Newsletter 4/2004
19 November 2004

Dear members of the South African Fiscal Association (“SAFA”)

We had a good response from members volunteering their services as speakers. Many thanks to all concerned! Those of you whom we could not accommodate, we hope to do so next time. We are delighted with the calibre of the volunteers and look forward to their presentations.

The Revenue Laws Amendment Bill [split into two Bills] has been tabled before the National Assembly on 9 November 2004 and the National Council of Provinces on 18 November 2004. The Act will only be promulgated once signed by the President sometime in December .

Further to newsletter 03/2004 the details relating to the next seminar in Johannesburg and Cape Town are as follows:

A: Employee share schemes: The presentation will focus mainly on the new section 8C on executive share schemes, but will also deal with the new broad based employee share plan in section 8B. On section 8C: The key features and options that remain in respect of employee incentives in future. The presenters have been invited to discuss a financial model comparing the past (mostly no tax deduction and cash outlay for the employer and beneficial tax position for employee) with possible incentives in future, say cash bonuses (tax deduction and cash outlay for employer and full tax in the hands of the employee). Implications on dilution in shareholder value - past versus future. What the situation is overseas? On section 8B: Various issues will be discussed.

B: New tax rules for hybrid financial instruments: The presenters will consider the following: Key features and implications, a summary of the past and current positions regarding hybrids, post amendments, how one deals with situations where you require a hybrid for bona fide business reasons? What the amendments to debt defeasance schemes say about the tax deductibility of interest in the past?

C: Amendments to STC: There have been amendments to the group relief exemption in section 64B. There are current disputes on the interpretation of this section as it read previously, with specific reference to double tax treaties. The presenters will deal with principles of tax law interpretation regarding this issue. The presenters were also requested to deal with the effective date to claim STC credits on dividends from, for example, designated countries. It appears that the effect of the amendments to section 64B(3) and (3A) is that the cut-off dated for such credits were brought forward from dividends accruing before the last day of any year commencing after 1 June 2004, to dividends accruing before the date of promulgation.

It has been decided not to deal with the matter of advanced tax rulings this time round because the information relating to the cost, how long it will take, which SARS office will be assigned to deal with it, etc is not available yet.

Cost for attending seminars regarding members are as follows

The cost for the seminar is as follows:

Individual members:
no charge

Corporate members:
first four attendees, no charge, thereafter subject to availability of seats.

Students :
no charge, subject to availability of seats

Booking procedure for Members

This remains unchanged, simply e-mail Jolandie James in Cape Town or Lolitha Samlal in Johannesburg as mentioned under the venue details and make your reservation citing your IFA membership number.

BOOKING PROCEDURE AND COST FOR NON-MEMBERS

The cost is R500-00 and registration for non-members will be confirmed once payment has been effected. There will be no refund for any cancellation one week prior to the seminar. Cheques must be deposited and cleared 10 days before the seminar. Alternatively, cash may be tendered and all deposits must be effected to the following account:

Account Name: South African Fiscal Association
Bank: Standard Bank of SA Limited
Branch: Sandton City Branch, Code 018105
Account No. 021545375

Deposit slips with clear details regarding identity must be faxed to:

Johannesburg seminar: Lolitha Samlal : 011 647 5819

Cape Town seminar: Jolandie James : 021 529 3309

We trust that the seminar will be well attended and look forward to seeing you there!

Regards

Charl Du Toit
President / SAFA