Unused STC credits : is AC 501 bullet proof?
Item
-
Title
-
Unused STC credits : is AC 501 bullet proof?
-
Description
-
On 21 February 2007, the Minister of Finance announced that government proposes to phase out secondary Tax on Companies (STC) and to replace it with a new tax on dividends. It is proposed that this process will take place in two phases. The first phase will see a decrease in the rate of STC from 12.5% to 10%, with effect from 1 October 2007, and a redefinition of the base to apply to all distributions. It is proposed that phase two will commence during 2008 and that it will introduce a dividend tax at the shareholder level. The administrative enforcement of this dividend tax will be by way of a withholding tax that the company deducts from the dividend and pay over to SARS on behalf of the shareholders. It is expected that the introduction of the withholding tax should be complete by the end of 2008. The future abolishment of STC will be viewed as a relief to accountants, as the accounting treatment of STC has always been contentious. Generally speaking the accounting for a withholding tax is much easier and internationally more common. Until STC is however abandoned the accounting considerations remain relevant and in order to be in compliance with International Financial Reporting Standards (IFRSs) due consideration should be given to the accounting treatment in terms of these standards.
-
Creator
-
Venter, Elmar Retief
-
Stiglingh, M. (Madeleine)
-
Date
-
2008-05-05T09:21:32Z
-
2008-05-05T09:21:32Z
-
2007-04
-
Type
-
Article
-
Format
-
1247840 bytes
-
application/pdf
-
application/pdf
-
Identifier
-
Venter, E & Stiglingh, M 2007, 'Unused STC credits: is AC 501 bullet proof?', Accountancy SA, pp. 18-21. [http://www.accountancysa.org.za/]
-
0258-7254
-
http://hdl.handle.net/2263/5106
-
Language
-
en
-
Rights
-
South African Institute of Chartered Accountants