Latest news with #taxcompliance
News24
10 hours ago
- Business
- News24
A VAT crash course, courtesy of 9 000 gold coins
A recent Tax Court judgment stands as a cautionary tale, write Megan Langton and Mornay Bornmann. • For more financial news, go to the News24 Business front page. South African Revenue Service (SARS) Commissioner Edward Kieswetter has spelled it out again after the May 2025 Budget Speech: SARS is committed to collecting significantly more tax this year. He warned that SARS will use all legal instruments to address non-compliance. Despite best efforts to educate and forewarn South Africans, there are still taxpayers and their advisors who make very expensive mistakes when challenging SARS. For delinquent taxpayers who take the risk, the reality is that this Commissioner is not making idle threats. The recent Tax Court judgment in Southern Africa versus SARS stands as a cautionary tale. The taxpayer lost its claim for a R26.9 million input VAT refund. This matter relates to 9 000 gold coins, weighing 358 kg and a customs value of R157 million, brought into South Africa. The taxpayer is a clearing agent operating on behalf of a third party (BIV). The judgment reads that both the taxpayer and BIV 'were under the mistaken impression that no importation VAT was payable on the importation of the coins'. The taxpayer did not initially declare VAT on the import of the gold coins, which entered through OR Tambo International Airport from the UK. SARS informed the taxpayer that gold coins are not exempt from VAT and that a Voucher of Correction (VOC) was needed to bring VAT into account. The taxpayer then passed a VOC to declare VAT, which SARS accepted. SARS later deducted R26.9 million in VAT from the taxpayer's deferment account. The matter was further complicated when the gold coins were subsequently exported back to the UK. However, SARS refused to accept a second VOC, intended to retrospectively cancel the original customs declaration on which the VAT was paid. The court was not impressed Failing to convince SARS to issue a refund of the import VAT, the taxpayer took their plethora of arguments to the Tax Court. This included claims that: The taxpayer qualified as a representative taxpayer or responsible third party entitled to the refund under sections 154 and 158 of the Tax Administration Act; No valid importation had occurred because the goods were later exported; and The taxpayer was entitled to an output tax adjustment under section 21 of the VAT Act. The presiding officer was Judge J Bam of the High Court, Gauteng Division. In a well-written judgment, the taxpayer's arguments were squashed, with the Court stating: Through the life of this case, the Commissioner has consistently informed the applicant of its position. The Commissioner cannot be forced to make a refund of VAT contrary to the provisions of the VAT Act. The Judge agreed with SARS's rejection of the refund on the basis that the taxpayer was not the lawful importer. This was because it was BIV, not the taxpayer, who was reflected as the importer according to all supporting documentation, the VAT registration number, and the accompanying import forms. In one of the most damning lines of the judgment, the Court concluded: The appellant has no case against the respondent. It never had. The taxpayer was ordered to pay SARS's legal costs, including the costs of two counsel. Applying for a simple VAT ruling from SARS prior to import would have clarified whether the agent could claim input VAT, and under what circumstances. The taxpayer and BIV could have imported the gold coins with no VAT risk. What is quite striking is not how the case failed, but how easily it could have been avoided. Megan Langton is a tax attorney at Tax Consulting South Africa, and Mornay Bornmann, attorney for cross-border taxation at Tax Consulting South Africa. News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.
Geek Vibes Nation
a day ago
- Business
- Geek Vibes Nation
Digitizing Corporate Tax Strategies For Better Insights
Digital tax boosts compliance and accuracy. Cloud solutions enable real-time tax data access. Seamless integration improves efficiency. Predictive analytics optimize tax strategies. Digital tools cut costs and administrative burdens. Digital tax is key to financial sustainability. If your organization employs an effective corporate tax strategy, you will find it playing a key role in financial planning by advising businesses on the optimization of tax liabilities while complying with the regulations available. Not only does a well-orchestrated approach to taxes enhance cash flow management, but it also reduces audit risks associated with penalties. Conventional tax planning avails itself mostly of manual processes, often causing inefficiencies as well as mistakes. With automated calculations, tax management is transforming due to digitization, where compliance is streamlined, and finances are readily available at the fingertips of the organization for real-time insights. Now, many companies are equipped with a cloud-based platform and automated reporting and can now rely on AI-driven analytics for accuracy and better decision-making. So, this completely frees up the organization from the administrative burden, placing it under what could undoubtedly be described as legislation contrary to time. By embracing digital tax tools, a company can enhance efficiency, maximum accuracy, and compliance. Automation eradicates the manual errors of putting data through integrated systems that produce tax reporting without a hitch, and the insight from AI enhances tax optimization strategy. This article discusses the transformation in ways of corporate tax planning via digitization, the benefits that modern tax solutions provide, and how businesses can adapt to this trail toward better and improved financial management. The Shift Toward Digital Tax Strategy By adopting digital tax solutions, companies are enhancing their compliance and operational efficiency in preparation for a long-term successful sojourn into an ever-complex tax environment. From Manual Tax Processes to Digital Solutions Corporate tax management has traditionally been about manual processes such as spreadsheets, paper-based records, and complex calculations done in-house by a finance team. These were slow and error-prone ways of developing tax solutions, especially for companies working within multiple tax jurisdictions and the ever-changing ratifications of new legislation. Digital tax solutions began with basic accounting software applications, but businesses are now looking for higher-end solutions. The current tax tech includes automation, data analytics, and compliance monitoring to help with tax operations in the style of a modern system. Today, instead of manually tracking deductions, credits, and compliance dates, companies continuously consolidate tax data through digital platforms, such as Word file to PDF converter online, that minimize inaccuracies and reduce administrative inefficiencies. The Cloud in the Tax Sector Cloud tax software hosts a common environment for businesses to run tax compliance more effectively. Unlike on-premise software, cloud-like solutions allow secure and remote access to current tax data, thus allowing inter-group collaboration regardless of the departments and locations involved. This advantage is especially helpful to multinationals that have to comply with multiple tax law regimes concurrently. The automatic update of the software is another significant aspect the cloud-based tax software boasts of. Given the changing nature of tax laws, cloud systems ensure that businesses are always working in line with the latest regulations without any manual intervention. Real-time synchronization of data is also essential in ensuring that finance teams prepare correct tax reports and forecasts, thus minimizing the risk of miscalculations and penalties for non-compliance. Robots/AI in Tax Planning Artificial intelligence has changed the scene of tax management with automation and predictive abilities. AI tax software renders services in transaction categorization, deduction identification of expenses, and tax forecasting based on the past. Reduced human errors and an accelerated pace of processing taxes allow businesses to give more time to strategic financial planning rather than manual computations of taxes. In tax forecasting, AI can examine market trends and internal financial data. Complex machine algorithms simulate several tax situations that help businesses fine-tune their tax strategies even before putting in their filing. An even greater advancement in compliance could be AI-driven risk assessment tools that identify potential discrepancies in taxation before they become very costly errors. Industry reports illustrate how businesses using AI-driven models for financial forecasting have enhanced budget accuracy by as much as 30%. Technological Strips Emerging on the Future Digital Tax Strategy Emerging technologies other than AI and cloud computing that will disrupt tax administration include blockchain and big data analytics. Blockchain creates a record of every transaction carried out, with immutable characteristics that minimize the risk of fraud while increasing transparency concerning tax reporting. Fostering big data analytics grants firms the ability to analyze large financial datasets in real time to support better decision-making abilities and optimize tax strategies. Key Benefits of Digital Tax Management Tax management has transformed from an option into a necessity for enterprises, which means growing efficiency, precision, and compliance. Improved Accuracy and Compliance Tax management, depending heavily on manual data input, has a high chances of mistakes in calculations, deductions, and filings. Digitalized tax solutions automate such processes and guarantee that utmost precision is maintained in tax calculations while reducing any chances of misreporting. Where relevant, automated systems will highlight inconsistencies, check entries, and produce reports with zero errors so that the risks regarding compliance will be quite limited. Tax laws are in constant flux, and that is already a major hurdle to overcome when one is attempting to keep pace with regulatory changes. Digital tax solutions, on the other hand, give real-time updates to tax codes, which ensures that businesses comply without having to manually track the policy changes. The tools provide audit-ready documentation, preventing the onset of penalties due to non-compliance. Data-Driven Insights for Better Decision-Making Tax planning is not just about regulatory compliance; it has also become strategic and relevant for financial performance. Digital tax management solutions are analytics-enabled and keep track of tax liabilities; they seek deductions and maximize tax savings. This will enable companies to assess their tax history and anticipate their tax outflows, resulting in informed financial choices. Tax projections in real-time assist firms in adjusting their financial strategies beforehand. Digital dashboards chart out hyper-detailed tax liabilities, estimated payments, and possibly available deductions for businesses to optimally allocate resources. These insights allow organizations to be proactive in their tax strategies instead of just being pegged on compliance deadlines. Improved Transparency and Audit Readiness Tax management manually introduces chaos yet offers evidence against tax liabilities when traversing the audit path. Digital tax solutions centralize all tax-related data so that when records are called upon, it becomes fast and easy to retrieve them. Tools like I Love PDF 2 further enhance this by enabling seamless document handling and conversion, supporting audit readiness and streamlined compliance workflows. On top of that, digital tax applications provide a clear trail for auditing, documenting each of the transactions and actions undertaken regarding taxation. This level of transparency further enhances the governance of the firm and gives assurances that supporting data for tax filings can be verified, thus minimizing the gray area of disputes with relevant authorities. Seamless Integration with Financial Systems A fragmented or disconnected approach to tax management brings inefficiencies to the reporting of finances. Digital tax solutions allow seamless integration with accounting software and ERP and compliance platforms, so the syncing of data is executed instantaneously, minimizing redundancies and maximizing the accuracy of financial records. They offer businesses a holistic view of their health by consolidating tax data with the rest of financial management. The integration further justifies ensuring that tax planning dovetails with corporation-wide financial strategies, leading to better cash flow and stability in financing. Scalability and Flexibility for Growing Enterprises As a business grows, its tax compliance becomes more multifaceted, working with multiple jurisdictions, tax brackets, and reporting requirements. Digital tax management solutions are purposely designed with scalability for business growth attached so that any new tax regulations, foreign compliance requirements, and sector-specific tax structures should be easy to contend with. Cloud-based tax platforms allow businesses to manage multi-jurisdictional tax obligations with no need for extensive manual intervention. Be it states-side multiple operations or the international push; digital solutions keep the company's board in compliance without increasing administrative burden. Future Trends in Digital Tax Strategy Digital solutions for tax management are being embraced by firms today, and these fast-evolving technologies are defining the future of tax strategy development. With enhanced compliance, efficiency, and improvements in decision-making, tools from blockchain to AI for predictive analytics transform the working world. The Role of Blockchain in Tax Transparency Blockchain technology transforms tax reporting by securing financial transactions in a tamper-proof and transparent way. Governments and businesses can share blockchain technology to produce a real-time tax record with reduced risk of fraud and tax evasion. Smart contracts cloud automation for tax assessments and payments, thereby minimizing human intervention while fostering compliance. Countries currently investigating a blockchain-oriented tax system are Estonia and Sweden, whose intention is to simplify the digital taxation process. AI Predictive Tax Planning Artificial Intelligence (AI) offers an opportunity to revolutionize tax strategies by assessing huge amounts of financial data to estimate tax liability and identify opportunities for tax savings. AI-based tools can perform pattern recognition in expenditures, maximize deductions, and offer timely tax compliance updates. Machine learning models also allow businesses to look ahead and estimate future changes in tax policies so that they can change their financial strategies accordingly. Such an approach lessens reliance on ad-hoc tax planning and enhances fiscal efficiency in the long run. Data-Analyzing Tools for Strategic Tax Decision Taking Advanced data analytical tools assist companies in analyzing tax performance, determining inefficiencies, and optimizing their tax structures. Utilizing big data empowers a company to analyze historical taxation trends, construct a benchmark for its tax strategies, and base its decisions on objective analytical facts. The company can work with predictive analytics to build a picture of its taxes and align the resultant tax planning decision with larger financial objectives. Integration of Digital Tax Strategy and Financial Planning Increased financial health will come from unifying a comprehensive digital tax strategy to align with corporate financial planning. Integrating tax automation into cash flow management, investment decisions, and risk assessments helps businesses channel resources toward optimization. This holistic stance guarantees that tax efficiency works in the service of larger business objectives. Concluding Remarks Digitization of corporate tax strategies redefines financials by pricing accuracy, compliance, and decision-making. Automated technologies, AI-enhanced analytics, and cloud-based solutions can enable companies to streamline tax operations while extracting administrative overheads. Further, emerging technologies in tax transparency and strategic planning include blockchain and predictive analytics. As at any other time, if tax regulations evolve, digital tax solutions must be acquired to help serve the company with compliance challenges, optimize tax liabilities, and harmonize tax management with other financial objectives. Sustainable financial success does not call for optional adoption of any of these advancements; it is their necessity. Caroline is doing her graduation in IT from the University of South California but keens to work as a freelance blogger. She loves to write on the latest information about IoT, technology, and business. She has innovative ideas and shares her experience with her readers.
Zawya
2 days ago
- Business
- Zawya
FTA holds awareness workshop in Dubai on corporate tax rules highlighting penalty waiver for timely registration
Registrants seeking to benefit from the initiative to exempt from late registration fines for corporate tax are required to submit their returns within 7 months of the end of the first tax period Dubai: As part of its continuing campaign to raise awareness of corporate tax among business sectors and taxpayers, the Federal Tax Authority (FTA) held a workshop in Dubai today on 'Rules for Determining Income Subject to Corporate Tax'. This new workshop comes as part of FTA's efforts to inform and educate eligible taxpayers of their obligations and payment procedures, as well as to encourage an environment of voluntarily compliance with the corporate tax law, which came into effect two years ago. The FTA also announced that six more, in-person workshops are planned for the remainder of 2025, as the Authority's nationwide campaign gathers pace and is set to include a large number of events and workshops – via remote videoconferencing or in-person formats – in all seven of emirates that make up the UAE. The FTA further emphasised that the campaign is designed to address various tax topics, so as to disseminate knowledge of relevant legislation, requirements and procedures for a thorough understanding of corporate tax compliance. To date, the campaign has utilised tailored and targeted programmes to meet the needs of each of the key groups concerned. This ensures that taxpayers have straightforward access to all the relevant and necessary information. Additionally, the campaign seeks to support and encourage the business community to implement the corporate tax law efficiently and accurately. Today's workshop, held in Dubai, had a strong turnout and active participation from the attendees with approximately 940 representatives of businesses, several government entities and stakeholders present. As hosts of this in-person event, FTA representatives provided a comprehensive explanation of the general principles of corporate tax and the importance of voluntary compliance with tax legislation. Within the framework of the campaign, started in phases from 2024, the Federal Tax Authority (FTA) has regularly issued advisories to unregistered corporate taxpayers to expedite the submission of their corporate tax registration applications. Most recently, this includes an update to take advantage of the UAE Cabinet Decision to waive the administrative penalties resulting from the late submission of registration applications, within the specified legal period. Using the platform of the workshop, the FTA again took to opportunity to call on corporate taxpayers (or exempt persons required to register) who have registered for tax to benefit from the initiative to submit their tax returns (or annual declarations) within a period not exceeding seven months from the end of the registrant's first tax period. This is the stipulated period in order to qualify for the exemption from the penalty, in accordance with the Cabinet Decision. FTA representatives again clarified that to benefit from the exemption, taxpayers must file the tax return (or annual declaration) within a period not exceeding seven months from the end of the tax period. However, this only applies to the legal or natural person's first tax period (or the exempted person required to register), regardless of whether the due date of the first tax return (or the first annual declaration) is before or after the implementation of the new decision. Today's workshop agenda covered a range of topics including how to determine income subject to corporate tax, as well as considerations that must be undertaken in the determination and calculation of tax due, the accounting standards applied for corporate tax purposes, the financial statements determined in accordance with the accounting standards applied by the taxpayer, and the basis of accounting accrual under which the taxpayer recognises income when it is earned and expenses when they are incurred. Other elements to be taken into account include the definition of financial assets and financial liabilities, the method of accounting for equity as defined in IFRS, the method of accounting in accordance with the accounting standards applied by the taxpayer, and the cost method of accounting. Information was also provided in relation to explaining the Corporate Tax Law and its associated decisions, requirements for compliance with the law, registration procedures through EmaraTax digital tax services platform, the criteria for determining taxable persons, applicable rates and tax periods, and the mechanism for applying the provisions of the Corporate Tax Law. The FTA continues to invite those subject to corporate tax to familiarise themselves with the Corporate Tax Law, executive decisions and guides related to the law through the Authority's website, by following the link: About Federal Tax Authority The Federal Tax Authority was established by Federal Decree-Law No. (13) of 2016 to help diversify the national economy and increase non-oil revenues in the UAE through the management and collection of federal taxes based on international best practices and standards, as well as to provide all means of support to enable taxpayers to comply with the tax laws and procedures. Since its inception in 2017, the FTA has been committed to cooperate with the competent authorities to establish a comprehensive and balanced system to make the UAE one of the first countries in the world to implement a fully electronic tax system that encourages voluntary compliance, with simple procedures based on the highest standards of transparency and accuracy – beginning from registration, to the submission of tax returns, to the payment of due taxes through the Authority's website:
The National
5 days ago
- Business
- The National
Abu Dhabi's ADGM fines 23 entities for breaching financial regulations
Abu Dhabi's financial free zone ADGM has fined 23 entities a total of Dh610,000 ($166,099) for breaching foreign account tax compliance regulations and reporting standards. The entities were fined by the Financial Services Regulatory Authority of the ADGM, which has been cracking down on violations. The breaches included failure to adhere to due diligence procedures and to report information in a complete and accurate manner, an ADGM statement on Monday said. Some failed to submit required annual information returns and collect valid self-certification. 'These enforcement outcomes reflect the FSRA's firm support for the UAE's commitment to financial transparency and alignment with global commitments to information exchange,' said Emmanuel Givanakis, chief executive of the FSRA. 'We are committed to identifying and addressing practices that do not meet our commitment to combat tax evasion through implementing robust and effective regulations in line with leading global standards of compliance and reporting responsibility." The intergovernmental arrangements entered into by the UAE enhance global tax transparency by enabling the automatic exchange of financial account data between jurisdictions, the ADGM said. 'The regulations implement international frameworks that require reporting entities to collect and report information on foreign account holders to help combat international tax evasion,' it added. The ADGM, which opened in 2015, is home to international banks, insurance houses, global asset managers as well as financial technology and cryptocurrency exchanges. It maintains a stringent oversight of companies operating within its jurisdiction and has fined other groups previously for various breaches. In April, ADGM regulators fined virtual asset trading platform Hayvn Group and its related entities a total of $12.45 million for "serious" rules breaches, while also banning its former chief executive from conducting business in the emirate. A fine totalling $8.85 million was levied by the FSRA, while ADGM's Registration Authority (RA) imposed penalties of $3.6 million, the financial free zone said at the time. In addition, Hayvn founder and former chief executive Christopher Flinos was fined $750,000 and barred from conducting financial services business in the ADGM. Last year, the ADGM fined Sarwa Digital Wealth (Capital) $122,500 for breaching rules; Baker Tilly $62,500 for auditing failures; and six financial institutions more than $46,000 for contraventions in reporting. Before then, it also levied a $486,000 penalty on FinTech company Pyppl for breaking anti-money laundering rules and hit KPMG Lower Gulf with a $30,000 fine for breaching auditing regulations.
The National
5 days ago
- Business
- The National
ADGM fines 23 entities for breaching financial regulations
Abu Dhabi's financial free zone ADGM has fined 23 entities a total of Dh610,000 ($166,099) for breaching foreign account tax compliance regulations and reporting standards. The entities were fined by the Financial Services Regulatory Authority of the ADGM, which has been cracking down on violations. The breaches included failure to adhere to due diligence procedures and to report information in a complete and accurate manner, an ADGM statement on Monday said. Some failed to submit required annual information returns and collect valid self-certification. 'These enforcement outcomes reflect the FSRA's firm support for the UAE's commitment to financial transparency and alignment with global commitments to information exchange,' said Emmanuel Givanakis, chief executive of the FSRA. 'We are committed to identifying and addressing practices that do not meet our commitment to combat tax evasion through implementing robust and effective regulations in line with leading global standards of compliance and reporting responsibility." The intergovernmental arrangements entered into by the UAE enhance global tax transparency by enabling the automatic exchange of financial account data between jurisdictions, the ADGM said. 'The regulations implement international frameworks that require reporting entities to collect and report information on foreign account holders to help combat international tax evasion,' it added. The ADGM, which opened in 2015, is home to international banks, insurance houses, global asset managers as well as financial technology and cryptocurrency exchanges. It maintains a stringent oversight of companies operating within its jurisdiction and has fined other groups previously for various breaches. In April, ADGM regulators fined virtual asset trading platform Hayvn Group and its related entities a total of $12.45 million for "serious" rules breaches, while also banning its former chief executive from conducting business in the emirate. A fine totalling $8.85 million was levied by the FSRA, while ADGM's Registration Authority (RA) imposed penalties of $3.6 million, the financial free zone said at the time. In addition, Hayvn founder and former chief executive Christopher Flinos was fined $750,000 and barred from conducting financial services business in the ADGM. Last year, the ADGM fined Sarwa Digital Wealth (Capital) $122,500 for breaching rules; Baker Tilly $62,500 for auditing failures; and six financial institutions more than $46,000 for contraventions in reporting. Before then, it also levied a $486,000 penalty on FinTech company Pyppl for breaking anti-money laundering rules and hit KPMG Lower Gulf with a $30,000 fine for breaching auditing regulations.
