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International Tax Law South Africa's Minister of Mineral Resources, Susan Shabangu denied proposed adjustments to the Mining Act , based upon discussion's convened recently at the Africa downunder conference . The proposal of a plan to collect 40 percent of all resource profits from Mining corporations as well as a 6 percent return on investment on projects in Australia. , was a topic of much debate at the conference held in Perth,Australia on the 1-3 September 2010 . The proposed implementation of the tax in Australia resulted in a drop in confidence for the PM Kevin Rudd and his fundamental removal from office . This was further fueled by his deputy minister rallying for a reduction in such taxes .This resulted in the deputy minister Julia Gillard being elected as Prime Minister of Australia , making Kevin Rudd the nation’s shortest-serving prime minister in almost 30 years.Australian Prime Minister Julia Gillard scaled back the proposed tax on mining companies thus winning there support, and easing concern's on economic growth. PM Gillard’s agreement applies the tax to the profits of iron ore and coal and it extends the current Petroleum Resource Rent Tax to all onshore and offshore petroleum and gas projects.The levy will apply once a project’s return on investment exceeds 7 percentage points more than the 10-year government bond yield, currently about 5 percent. Previously it would have kicked in for any return above the bond rate.Currently its implementation is underway , however it directly will impact upon smaller iron ore and coal miners , whom possibly could have just developed a foothold in this industry .Based upon South Africa's Minister of Mineral Resources, Susan Shabangu stance on this matter , it would seem that no such matter is being explored . However with our current reform of our Mining Act , we must not consider such situations which would result in an economic downturn .The current proposals could halve from 12 months to six months the approval time for mining licenses, and from six months to three for prospecting licenses.The reform of the mining act should result in the exploration of new technologies within our country , but not the exploitation of resources . Capital Gains Tax and EmigrantsThe focus of this article will be on whether the primary residence exclusion for capital gains tax purposes is applicable within an emigration environment . Firstly it must be understood that Capital Gains tax forms part of the Eight Schedule to the Income Tax Act 58 of 1962. Before we enter into such a discussion we wish to reference the sections our investigation is based upon , to arrive at our conclusion . Paragraph 45 of the Eighth Schedule Paragraph 44 of the Eighth Schedule Paragraph 2(1)(b) of the Eighth Schedule to the Act. Section 35A of the ActParagraph 49 of the Eighth Schedule Primary Residence The definition of Primary Residence as defined in Paragraph 44 of the Eight Schedule is a) a residence in which a natural person or a special trust holds an interest andb) which that person or a beneficiary of that special trust or a spouse of that person or beneficiary ----(i) ordinarily resides or resided in as his or her main residence and (ii) uses or used mainly for domestic purposes. Applicability of Exclusion Paragraph 45 1) Subject to sub paragraphs (2) and (3) , a natural person or special trust must, when determining an aggregate capital gain or aggregate capital loss ,disregard so much of a capital gain or aggregate capital loss determined in respect of the disposal of a primary residence of that person or that special trust as does not exceed R 1, 5 million . Emigrants disposing of property in R.S.A The basis of the primary residence exclusion rule thus hinges on paragraph 44 section b , subsection (1) as stated above . Once an emigrant leaves South Africa they are viewed as no longer being ordinarily resident in the Republic . However, no deemed disposal of the property takes place on emigration as South Africa retains its tax jurisdiction over the property under paragraph 2(1)(b) of the Eighth Schedule to the Act.Therefore by virtue of the provisions of paragraph 2(1)(b) of the Eighth Schedule, even though the Emigrant is no longer ordinarily resident ,it will still attract capital gains tax on a post emigration disposal . It can thus be contested under this paragraph that if an emigrant can be subjected to a Capital Gains tax liability he can also enjoy relief under paragraph 45.The relief can be enjoyed under paragraph 45 , but must be proportionately reduced .
