Global Courant
Tax season 2023 officially starts on Friday (July 7), but the South African Revenue Service (SARS) has already got the ball rolling with taxpayers receiving their automatic assessments from the start of the month.
As the season gets into full swing, individuals and businesses must be ready to comply with new regulations and rules.
“While complying with SARS guidelines can sometimes feel like a burden, it is really necessary to avoid potential fines or complications,” said Danielle Luwes, tax manager at tax specialist Hobbs Sinclair.
“Familiarizing yourself with SARS requirements, such as filing deadlines, payment terms, and specific fields for an accurate income statement, can help ensure a smooth tax filing process.”
The tax filing deadlines for the 2023 tax season are as follows:
Non-provisional taxpayers who file returns via the eFiling platform or manually: Opening: July 7, 2023 @ 8:00 PM Closing: October 23, 2023
Provisional electronic tax return: Opening: July 7, 2023 @ 8:00 PM Closing: January 24, 2024
Provisional Trusts and other legal entities (such as boards or bodies): Opening: July 7, 2023 @ 8:00 PM Closing: January 24, 2024
Corporate tax return:
For non-preliminary eFilers, payment terms have been adjusted as follows:
Taxpayers who are not in the car assessment population: Payment is due 30 days after a tax bill is mailed.
Taxpayers under automatic review: Payment is due 30 days after the closing date of the 2023 filing season.
Non-provisional taxpayers in South Africa have simple tax matters accruing from a standard monthly salary and are not required to make provisional tax payments.
Provisional taxpayers (such as freelancers), on the other hand, have more complex tax situations and must make estimated tax payments during the tax year, usually because their taxable income does not come exclusively from one source of employment.
Luwes emphasized the importance of complying with the above deadlines and regulations, stating: “It is essential for taxpayers to be aware of the filing deadlines to ensure that their tax returns are filed on time and correctly. Failure to comply with these deadlines may result in fines imposed by SARS.”
How to register
To best ensure compliance with income tax laws, SARS says a taxpayer must first be registered for income tax purposes.
South Africans can be automatically registered for income tax when they try to register for SARS eFiling, the online platform where people can complete tax-related processes.
An individual who wants to register can also register through their employer through SARS eFiling, where an employee is given a tax reference number. Furthermore, a person can approach a physical location to consult a service representative.
If you’re not sure if you’re already registered, SARS said you can ask your employer to use the SARS online query function or call our SARS Contact Center on 080 000 7277.
You can also send an inquiry to SARS requesting a Notice of Registration (IT150) that would display your tax reference number, SARS said.
coercion
After registration, taxpayers are obliged to submit an annual income tax return to SARS on the basis of the Government Gazette.
“Each year, SARS announces its Tax Season, a period when you are required to complete and file your annual income tax return. The income tax return to be completed by individuals is known as the ITR12 (Personal Income Tax Return),” said SARS.
The full list of SARS tax rates is accessible here.
Starting July 7, 2023 at 8:00 p.m., taxpayers will be able to access their tax returns via eFiling or the SARS MobiApp to complete and submit them online.
Those unable to file online must make an appointment to visit an office. It is important to have all the necessary tax certificates, such as IRP5/IT3(a), medical aid, and annuity fund, to accurately determine tax liabilities.
However, it is important to check whether you have already been automatically assessed by SARS before completing and submitting an ITR12 (example document attached at the bottom of this article).
Automatic assessment
Automatic assessments are a newly introduced procedure from SARS whereby an individual does not have to file an income tax return if they are notified that they are eligible for the assessment.
Taxpayers need not take any action if their automatically assessed gross income, exemptions, deductions, and rebates are correct. Automatic assessments will begin on June 30, 2023.
“If corrections are required, it is essential to submit a request for correction within the stipulated period of 40 working days. If you do not do this, the automatic assessment may become final,” says Luwes.
Things that may be different than before
According to Hobbs Sinclair, provisional taxpayers with business interests must declare their assets and liabilities on an expense basis.
“Taxpayers falling into this category with assets over R50 million are required to declare itemized assets at market value in their 2023 tax returns,” said Luwes.
In addition, people are now required to accurately disclose their foreign income. SARS has increased its efforts to target funds abroad. Luwes said the IRS had added three new fields to accurately identify foreign employment income that is subject to taxation outside South Africa.
For taxpayers who are married in community of property, half of their interest, dividends, rental income and capital gains are taxed.
“SARS has been working with the Department of the Interior to confirm marital status and retrieve ‘Married in community of property’ status from previous statements. In cases where both spouses are successfully matched and have interest investments, SARS will replicate the interest investment certificate on both spouses’ returns, ensuring a fair 50% tax assessment,” Luwes said.
Taxpayers who do not have to file a return
In its latest tax report, financial services company PwC listed a handful of cases where a taxpayer is not required to file a tax return.
The group said that an individual — or estate of a deceased person — is not always required to file an income tax return if their gross income consists of any of the following:
Remuneration of not more than R500,000 from any one source and employee tax has been withheld in respect of that remuneration; South African source interest income (excluding a tax-exempt investment) of up to: R23,800 for an individual under the age of 65; R34,500 for a person who is 65 years old
or older; or R23,800 for the estate of a deceased person; Dividends when the person was a non-resident during the tax year; Amounts received or accrued from tax-free investing A lump sum received from a pension fund, provident fund, pension retention fund, provident retention fund or annuity fund and tax has been withheld pursuant to a tax directive.
However, these exemptions do not apply to persons in the following circumstances, for example if a person:
allowances/advances paid or granted in respect of business travel, accommodation or subsistence; granted taxable benefits related to the use of a motor vehicle; or any amount received from or accrued in respect of services rendered outside South Africa.
ITR12
View an example of the personal income tax form to be completed:
Read: Lifeline for South Africa taxpayers – tax experts say you should grab it
