GoGlobal Properties, a new property fund exported from South Africa is getting ready to operate in Europe.

Real Estate Investment Trust (REIT) regime is set to usher in a new era for the listed property sector by affording certain tax advantages to qualifying entities and providing certainty in respect of the tax treatment of property loan stock companies.

Monday, 18 June 2012 12:50

On auction kickbacks and commissions

According to Wall & Smith, there is no doubt that the alleged payment of incentives to banks and others is only the tip of the iceberg in the investigations on the auction alliance business practices by SARS and the EAAB.

Payment of part of the 10% Auctioneers commission to a seller or buyer and the ramifications of how this payment was treated from a tax and accounting perspective by all of the parties involved is something we assume will also form part of SARS investigations.

It is accepted practice that commission, whether paid by either seller or buyer is part of the sale price and will accordingly attract VAT, transfer duty or be treated in one of the ways outlined below.

If the buyer is refunded part of the auctioneer’s commission initially paid by him it is not income, it is a reduction in the purchase price, lower VAT or transfer duty.

If the seller is paid part of the auctioneer’s commission it is not income, it is an increase in the purchase price, higher VAT or transfer duty.

Whether paid to either the seller or the buyer the auctioneer will treat it as a deduction.

It is also important to note if the seller is a non-resident a portion of the purchase price must be withheld in terms of the Revenue Laws Amendment Act No. 32 of 2004 (not applicable to a purchase price less than R 2 000 000)


 

Source: Wall & Smith

For more information on when VAT or transfer duty are affected see Wall & Smith website

Published in Blog

Murray & Roberts said it is using 'section 45' of the Tax Act to merge with its subsidiary Concor, forming a single company called Murray & Roberts Construction with R6,5bn turnover.

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