Frequently Asked Questions

The determination of whether an individual breaks his or her tax residence is a factual enquiry on whether or not that person ceases to be ordinarily resident in South Africa. An individual, who is resident by virtue of the physical presence test, ceases to be a resident when that person is physically outside the Republic for a continuous period of at least 330 full days. A deemed disposal for capital gains tax purposes takes place at the time when an individual breaks his or her tax residence. The individual will be deemed to dispose of his or her worldwide assets, excluding immovable property situated in South Africa. 

Breaking tax residency does not depend on your residency status with the Department of Home Affairs nor your status with the South African Reserve Bank.

Yes, normal income tax rules apply to crypto assets and affected taxpayers need to declare crypto assets’ gains or losses as part of their taxable income. The onus is on taxpayers to declare all crypto assets-related taxable income in the tax year in which it is received or accrued.

The South African Revenue Service has been consulting with trading platforms and we expect that they will soon institute a reporting requirement for these entities.

The objective of a compilation engagement is to draft a set of annual financial statements according to the relevant standard (viz. ISRS 4410 (Revised) Compilation Engagements).

This process includes us;

• requesting the necessary financial and non-financial information from the client,
• assessing the trial balance and detailed general ledger,
• scrutinizing the trial balance for any unusual items,
• investigating unusual items or discrepancies,
• reconciling all balance sheet balances to relevant supporting documentation,
• holding discussions with those charged with governance, and
• preparing working papers and supporting schedules using the information provided.

Based on the information provided, we draft the annual financial statements using software and prepare the tax calculation for the entity.

A standard set of Annual Financial Statements may include a;

• Statement of Financial Position,
• Statement of Comprehensive Income,
• Statement of Changes in Equity,
• Accounting policies,
• Notes to the Financial Statements.

Please note that the above is not prescriptive and depends on the entity type and the applicable financial reporting framework adopted.

There are many advantages to preparing a set of Annual Financial Statements. The below list is certainly not exhaustive;

• Identifying trends.                                             
• Assessing progress and growth of the business.                                                                  
• Reviewing actual cash inflow and outflow by inspecting the Statement of Cash Flows.
• Assessing liquidity and solvency of the business by easily comparing assets and liabilities.          
• Ability to easily compare actual results to budgeted results.                                                
•  Financial information readily available for potential investors to review.
• Financial information available in an acceptable format for application of finance to banks.          
• If the entity records are ever subject to an audit of any sort, one of the documents that is often requested is a set of annual financial statements.

In addition to the provision of audit and independent review engagements, our firm also provides the following assurance services;

• Audits of Legal Practitioner’s Trust Accounts,
• Audits of Estate Agents,
• Audits of Body Corporates,
• Audits of Home Owner’s Association,
• Audits of Share Block Companies.

The information required is entity specific but would most commonly include;

• Founding document,
• For companies, all shareholder agreements,
• For companies and close corporations, specific financial and non-financial information.

Yes. As long as the reasoning is legitimate, the engagement may be accepted.

• Peace of mind to the stakeholders that the financial statements of the entity, present fairly, in all material respects, the financial position, financial performance and cash flows for the year then ended, in accordance with the applicable financial reporting framework,
• Feedback provided which will assist in assessing operating efficiency of internal controls,
• May assist in identifying operational inefficiencies and areas for improvement,                 
• Provide objective insight into the business operations and systems.