Latest news with #DTA
The South African
2 days ago
- Business
- The South African
SARS makes key changes for non-resident taxpayers
The South African Revenue Service (SARS) has introduced a new interim process to simplify tax return submissions for individuals who are not tax residents of South Africa, but earn South African-sourced income. The move follows growing confusion among non-resident taxpayers over how to correctly complete their returns, with some required sections not automatically activating on the SARS eFiling platform. In response, SARS announced an interim solution via its SARS Online Query System (SOQS), allowing non-residents to request access to the correct tax return format. 'A more permanent solution directly on the tax return through the tax return 'wizard' will be introduced later,' SARS stated. To activate the non-resident section of the tax return: Visit the SARS website and click on the SOQS icon. Navigate to 'Non-Resident Tax Return Type.' Fill in the requested personal details. A One-Time Pin (OTP) will be sent to the contact details on record. Select the 2025 tax year and answer SARS's prompted questions. The return will then be formatted accordingly and accessed through the normal eFiling process. SARS noted that the information will be retained for use in subsequent years unless a taxpayer's residency status or other relevant details change. South Africa operates under a residence-based tax system, meaning: Residents are taxed on their worldwide income are taxed on their Non-residents are taxed only on income sourced from within South Africa 1. Salary income Salaries earned in South Africa by non-residents are subject to normal tax, unless a Double Taxation Agreement (DTA) provides relief. DTA conditions typically exempt tax if the employer is foreign, has no permanent establishment in South Africa, and the individual has not been present in the country for more than 183 days. 2. Pensions and annuities Only amounts related to services rendered within South Africa are taxed. 3. Rental income Non-residents earning rental income from South African properties must pay normal tax on that income. Certain property-related expenses, like repairs and municipal charges, may be deductible. 4. Interest Interest from South African sources is generally exempt from normal tax unless the non-resident was in the country for over 183 days or has a debt tied to a local entity. However, withholding tax of 15% may apply. 5. Dividends Dividends paid by South African companies are subject to a 20% dividend withholding tax, which may be reduced under applicable DTAs. 6. Royalties Royalties are taxed at 15% withholding, but this may be replaced by normal tax if residency thresholds are met. 7. Capital Gains Tax (CGT) Non-residents are only subject to CGT on: Immovable property (homes, land, farms, etc.) Shares or trust interests linked to South African property Assets of a permanent establishment in the country SARS acknowledged the potential for double taxation, where income is taxed in both South Africa and the taxpayer's country of residence. To mitigate this, DTAs are in place with many countries to determine tax jurisdiction and reduce duplication. These agreements can exempt or reduce taxes on salaries, pensions, dividends, interest, and royalties, depending on the circumstances and treaty provisions. SARS Commissioner Edward Kieswetter urged all non-resident taxpayers to ensure their information is up to date on eFiling and to make use of the SOQS until the full functionality is integrated into the main return platform. Further information, including conditions for estate duties and taxes on foreign entertainers and sportspersons, can be found on the SARS official website: Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
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Business Standard
21-07-2025
- Business
- Business Standard
DGFT should rethink provisions for deemed exports from DTA to EoU
Para 7.01(i) of the Foreign Trade Policy (FTP) says 'deemed exports' for this FTP refer to those transactions in which goods supplied do not leave the country Listen to This Article We have a domestic tariff area (DTA) unit and an export-oriented unit (EoU) within the same state under the same goods and services tax identification number (GSTIN). We want to send the goods manufactured in the DTA unit to EoU for use as an input in the goods manufactured by the EoU. Can we get deemed export drawback benefits on such supplies? Para 7.01(i) of the Foreign Trade Policy (FTP) says 'deemed exports' for this FTP refer to those transactions in which goods supplied do not leave the country, and payment for such supplies is received either in Indian rupees
Scoop
16-07-2025
- Business
- Scoop
Updates To Deposit Takers Act Implementation Timeline And Standards
The Reserve Bank of New Zealand - Te Pūtea Matua has today published an updated implementation timeline for incoming changes to the prudential regulatory regime for deposit takers. The Deposit Takers Act 2023 (DTA) modernises the regulatory framework to help ensure the safety and soundness of deposit takers and support a stable financial system that New Zealanders can trust. DTA standards will be issued by 31 May 2027 and come into effect on 1 December 2028. 'The standards bring to life the prudential requirements deposit takers will need to meet to be licensed under the DTA,' Director Prudential Policy Jess Rowe says. Public consultation on the proposed standards took place across 2024 and 2025. 'We're grateful for the insightful feedback received from submitters, and we're now hard at work preparing the exposure drafts of the standards,' Ms Rowe says. Exposure draft consultation will take place in three tranches, starting in October 2025. Licensing of existing deposit takers will occur over an 18-month window, running from 1 June 2027 to 30 November 2028, ahead of the standards coming into effect on 1 December of that year. The change means all banks and non-bank deposit takers will be licensed under a single, coherent regulatory regime. In late 2025, we hope to communicate information about our approach to licensing existing deposit takers under the DTA. Changes to the DTA implementation timeline were necessary to allow time for a review of key capital settings, announced on 31 March 2025. DTA standards were previously planned to come into effect in July 2028. Response to submissions on the non-core standards In 2024, we received 25 submissions to public consultation on DTA non-core standards. In response to feedback, we have made changes to further support a proportionate approach, reduce the impact of compliance on deposit takers, and enhance potential competition in the market. Changes resulting from consultation include removing prescriptive detail and making requirements more flexible in certain areas. Our overall assessment remains that we are striking a good balance between our primary financial stability mandate and our purposes and principles, including proportionality and competition. Terminology explained Core standards These are the standards that we will use as the criteria to determine the eligibility of existing banks and NBDTs for relicensing under the DTA. Non-core standards These are the other standards that all deposit takers will need to comply with when the DTA standards regime starts but will not be used for relicensing existing deposit takers. Deposit takers will need to comply with all standards when they come into force in 2028.
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Business Standard
13-07-2025
- Business
- Business Standard
SEZ amendment Bill may be taken up in monsoon session of Parliament
The Bill will allow 'reverse job work'. This means that SEZ units will be able to do a part of the manufacturing process on its behalf for DTA units Shreya Nandi New Delhi Listen to This Article The Special Economic Zone (SEZ) Amendment Bill — to overhaul the existing two-decade old law — is likely to come up in the monsoon session of Parliament. Prior to this, the commerce department is set to seek approval of the Union Cabinet for the new Bill to modernise India's SEZ framework. The proposed changes in the law have been designed to align with the emerging order of global trade, attract investment and boost local manufacturing, a person aware of the matter said. One of the changes in the existing law aims to allow the sale of products manufactured in SEZs
Express Tribune
12-07-2025
- Business
- Express Tribune
PIA incurs net loss of Rs4.6 billion
Listen to article The finance ministry has disclosed in a report that Pakistan International Airlines (PIA) last year incurred a net loss of Rs4.6 billion and one-off accounting profit of Rs26 billion due to treating past losses as future assets "should not be misinterpreted as a sign of operational profitability". The biannual report on federal state-owned enterprises (SOEs) has again highlighted the inefficiencies of PIA, though it has been freed from legacy debt and liabilities. The Central Monitoring Unit (CMU) of the Ministry of Finance released the report on Friday, which gave an in-depth understanding of the accounts of PIA Corporation Limited (PIACL) after its restructuring in which Rs660 billion worth of debt was taken out of the company books. "Despite the overhaul, PIACL Core still reported a pre-tax loss of Rs4.6 billion for the full year and Rs2.3 billion over six months," said the Ministry of Finance. Three months ago, every high-up from Defence Minister Khawaja Asif to Prime Minister Shehbaz Sharif showed satisfaction with PIA's profit of Rs26 billion without knowing that it was a mere "accounting profit". The finance ministry's report stated that a one-off deferred tax asset (DTA) recognition of approximately Rs30 billion was booked as part of the restructuring. While this resulted in an "accounting profit", it is important to recognise that this is a non-cash adjustment, stated the ministry while correcting the record. The report stated "excluding the DTA, the airline's net loss before tax stands at Rs4.58 billion for 12 months," ending December. This DTA reflects the company's expectation of future taxable profits, which is itself a vote of confidence in the potential recovery path, but it should not be misinterpreted as a sign of operational profitability, said the ministry. "The CMU has, therefore, highlighted this so that future valuations consider these items". Accounting rules permit the DTA recognition where sufficient future taxable profits are probable, enabling to offset the accumulated tax losses. "The deferred tax asset of Rs30 billion represents a future tax shield and should not be considered part of core profitability," said CMU Director General Majid Soofi. But the CMU has plainly said that "the profit figures are essentially impacted by deferred tax reversals, impacting the effective tax rate and earnings quality". The report stated that a significant outcome of the restructuring was the dramatic reduction in long-term financing liabilities, from over Rs295 billion to just Rs13 billion, including lease obligations. Consequently, the finance cost plunged from Rs79 billion to Rs10 billion. The cost of services remains elevated and total operational costs reached Rs106.6 billion. "To mitigate these pressures, PIACL must aggressively pursue fleet modernisation, enter fuel hedging contracts and renegotiate existing supply agreements," the CMU recommended. It added that Rs8.3 billion in administrative cost and another Rs8.2 billion in distribution cost were high. PIACL also incurred exchange losses of Rs2.3 billion, reflecting unhedged exposure to foreign currencies that is a structural vulnerability for any international airline. The finance ministry said that following delisting from the Pakistan Stock Exchange and full government ownership of PIA via Holding Company, PIACL "is now free from short-term market pressures". But it said that a performance-based human resources model must be introduced, along with international productivity benchmarks and merit-based promotions. The ministry stated that PIA and Pakistan Telecommunication Company Limited (PTCL) also posed major risks. PIA's heavy debt despite debt being carved out increases insolvency risks, requiring urgent restructuring and potential strategic partnerships. "Rapid privatisation should be ensured," it said. After the failure of the first attempt, for the second attempt to privatise PIA, the Privatisation Commission has pre-qualified four parties and three of them are cement makers. The finance ministry said that PIA and PTCL face market pressures and operational inefficiencies. Debt restructuring, operational improvements and reduced leverage through asset sales are key measures to regain financial health and reduce their dependence on the government, it recommended. PIA is among the entities that face undue interference. It has also been placed among the entities that have low compliance with the SOEs Act, falling even below 60% threshold. To address these challenges, strategic mandates of SOEs must be clearly recalibrated and aligned with national economic goals and fiscal discipline. Long-term business plans that incorporate measurable stakeholder-aligned objectives must be institutionalised, particularly for high loss-making entities like power distribution companies, Railways, and PIA, stated the report. It added that the restructuring of PIACL marks a turning point in the airline's decades-long struggle with debt and inefficiency. Through the successful implementation of the Scheme of Arrangement (SOA), the airline has shed legacy debt and non-core assets, emerging as a streamlined, aviation-focused entity. This strategic realignment allows the company to shift from financial firefighting to operational revitalisation. The government has parked Rs660 billion worth of PIA debt in a new holding company along with non-core real estate assets, which substantially cleaned up the balance sheet. With this separation, PIACL now operates as a focused airline business, while PIA Holding Company takes on the responsibility of settling historical obligations through budgetary support and asset monetisation. This structure enables clearer financial reporting and makes future privatisation or partnerships more feasible. Post-restructuring, PIACL's total assets are recorded at Rs187 billion after accounting adjustments. The company's current liabilities have declined from Rs482 billion to Rs142 billion and non-current liabilities from Rs366 billion to Rs41 billion. These carve-outs have eliminated the suffocating debt overhang and improved solvency metrics, offering much-needed breathing space for strategic decision-making, according to the report.
