently enforced.

The penalty for non-compliance is two years imprisonment or the possible option of fines.

This article is a general information sheet and 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 financial adviser for specific and detailed advice.