Newsletter | March 2016 Download print version
Index
Business ethics
Is outsourcing right for your business?
Setting staff goals and objectives for the year
Overseas expansion
TAX NEWS
The tax implications of a franchise arrangement: Franchise perspective
Special Economic Zones incentive comes into effect

Financial
management

Deadlines looming

Employer Annual Reconciliation starts
- 1 April 2016 -

Employer Annual Reconciliation ends
- 29 May 2016 -

Return of Earning deadline extended
- 31 May 2016 -

Start of Tax Season for individuals and trusts
- 1 July 2016 -

Chartered Accountants SA

1st Floor
Randpark Building
20 Dover Street
Randburg

PO Box 2444
Randburg
2125

Tel: +27 (0) 11 789-1011
Fax: +27 (0) 11 789-1012
Mail: info@wallrich.co.za
Web: www.wallrich.co.za

Dear Reader,

Welcome to our March 2016 newsletter. We hope you enjoy reading the articles we have prepared specially for you.

The 2016 Budget Speech was delivered by Finance Minister Pravin Gordhan on 24 February. You can view a summary of the
Budget Speech 2016 on our website,

Please feel free to contact us if you require further information on any of the topics covered.

Regards,

Rhoderic and Chrisna Roberts
Partners

Business ethics

The new generation of professionals, and our future workforce, are concerned about Corporate Social Responsibility (CSR) and want to work for ethical businesses.

The ethics of any company are determined by its actions. If bending the rules results in rewards for some people as a result of increased short term revenue, or other perceived benefit, then many in the business will rightly believe that ethics don't matter, performance does. In other words, the end justifies the means. There will almost always be a tension between doing the right thing versus prioritising short term gains.

Here are some tips to help you to build a more ethical business…

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Is outsourcing right for your business?

Social selling
Outsourcing is not just a strategic option for large international corporations, small and medium sized firms can also benefit from the efficiency, functionality and cost-savings of outsourcing. Outsourcing simply means ‘contracting out’ various functions of your business. A common misconception is that outsourcing is always done overseas. Moving your IT helpdesk to India can save a lot of money, but there are many providers in South Africa that can provide an IT helpdesk that is cheaper than having an in-house support function.

Cost savings
By outsourcing functions that were previously performed in-house, businesses can reduce their employee levels and related costs such as recruitment, salaries and benefits. By outsourcing a capital intensive function, you can also reduce the costs of equipment obsolescence and depreciation.

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Setting staff goals and objectives for the year

Motivating and retaining talented employees is important in any business. Setting goals, standards and objectives for employees and putting an appropriate appraisal process in place allows your team of people the opportunity to have their hard work recognised by the business.

The best way to do this is to clearly set out and jointly agree on expectations at the beginning of the year. Progress against expectations can then be discussed throughout the year, and a final assessment can be delivered at the end of the year.

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Overseas expansion

Given the increasingly global business world that we all now inhabit, perhaps 2016 is the year to consider expanding your business into overseas markets. Consider these factors when creating your overseas expansion strategy…

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TAX NEWS

The tax implications of a franchise arrangement: Franchise perspective

Many business owners operate franchise businesses that allow them to build their success by making use of the franchisor’s intellectual property, established business processes and image. Based on the increasing number of franchise arrangements and the contribution of these arrangements towards economic activity in South Africa, SARS has recently released a Draft Guide on the Taxation of Franchisors and Franchisees (hereafter the draft guide). Given the relevance of the views expressed in this guide for small business owners, this article sets out some of the more important aspects of the draft guide in relation to the tax implications of franchise arrangements from the perspective of franchisees.

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Special Economic Zones incentive comes into effect

During 2014 the Special Economic Zones Act (Act 16 of 2014) (SEZ Act) was promulgated. This legislation was aimed at replacing the Industrial Development Zones (IDZ) incentive which ultimately proved to be unsuccessful. Part of the SEZ incentive is a favourable tax regime that would apply to entities operating within the SEZ. The whole incentive system however remained inactive until an effective date was proclaimed. The proclamation for the commencement of the SEZ Act was published on 9 February 2016 and as such, the SEZ incentive took effect from this date. This article provides an overview of the tax benefits for businesses that fall within this incentive.

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