Mandatory firm audit rotation results report update

SAICA released the Mandatory audit firm rotation (MAFR) results report on 27 September 2016. It has come to our attention that there were some inconsistencies between the visuals and the report narrative.

The full results report as well as the executive summary has been amended with revised design elements to achieve visual consistency with the report narrative as well to enhance the readability of the report. The data, results, narrative and conclusions remain exactly the same and are not affected by the visual design amendments.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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How to avoid email phishing

Phishing is a technique used by scammers to steal the personal details of unsuspecting people using email. A lot of phishing emails claim to come from legitimate sources or popular websites. These emails often ask the user to enter bank details or other personal information. Sometimes they will appear to be emails claiming the receiver has won something and that they need to enter their details to claim their prize.

Most of these fake emails redirect users to website pages with spaces where they have to fill in essential financial information usually used to access bank accounts or other personal accounts. Once the scammer gets a hold of the information, they can carry out fraudulent monetary transactions. .

Follow these 10 steps to protect yourself from phishing scams:

1. Learn to Identify Suspected Phishing Emails
There are some qualities that identify an attack through an email, such as:

  • They duplicate the image of a real company.
  • Copy the name of a company or an actual employee of the company.
  • Include sites that are visually similar to a real business.
  • Promote gifts, or the loss of an existing account.

2. Check the Source of Information from Incoming Mail

Your bank will never ask you to send your passwords or personal information by mail. Never respond to these questions, and if you have the slightest doubt, call your bank directly for clarification.

3. Never Go to Your Bank’s Website by Clicking on Links Included in Emails

Always, type in the URL directly into your browser or use bookmarks/favourites if you want to go faster.

4. Enhance the Security of Your Computer

Common sense and good judgement is as vital as keeping your computer protected with a good antivirus to block this type of attack.

5. Enter Your Sensitive Data in Secure Websites Only

In order for a site to be ‘safe’, it must begin with ‘https://’ and your browser should show an icon of a closed lock.

6. Periodically Check Your Accounts

It never hurts to check your bank accounts periodically to be aware of any irregularities in your online transactions.

7. Phishing Doesn’t Only Pertain to Online Banking

Most phishing attacks are against banks, but can also use any popular website to steal personal data such as Facebook, PayPal, etc.

8. Phishing Knows All Languages

Phishing knows no boundaries, and can reach you in any language. In general, they’re poorly written or translated, so this may be another indicator that something is wrong.

9. Have the Slightest Doubt, Do Not Risk It

The best way to prevent phishing is to consistently reject any email or news that asks you to provide confidential data.

10. Check Back Frequently to Read About the Evolution of Malware

You should try keep up-to-date with the latest malware attacks, recommendations or advice to avoid any dangers on the net, etc.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Nwanda Internal News
(November 2016)

DAYS

Awesome Reward goes to:
Natasha Bothma, for stepping up to the tasks at hand
Francis Venter, for wrapping 31 Santa Shoe Boxes

Retirement:
Andrias Khuzwayo is officially retiring on the 15th of December 2016. We wish him a peaceful and healthy retirement.

Nwanda’s Year End Bash:
Get ready to wind down, relax and have some fun – 2nd December 2016 from 1pm at the Nwanda News Café

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Santa Shoebox:
This year the Nwanda staff donated 69 boxes, compared to 30 Santa Shoebox in 2013. A VERY BIG thank you to all who made it possible.

nwanda

Office closure:
We wish to notify our clients that our offices will be closed from 16 December 2016 and will reopen on 3 January 2017.

nwanda_christmas2016

Farewell to staff member:
We bid farewell to Saafiyah Bashir and wish her success in her future endeavours.

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Nwanda Internal News
(October 2016)

DAYS

Awesome Reward goes to:

Rafeeah Razak – For being your manager’s right hand
Roald van der Heiden – For being your manager’s left hand
Hennie de Beer and Merusha Yenketsamy – Embracing the role of a senior clerk

CTA Students:

Welcome back from study leave to all our CTA students, you were missed.

wb

Office closure:

We wish to notify our clients that our offices will be closed from 16 December 2016 and will reopen on 3 January 2017.

Farewell to staff members:

We bid farewell to the following staff members:
– Teboho Magodiele
– Natali Ferrao
We wish them success in their future endeavours.

internal

 

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Removing Directors of a Company

The Companies Act, 71 of 2008, requires that the business and affairs of any company be managed by or under the direction of its board, which has the authority to exercise all of the powers and perform any of the functions of the company, except to the extent that the Companies Act or the company’s Memorandum of Incorporation provides otherwise (section 66(1)). The Companies Act further requires that a company must have at least one director (section 66(2)), and further that only natural persons may serve in that capacity (section 69(7)(a)).Those individuals occupying the position of directors of a company are therefore responsible for managing the affairs of the company and they do so as custodians on the shareholders behalf. It should be remembered that the directors do not own the company: the company rather is owned by the shareholders and the directors serve to promote the interests of the company, and indirectly the economic interests of the shareholders. Quite often, in the case of private companies, the directors and shareholders may be the same individuals. However, where the directors have no or limited shareholding interest in the company itself, it may happen that the shareholders may wish to move to have certain directors removed and replaced on the company’s board if e.g. the company’s financial performance or operations are not satisfactorily conducted according to the shareholders’ liking.

Naturally, a director may be requested to resign under amicable circumstances. However, where a director refuses to resign (and may perhaps have the backing of other shareholders), the question becomes what remedies the aggrieved shareholders still have? It is possible to have these matters regulated in terms of the company’s Memorandum of Incorporation specifically to dictate under which circumstances a director may be removed from the board of a company. It could also be agreed with the director initially by way of a clause in the appointment contract.

Irrespective of whether the Memorandum of Incorporation or an appointment contract addresses the matter specifically, a director may always be removed by way of a majority vote at an ordinary shareholders’ meeting (section 77(1)). Before the shareholders of a company may consider such a resolution though, the director concerned must be given notice of the meeting and the resolution, and be afforded a reasonable opportunity to make a presentation, in person or through a representative, to the meeting, before the resolution is put to a vote (section 77(2)). In terms of procedures not entirely different from that as applied to shareholders, the directors may among themselves resolve to remove a director from the board of a company (sections 77(3) & (4)).

It is important for directors to realise that they serve at the pleasure of shareholders. It is likewise necessary for shareholders to know that they have remedies against directors who do not deliver on their mandate, and that keeping directors in check amounts to good corporate governance.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Impermissible Exchange Control “Loop Structures”

Many people or companies with offshore activities will be aware of the existence of exchange controls imposed by the South African Reserve Bank and monitored by its Financial Surveillance Department. Yet despite being aware of its existence, many do not appreciate what transactions are permissible and what would constitute a contravention of the exchange control regulations. In practice we often encounter such illegal structures, even though it may have been innocently created. One typical structure often encountered, and which the South African Reserve Bank considers to be illegal, is the so-called “loop structure”.Loop structures in essence involve a resident in the common monetary area (comprised of South Africa, Namibia, Swaziland and Lesotho, “the CMA”) investing via loan or shares back into the CMA through an entity non-resident in the CMA. For example, a structure whereby an individual owns shares in a UK company which in turn holds shares in a South African company will amount to an illegal loop structure.Share investments do not represent the only mechanism through which loop structures may be created: loans held back into the CMA through offshore entities, or even contingent rights created by way of a discretionary trust may also give rise to a loop structure. To give another example: if an individual is a discretionary beneficiary of an offshore trust, and which trust directly or indirectly holds loans receivable against or shares investments in South African companies, that too would be considered a contravention of the prevailing exchange control regime.In other words: a loop structure would be created where a South African resident holds South African investments (in whichever form) indirectly through an offshore entity.Although there is no blanket prohibition against all offshore investments which give rise to loop structures, the South African Reserve Bank is loath to approve these and take the view that any such structure created without seeking its prior approval amounts to an illegal structure. An exception which is noted though in the recently published Currency and Exchange Guidelines for Business entities (published by the Reserve Bank on 29 July 2016) involves companies which may hold between 10 to 20 per cent of the shares in an offshore entity, which may in turn hold investments in and/or make loans back to the CMA. (This dispensation does not apply though to foreign direct investments where the South African company on its own, or where several South African companies collectively, hold an equity interest and/or voting rights in the foreign entity of more than 20 per cent in total.)It is true that many people are completely unaware of the prohibition against loop structures and that these have inadvertently been created in the past without those involved being aware of the illegal nature thereof. If one were to voluntarily come forward and declare such an illegal structure though, taking also into account that the loop was inadvertently created, the Financial Surveillance Department may very well allow transgressing persons to unwind the unintended loop structure without levying penalties (which could otherwise amount to as much as 40% of the capital illegally exported from the CMA). It would be important for individuals and companies alike to be aware of these potentially illegal structures and to be sure that steps are taken to have these resolved as soon as possible. Given the newly introduced special voluntary disclosure programmes (SVDP) announced by National Treasury and which extends beyond tax transgressions only, it may now be an appropriate time to take steps to have such transgressions rectified.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Dividends Tax Compliance

Our clients will know that dividends tax replaced the old Secondary Tax on Companies (“STC”) on 1 April 2012 already. Briefly, the STC was a tax on companies and calculated as a factor of dividends declared by that company. The regime was somewhat out of touch with international trends though (which also gave rise to certain anomalies when South Africa negotiated double tax agreements with other countries): the international norm is rather what we have in South Africa today too, being a tax on shareholders (as opposed to the dividend declaring company) and which tax is withheld from payment of dividends to the shareholders. The dividends tax is levied at 15%. By way of an example therefore, if a person (not exempt from the dividends tax) were to receive R100 in dividends from a South African company, that company will only pay R85 to the shareholder, and R15 would be withheld and paid to SARS on the shareholder’s behalf.

Although in our experience most of our clients exhibit an understanding of how the dividends tax regime operates, many of our corporate clients appear to be unaware of their filing obligations which go hand-in-hand with both dividend declarations as well as dividends received. Companies are required to file a dividend tax return when declaring a dividend (section 64K(1A)), but persons are also required to file a return if they receive a dividend exempt from the dividends tax. Since generally all South African tax resident companies are exempt from the dividends tax, this will effectively translate into South African tax resident companies having to file dividends tax returns for all South African dividends which they receive too.

The necessary dividends tax returns (the SARS DTR01 and DTR02 forms) are required to be filed by the end of the month following the month during which the relevant dividend was paid/received. The dividends tax payment (where relevant) should accompany said return.

Therefore, even if a company only pays and receives dividends none of which are subject to the dividends tax the exempt taxpayer is still obliged to file the requisite returns. The returns are also not the only compliance requirement to be observed: where a shareholder relies on a double tax agreement in terms of which a reduced dividends tax rate is to be applied (as opposed to the statutorily imposed 15% applicable domestically), or that person is exempt from the dividends tax altogether, that shareholder must inform the company of this status by way of a declaration made, together with an undertaking that the shareholder will inform the company should the status of the aforementioned change in future. In the absence of such a declaration, the company must still withhold dividends tax even if the shareholder is, objectively speaking, exempt from the dividends tax.

As one will no doubt realise, non-observation of the relevant dividends tax compliance requirements – even if they do appear to be somewhat trivial and admittedly not practically heavily policed by SARS – one ignores these requirements at one’s own peril. In this instance non-compliance may have a significant impact if a taxpayer is upon investigation found to be wanting in this regard.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Nwanda Internal News (September/October 2016)

 

DAYS

Awesome Reward goes to:

Work performance:
Rafeeah Razak – For being a super junior
Roald van der Heiden – Embracing the role of a senior clerk

Prego Braai – 2nd September 2016 @ Nwanda Café:

Thank you for the super turn out of staff for our first Prego Braai.

Warm welcome to our new Nwanda team members:

For those unsure of the new faces in the office, a quick photo guide:

Farewell to a staff member:
We bid farewell to the following staff members:
 Ncamiso Simelane
 Sifiso Tshabalala
We wish them success in their future endeavours.

 

5 immunity-boosting foods you want to be eating

 

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Employer Interim Reconciliation

In the past SARS required the Employer Reconciliation to be done every twelve months. A few years ago SARS introduced the Employer Interim Reconciliation in addition to the annual Employer Reconciliation.

The Employer Interim Reconciliation have the same requirements as the Employer Reconciliation, with two exceptions:
1. The Interim Reconciliation is completed for six months only, and
2. The tax certificates generated during the Interim Reconciliation are only submitted to SARS and not distributed among employees, except in certain circumstances as set out in the table below.

The major benefit of performing the Employer Interim Reconciliation is that it decreases the pressure on employers with their Employer Reconciliation at the end of the tax year, as only six months have to be reconciled for each reconciliation.
The table below shows the major differences between the Employer Interim Reconciliation and the Employer Reconciliation for the tax year commencing 1 March 2016, followed by some tips on how you can prepare for the next Employer Interim Reconciliation.
table

Tip 1: Start preparing now
Get a jumpstart on the reconciliation process by starting to confirm employees’ personal details. Draw up a confirmation form of personal details needed to complete employees’ IRP5/IT3(a) tax certificates. These forms should be completed and signed by each employee and kept in the Employer Interim Reconciliation file as part of the working papers. The details that must be confirmed with employees are the following:

1. First two names and surname
2. Date of birth
3. South African ID number or Passport number and name of country which issued the passport
4. Income Tax reference number
5. Contact details:
• Postal address
• Residential address (including postal code)
• Cellphone number
• Home telephone number
• Work telephone number
• Fax number
• E-mail address
6. Banking details:
• Bank account number
• Bank account name
• Type of account e.g. savings or cheque
• Branch name
• Branch number
• Indication of whether it is their own bank account, a joint bank account or a third party bank account

Tip 2: Use the latest version of easyFile
Make sure that you use the latest version of easyFile when doing the Employer Interim Reconciliation as well as the Employer Reconciliation, as reconciliations and tax certificates done on previous versions of easyFile software will be rejected by SARS. Check the SARS website for updates and the most current version of easyFile software.

Employer reconciliations don’t necessarily need to be a nightmare. Some timely preparation will go far to make the reconciliation process smoother and less stressful.

If the above article raised any questions in your mind please do not hesitate to contact our office. We look forward to the opportunity to assist you.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

Reference List:
• www.sars.gov.za

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Employment Equity 2016

Who must report in 2016…

• All designated employers with 50 or more employees.
• Employers with fewer than 50 employees who are designated in terms of the turnover threshold applicable to designated employers (Schedule 4 of the Employment Equity Amendment Act No. 47 of 2013).
• Employers who have become newly designated on or after the first working day of April, but before the first working day of October, must only submit their first report on the first working day of October in the following year.
• Employers who voluntarily wish to comply in terms of section 14 of the EE Act.
• All designated employers must report annually irrespective of their size.

Useful Advice

• Manual and posted EE Reports will not be accepted after 3rd October 2016.
• EE Reports will not be accepted by fax or email.
• Check for incomplete sections or sections with errors.
• In the case of Online submission, complete and finalise corrections in the EE Reports by no later than 15 January 2017.
• Do not forget to press the submit button when your report is complete.
• No Changes are allowed after submission.
• A copy of the EEA2, EEA4 and the acknowledgement letter will be emailed to you after successful submission.
• If you have not received the EE reports and acknowledgement letter in your Inbox, please check in the Junk mail/Spam folders (Move mail from the Junk mail/Spam folders to Inbox before opening the attachments).

The Commission for Employment Equity Annual Report 2015-2016 make for interesting reading, enclosed please find the 16th CEE Annual Report.

EE threshold

The Employment Equity (schedule 4) sector threshold that determines whether a company is a designated employer has been revised. A designated employer is any employer employing more than 50 employees. If there are less than 50 employees, the schedule will apply.

Sector or subsectors in accordance with the Standard Industrial Classification
Agriculture [R2 m] R6 m
Mining and Quarrying [R7,5  m] R22,5 m
Manufacturing [R10 m] R30 m
Electricity, Gas and Water [R10 m] R30 m
Construction [R5 m] R15 m
Retail and Motor Trade and Repair Services [R15 m] R45 m
Wholesale Trade, Commercial Agents and Allied Services [R25 m] R75 m
Catering, Accommodation and other Trade [R5 m] R15 m
Transport, Storage and Communications [R10 m] R30 m
Finance and Business Services [R10 m] R30 m
Community, Special and Personal Services [R5 m] R15 m

Whilst the above may no longer apply to some companies if they employ less than 50 employees and turnover may now be less. This may not be the case for B-BBEE Scorecard compliance. The B-BBEE turnover threshold has also been revised, excluding industry-specific-sector codes.

• Exempted Micro Enterprises from R5 million to R10 millionWhilst the above may no longer apply to some companies if they employ less than 50 employees and turnover may now be less. This may not be the case for B-BBEE Scorecard compliance. The B-BBEE turnover threshold has also been revised, excluding industry-specific-sector codes.

• QSE (Qualifying Small Enterprise)from R5-35 million to R10- R50 million
• Generic from R35 million to R50 million

If your company is classified under this business sector and it employs less than 50 employees, you will need to do a voluntary compliance for EEA to comply with the BEE Requirements.

(http://www.saipa.co.za/articles/391726/employment-equity-threshold-increased)

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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