Deloitte School of Tax & Legal

3-Part Webinar Series: A Practical walk-through the Basic Corporate Tax Calculation (Webinar 1 of our Corporate Tax Series of webinars)

This webinar series has been developed to take participants systematically through relevant corporate tax principles that are encountered when preparing a Corporate Tax Calculation.

The aim of this webinar is to give participants a high-level overview of key areas to consider when preparing the calculation.  This webinar stands alone. However, it also forms part of our Corporate Tax series where certain topics are delved into more detail in future webinars (see below for information on the series)

The webinar is structured around the basic framework of the Tax Calculation:

Participants will be able to identify and understand the core principles behind key areas that affect any corporate tax calculation and will be equipped to take a more holistic approach to their work tasks.

• Cost: R1 940.63 (inclusive of VAT) per person
• CPD: 4.5 hours

The webinar will contribute to 4 hours CPD/CPE.

Cost:

R1 725 (inclusive of VAT) / R1 500 (exclusive of VAT) per delegate

A Practical Approach to Accounting for Deferred Tax

IAS 1 Presentation of Financial Statements requires an entity to prepare its financial statements (except for cash flow information) on the accrual basis. This means that the accounting tax charge should reflect the tax consequences of the amounts recognised in the specific financial year, regardless of whether amounts have been included in taxable income or not.

The difference in when amounts are added or deducted for tax or for accounting requires an adjustment - an accounting entry called deferred tax.

Deferred tax calculations are challenging for many and in this webinar series we aim to break it down for you by following a systematic approach. Once comfortable with the basic principles of deferred tax (Part 1), we will discuss some of the more complex areas that need to be considered (Part 2).

During Part 1 of the webinar series will also cover the key processes and controls necessary to produce an accurate and complete tax calculation, and is designed around the key proofs and workings that should be prepared for any tax calculation:

• The tax rate reconciliation – with a focus on permanent differences.
• The deferred tax proof – with a focus on temporary differences and IAS12 principles.
• The fixed asset proof.

Each of these proofs and reconciliations is explained in a practical manner.  For each of the proofs or reconciliations, the theory to key adjustments is explained, but more importantly, participants will work through a number of worked examples which explain the application of the theory.

Cost: R1 610.00 (incl. VAT) per person

CPD/CPE: 4 hours

In this webinar-on-demand we be unpack some pertinent questions, such as:

• Are you realising the available benefits by using your capital assets in the most tax efficient manner and steering clear of the myriad of anti-avoidance measures applicable to capital gains and losses?
• What is the impact of debt relief?
• What are the capital loss restrictions in place?

This webinar is a comprehensive discussion on some of the more complex areas that need to be considered and applied when preparing or reviewing the capital gains or losses in a year of assessment, inclusive of any recent amendments to applicable legislation.

The outline of this webinar is as follows:

1. Limitation of Losses

You have calculated a capital loss on a transaction, but are you aware of all of the sections and paragraphs in the Income Tax Act which impact on how you have calculated this loss, and whether you may need to disregard or ring fence this loss?

This session will cover a selection of paragraphs and sections in the Income Tax Act which impact on the amount, and use of, a capital loss which a taxpayer may claim. This will include discussion on:

• par 43A - dividends treated as proceeds
• para 39 and 56 - disposals between connected persons
• par 42 - short term disposals and acquisitions of identical financial instruments
• par 64B - disposal of equity shares in foreign companies
• s45(5) - disposal by transferee company within 18 months after acquiring in an intragroup transaction
• s103(2) - assessed loss anti-avoidance provisions

2. Anti-avoidance Rules

• Par 23: Value-shifting arrangements are directed at a particular type of tax avoidance and are contained in a number of different paragraphs.  This session will provide an understanding of what a value-shifting arrangement is and the CGT impact thereof.
• Par 43: Transactions in Foreign Currency

3. Company Distributions

We will discuss the CGT implications of distributions by companies, including:

• Returns of capital
• Dividend in specie
• Share buy-backs
• Liquidation distributions

4. Rollovers

CGT principles that apply on the disposal or replacement of allowance assets and certain practical implications on disposals will be dealt with.

The webinar will contribute to 2 hours CPD/CPE

Basics of Capital Gains Tax for Corporates

Every business has assets and needs to account for capital gains or losses on the disposal thereof. Although Capital Gains Tax (CGT) has been part of the South African Legislation since 2001, the calculation of CGT can still be challenging to taxpayers.

This webinar aims to improve the understanding of the basic mechanics of capital gains tax, as well as to an awareness of some of the more complex areas that need to be considered and applied when preparing or reviewing capital gains/losses in a year of assessment. 

By the end of this webinar participants will have a understanding of the basic capital gains tax and will be able to answer the following questions:

• When is CGT triggered?
• Where does CGT fit into the corporate tax calculation?
• What is the process to calculate a taxable capital gain or assessed capital loss?
• What are the building blocks of a basic CGT calculation?
• Where do you disclose capital gains items on the ITR14 Tax Return?
• What is the impact of CGT on your provisional tax estimates and payments?

The outline of this webinar is as follows:

Overview of CGT

We will introduce the basic principles of CGT including:

• Who is liable for CGT.
• When is CGT triggered.
• Where CGT fits into the corporate income tax calculation.
• The process of calculating the net capital gain or assessed capital loss.
• Awareness of ring-fencing provisions applicable to capital losses.

Buildings blocks of CGT

In order to calculate a capital gain of loss, four elements have to be determined. The following will be discussed in more detail:

1. Assets
2. Disposals
3. Proceeds (focusing on Para 35 of the Eighth Schedule)
4. Base Costs (focusing on Para 20 of the Eighth Schedule)

Note: The webinar will not cover how to determine the base cost of pre-valuation date assets (i.e. assets acquired before 1 October 2011).

Roll-overs

This session covers the CGT principles that apply on the disposal or replacement of an allowance asset (paras 65 & 66).

Disclosure of CGT in ITR14

Disclosure requirements relating to the disclosure of capital gains / losses, including discussion of the treatment of foreign capital gains / losses will be dealt with.

CGT and provisional tax

Provisional taxpayers are required to make an estimate of their taxable income that will be derived for a year of assessment for the purposes of determining their first and second provisional tax payments. Are you aware of the rules which determine into which of these estimates capital gains needs to be included?

Note: The webinar will not cover the tax treatment of company distributions (i.e. dividends, contributed tax capital or return of capital. This will be covered in a webinar taking place later in the year.