The research and development tax incentive will be extended for 10 years from 1 January 2024. Image: Shutterstock
Taxpayers who work from home are none the wiser about any additional relief, but National Treasury has promised to publish a discussion document on this subject, this year.
The document will outline workplace practices and policies, changes in the current environment, and how different workplaces are affected by home office and travel allowance policies. This is one of several policy documents being promised.
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Treasury previously embarked on a review of all its current business tax incentives, which resulted in many incentives not being extended beyond their sunset dates.
One incentive that has survived is the research and development tax incentive. It will be extended for 10 years from 1 January 2024.
There will be a six-month grace period for projects to commence before the application is submitted, to allow new and smaller applicants to gather information and potentially benefit from the incentive.
National Treasury says in the 2023 Budget Review it will refine the research and development definition to make it simpler to understand and administer.
It will also move the definition from an “end-result” approach (for example, it must be patentable) to address issues that incorporate principles such as “novel, uncertain, systematic and transferable and reproducible”.
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This change recognises that, given the risk and uncertainty involved, applicants will not know how their research and development activities will unfold when applying for the incentive. It also removes a confusing requirement on innovation.
Reform to the retirement system is due to take effect on 1 March 2024. The amendments will enable pre-retirement access to a portion of one’s retirement assets, while preserving the remainder for retirement.
Permissible withdrawals from funds accrued before 1 March 2024 will be taxed according to the lump sum retirement tables. Withdrawals from the ‘savings pot’ before retirement will be taxed at marginal rates. On retirement, any remaining amounts in the savings pot will be taxed according to the retirement lump sum table.
However, four areas still require additional work. These include a proposal for seed capital, legislative mechanisms to include defined benefit funds in an equitable manner, legacy retirement annuity funds, and withdrawals from the retirement portion if one is retrenched and has no alternative source of income.
The first three matters will be clarified in forthcoming draft legislation. The final matter will be reviewed as a second phase of implementation.
Treasury promises that the alcohol review paper will be published soon, and that the tobacco review paper will be published later this year.
Consultations on the excise policy for these products will take place after the release of the discussion papers.
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Although there is little evidence that tax measures designed to change behaviour do in fact show any positive results, government is not scrapping the sugar tax. Fortunately it will not increase it over the next two tax years.
The reason for this decision is to enable stakeholders in the sugar industry to restructure. This follows challenges from greater regional competitive pressures and the effect of recent floods and public violence, particularly in KwaZulu-Natal.
Government will soon publish a discussion paper on the levy for consultation on proposals to extend the levy to pure fruit juices and lower the 4-gram threshold.
The South African Revenue Service (Sars) intends to review the value-added tax (Vat) administrative framework to simplify and modernise the current system. This will be done in consultation with all affected parties.
The objective is to provide “clarity and certainty” through instruments such as advance rulings.
Government also proposes introducing a legislative framework that will allow Sars to conclude bilateral advance pricing agreements.
This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.
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