NEWS & INSIGHTS

Personal Service Provider (PSP)

According to the tax act, a personal service provider refers to a company which offers particular services and in actual fact it is the person providing the services who represents the company. The following are the three primary indicators of a PSP:

  1. If the company generates over 80% of its revenue from one client. Positive Test.
  2. If the company doesn’t have at least 3 unconnected/related employees. Positive Test
  3. If the company operates at the clients’s premises, using client’s resources, within the client’s prescribed time-lines (Controled by the client). Postive Test.

Double tax agreement (DTA)

Double tax agreement (DTA) or double tax avoidance agreement (DTAA), is an agreement between two countries to avoid or mitigate double taxation. Such treaties may cover a range of taxes including income taxes, inheritance taxes, value added taxes, or other taxes. As an RSA Tax Resident working out of RSA you need to check the DTA between RSA and the country of residency you’re in.

  • The correct processes and procedures needs to be followed to change Tax Residancy should you move out of RSA, this includes Financial Emmigration.

Financial Reporting and Disclosures: COVID-19

Evaluation of the financial impact and required disclosures

The novel coronavirus (COVID-19) pandemic spreads rapidly across the globe. The virus has taken its toll beyond human life, but also on the economic and business environment and has beyond doubt impacted financial markets, the severity of which is currently unknown. Entities need to pay close thought to the accounting ramifications of this prevailing situation.

Disclosures that needs to be made in the financial statements:

Firstly it is important to bear in mind that there will be an indirect impact on virtually all entities, caused by this pandemic. Although some entities will not be significantly impacted, and some entities may even benefit. Eventually, companies need to put into consideration the financial effect on the company and bring to light the areas of the financial statements that will be impacted to assess the reports needed. As well as the specific financial reporting areas in adherence to IAS 1 ‘Presentation of Financial Statements’ which requires the disclosure of sources of uncertainty in estimation and areas of significant judgment.