South Africa drifted into economic standstill for the umpteenth time after President Ramaphosa announced that the country will embrace Level 4 lockdown restrictions once more. While the hospitality and tourism sectors are rightfully up in arms, the rest of the country look on as tax season approaches.
Lambert Daniel Roberts
Expatriate Tax
Team Manager
Hlengiwe Mkhize
Individual Tax
Team Manager
Many people are unsure about how this year’s tax season will be conducted, or even if there will be extensions or grace periods. Rest assured, SARS has expressed its intentions to continue with the tax filing process from 1 July 2021 as normal. With that determined stance in mind, it is best to be prepared. Here are some interesting points when doing your tax returns this year.
Auto assessments
For those not in the know, SARS can speed along the tax filing process by actioning an auto assessment, sometimes without informing you. This means that SARS will automatically complete an assessment based on data received from employers, medical schemes, retirement annuities and other third-party data providers. Do not be surprised when you find an auto-assessment pre-loaded on your profile, ready for you to accept.
While auto-assessments are intended to curb non-compliance, the consequences of it could include forfeiting refunds or other forms of tax relief due to you. It’s important to make sure that all information did pull through on the assessment and was recorded correctly. Travel allowances and rental incomes are examples of income that might not have been automatically included.
If an auto-assessment has been completed and loaded onto your profile, it is a good idea to seek professional advice before accepting it or editing any information on the return yourself.
Access to Information
Following on from the auto-assessments, expats often avoid full disclosure when submitting their returns. The view that SARS can’t tax what it can’t see, can be a dangerous view to hold on to.
Even if you are working in another country, the Common Reporting Standards (CRS) agreement is there to facilitate the exchange of information between countries, particularly that of earnings and investments while abroad. SARS can readily gain access to this information and hypothesize your tax returns in an auto-assessment based on the CRS reporting. If you have any offshore investments, remember to declare them in your tax returns to avoid any legal consequence.
Tax Type Transfer Changes
The changes to the Manage Tax Type functionality, are aimed at giving taxpayers full control during the Tax Type Transfer process. The transfer of profiles between tax practitioners are no longer allowed, as all request for transfers are sent to the taxpayer directly. SARS then issues an online Power of Attorney (POA) that must be authorised by taxpayers, or the registered representatives of Companies, for tax return type transfers to take effect. This also serves as tax practitioner’s appointments to interact with SARS via the E-filing platform.
To simplify and expedite these processes, SARS has removed multiple capture fields and added an authentication layer. While this seems like minor changes, it’s wise to get expert advice before making any changes to your profile.
Restricted Physical Visits During Third Wave
SARS has closed some of its branches to adhere to social distancing guidelines. Since it could hinder the process for some, SARS has shifted a renewed focus towards filing returns via the eFiling and SARS MobiApp platforms. Failing which, they offer telephonic assistance and virtual appointments with dedicated SARS agents, which is by appointment only.
However, attempting any of these avenues could result in a bottleneck that could leave taxpayers on hold for most of the day. All the more reason to get a tax consultant with digital and communication systems in place to facilitate the tax filing process on your behalf.
Travel Allowances