New Notice by National Treasury and SARS Provides Tax Exemption for Bulking Payments to Former Members of Closed Retirement Funds

by
1 min read
tax exemption bulking payments

The National Treasury and the South African Revenue Service (SARS) have recently gazetted a notice that grants a tax exemption for bulking payments made to former members of closed retirement funds. This notice aims to provide consistency in tax treatment, clarity, and certainty for South African taxpayers.

Details of the Notice

The notice was published in the Government Gazette no. 3356 on 3 May 2023 and is based on Paragraph 2D of the Second Schedule to the Income Tax Act. Accordingly, it applies to fund administrators who pay former members of closed retirement funds, provided they meet the specific requirements outlined in the notice.

Benefits for Taxpayers

This tax exemption is a significant development for South African taxpayers as it provides a clear understanding of the tax treatment of bulking payments. The notice also serves as a call to action for those who have previously been non-compliant with tax regulations to rectify the error before the government takes further action.

Explanatory Memorandum

To ensure transparency and understanding of the proposed amendments, taxpayers and stakeholders can access the accompanying Explanatory Memorandum on the National Treasury and SARS websites.

Draft Notice and Public Comments

It is worth noting that the National Treasury and SARS published a draft notice for public comment on 6 March 2023. Taxpayers and stakeholders had 30 days to submit their written words, with the closing date for comments being 6 April 2023.

In summary, the newly gazetted notice by the National Treasury and SARS provides a tax exemption for bulking payments to former members of closed retirement funds. This ensures consistent tax treatment and offers clarity and certainty for South African taxpayers. In addition, the notice serves as a final call to action for those who have previously been non-compliant, effective 3 May 2023. Taxpayers and stakeholders can access the explanatory memorandum on the National Treasury and SARS websites to comprehensively understand the proposed amendments.

Tags:

You might be interested in

View all

Leave a Reply

Your email address will not be published.

south africa power blackouts
Previous Story

South Africa’s Power Blackouts: Renewable Energy as a Solution

south africa president ramaphosa
Next Story

President Ramaphosa Highlights Need for Resilience and Collaboration in Achieving Universal Health Coverage in South Africa

Latest from Blog

racism slavery

A Disturbing Incident: Recollection of Slavery in a High School Incident

Students at a Cape Town high school were involved in a disturbing mock auction that resembled scenes from slavery. The incident, filmed and circulated on social media, triggered investigations by school officials and widespread indignation. A spokesperson for the Western Cape Education Department confirmed that the students’ actions were not in line with the values and principles of the department or the school. The incident highlights the need for ongoing dialogues about racial equality, mutual respect, and education on the lasting effects of historical crimes such as slavery.

ireland vfs global

The Evolving Global Travel Landscape: A New Chapter for South African and Botswana Nationals

South African and Botswana nationals now need to obtain a visa before travelling to Ireland, following the Irish Department of Justice’s appointment of VFS Global as its official partner for travellers from these two countries. The decision was made in response to a surge in International Protection applications from South African and Botswana nationals, and is aimed at aligning Ireland more closely with the Schengen Area. The move is part of a broader trend of countries modifying their immigration policies to balance security considerations, economic requirements, and aspirations to maintain an opendoor policy.

electric fence south africa

“Spearheading Safety: South Africa’s Revised Electric Fence Regulations”

South Africa’s Bureau of Standards has updated regulations for electric fences, with new rules requiring the use of premiumgrade materials, regular inspection schedules and enhanced testing methods after installation. The SANS 10222–3: 2023 Edition 5.1 requirements also include revised standards for warning sign placement and joint installation. Failure to comply with the standards can result in the denial of insurance claims, while consumers can request the Electric Fence System Installer number from installers and report improper conduct to the Department of Labour.

homelessness cape town

The Unfolding Homelessness Crisis in Cape Town’s Central Business District

The homelessness crisis in Cape Town’s CBD is becoming increasingly urgent, with hundreds of homeless individuals facing eviction. The city’s proposed solution, the Safe Spaces Initiative, provides shelter, meals, and vocational training to homeless individuals and is funded by the city. While some support the initiative as a way to preserve the dignity of the destitute, others argue for more comprehensive solutions, such as repurposing vacant buildings for permanent housing and addressing health and employment issues. The decision of how to tackle this issue has farreaching implications, making it a critical moment for the city.

south africa democracy

Examining the Path of Democracy: South Africa’s Transformation Over Thirty Years

Deputy President Shipokosa Paulus Mashatile emphasized the need for scientific and evidencesupported strategies to handle socioeconomic complexities, identified key issues integral to the nation’s developmental dialogue, including countering the impacts of climate change, capitalizing on the advantages of the African Continental Free Trade Area, and supporting peace initiatives on the continent. The conference reflected on the struggles, achievements, and aspirations of a nation striving to uphold principles of justice, equality, and social transformation.