The draft Taxation Laws Amendment Bill, 2016 (TLAB) was released for comment on Friday, 8 July 2016. In terms of the TLAB it is proposed that the definition of ‘small business corporation’ in s 12E of the Income Tax Act be amended to include a personal liability company as contemplated in s 8(2)(c) of the Companies Act, 2008. The proposal is in line with submissions from various professional bodies, including the LSSA and SAICA.
It is, however, proposed in terms of the TLAB that the amendment be deemed to have come into operation on 1 March 2016 and apply in respect of years of assessment ending on or after that date. If the amendment can be made to have retrospective effect to March 2016, there is no reason in principle why it should not be made to have effect from 2010, when the reference to the Companies Act, 2008 was initially inserted. There might, however, be practical difficulties where tax returns have already been submitted and assessed.
The LSSA will be making a submission to this effect to National Treasury, particularly in light of the experience of attorneys in this regard.