Applying for an advanced tax ruling? Make sure it's for 1 of these 4 reasons
So you're currently dealing with a particular transaction or project, but there doesn't seem to be any tax law that deals with it! What now?
No problem! You see, if you happen to find yourself in a situation where you don't really know what the tax implications will be, you can apply to SARS for what we call an advanced tax ruling.
This will help remove all doubt, in that it'll show you how tax will apply to that particular transaction, before it takes place.
But don't get ahead of yourself, because it's not that simple!
There are only certain reasons with which you can apply for an advanced tax ruling.
In this article, we'll show you 4 of them. Let's take a look...
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If you create an employee benefit scheme and it forms part of the employees' gross income, your company will be able to apply for an advanced tax ruling.
If you're a landlord, you may wish to know if the value of any upgrades on a leasehold property, if made by the tenant, will form part of the gross income in your hands.
If there's a newly introduced section to the Income Tax Act,
coming into effect soon, you may request an advanced tax ruling because you're not sure how this new section will affect your future transactions.
You can request an advanced tax ruling if you need to know whether an amount you receive will be revenue or capital when SARS taxes the transaction.
You can only apply for an advanced tax ruling for transactions that'll happen in the future. You can't apply for one on a transaction that's already taken place.
There are absolutely no exceptions to this rule!
So then, those were 4 reasons with which you can apply to SARS for an advanced tax ruling.
But there are other reasons too! To learn what they are, as well as how exactly to go about applying for advanced tax ruling, simply page over to Chapter A 04
in your Practical Tax Loose Leaf Service
handbook, or click here
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