Who should Complete a Tax Return? Government Gazette, 9 June 2017

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In terms of section 25 of the Tax Administration Act, 2011, Commissioner for SARS Tom Moyane promulgated Public Notice 547, which sets out the requirements for which persons how to submit income tax returns for 2017 year of assessment. In terms of section 25 of the Tax Administration Act, read with section 66(1) of the Income Tax Act, persons specified in terms of paragraph 2 of the Public Notice 547 are required to submit an income tax return within the prescribed period in paragraph 4 of the said Public Notice.

As the tax season of 2017 opens in just under two weeks, we shall examine the various categories of persons who are compelled by the Public Notice to submit income tax returns for 2017, as well as other important matters referring to the 2017 filing season.

Who must Submit Income Tax Returns for 2017 Year of Assessment

Both resident and non-resident companies, trusts or other juristic persons, who carried on a trade through a permanent establishment in the Republic, derived income from a source in the Republic, derived any capital gain or capital loss from the disposal of an asset to which the Eighth Schedule to the Income Tax Act applies, every company incorporated, established or formed in the Republic, but which is not a resident as a result of the application of any agreement entered into with the Government of any other country for the avoidance of double taxation, are liable to submit income tax returns for 2017 year of assessment..

All resident and non-resident natural persons, who:

Carried on any trade (other than solely in his or her capacity as an employee);

  • Was paid or granted an allowance or advance as described in section 8(1)(a)(i) of the Income Tax Act (other than an amount reimbursed or advanced as described in section 8(1)(a)(ii)) and whose gross income exceeded the thresholds set out in paragraph (4) below;
  • Was granted a taxable benefit described in paragraph 7 of the Seventh Schedule to the Income Tax Act and whose gross income exceeded the thresholds set out in paragraph (4) below;
  • Are residents and had capital gains or capital losses exceeding R40 000, and for non-residents who had capital gains or capital losses from the disposal of an asset to which the Eighth Schedule to the Income Tax Act applies;
  • Is a resident who held any funds in foreign currency or owned any assets outside the Republic, if the total value of those funds and assets exceeded R225 000 at any stage during the 2017 year of assessment;
  • Is a resident who had any income or capital gains from funds in foreign currency or assets outside the Republic;
  • Is issued an income tax return form or who is requested by the Commissioner in writing to furnish a return, irrespective of the amount of income of that person;
  • Is an estate of a deceased person that had gross income;
  • Is a non-resident whose gross income included interest from a source in the Republic and is not subject to the exemptions contained in Section 10 (1) (h) of the Income Tax Act
  • Is a representative taxpayer of any persons are all liable to submit and file income tax returns for 2017 year of assessment.

Who is Exempt from Submitting Income Tax Returns

Natural persons and estates of deceased persons, if the gross income of that person consisted solely of gross income, such as remuneration paid or payable from one employer, which does not exceed R350 000 and employees’ tax has been deducted or withheld in terms of the deduction tables prescribed by the Commissioner, dividends received by, or accrued to natural persons who were non-residents throughout 2017 year of assessment; and amounts received or accrued from a tax-free investments, do not need to file income tax returns. In addition to this requirement, interest (other than interest from a tax-free investment) from a source in the Republic not exceeding:

  • R 23 800 for natural persons below the age of 65 years;
  • R 34 500 for natural persons aged 65 years, or older;
  • R 23 800 for the estates of deceased persons is not subject to income tax.

Natural persons, who have received income not exceeding R 75 000 per year for persons under the age of 65 years; R 116 150 per year for persons older than 65 years, but under the age of 75 years and R 129 850 per year for persons older than 75 years will not be liable to submit and file income tax returns for 2017 year of assessment.

Deadlines for Income Tax Returns Submissions

The periods within which income tax returns must be furnished are for companies within 12 months after the end of the financial year end and for all other persons, which includes natural persons and trusts:

  • On, or before 22 September 2017 for all manually submitted income tax returns;
  • On, or before 24 November 2017 for all income tax returns submitted by using the SARS eFiling platform or electronically through the assistance of a SARS official at an office of SARS;
  • On, or before 31 January 2018 if the return relates to a provisional taxpayer and is submitted by using the SARS eFiling platform.

Forms of Income Tax Returns

The forms prescribed by the Commissioner for the submission of income tax returns are obtainable on request via the internet at www.sarsefiling.co.za or from any office of SARS, other than an office which deals solely with matters relating to customs and excise.

Good luck with the submissions of your income tax returns! We are here to assist you if you need any advice and guidance for the completion and submission of your income tax return, or if you are aggrieved by the assessment received from SARS.

Herewith a link for ease of reference:

Public Notice from SARS in terms of section 25 for submission of 2017 income tax returns, released on 9th June 2017

 

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Sayonara to Tax Free Earnings

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Sayonara to Tax Free Earnings

The proposed amendment to section 10(1)(o)(ii), the exemption section referred to often as the so-called 183-and-60-day rule aims to limit the current tax-free earning situation of South African tax residents working abroad.

Under the current regime, taxpayers who are resident in the Republic and earn an income under a foreign flag, are exempt from paying tax on that income under 183-and-60-day rule. The proposed amendment aims to remove this exemption for taxpayers who are not taxed in the country in which they render their employment services.

There is currently no certainty as to when the proposed change will occur, given that it was announced at the 2017/2018 budget speech by current Finance Minister, Pravin Gordhan and there has, thus far, been no invitation for commentary by the public. More importantly, will the date promulgation of the amendment and the effective date differ? Will SARS apply the change retrospectively as it so surreptitiously did with employee relocation allowances?

In future, on the anticipated law change, an employee will need to prove that the income received for employment services abroad was taxed in the country in which the services were rendered. Without being able to prove this, the employee would not enjoy the benefit of the current tax exemption. On a side note, this will only be in reference to income tax on the employment income and not VAT, dividends tax or corporate tax.

Where the taxpayer remains tax resident, South African expatriates abroad must accept that the days of earning completely tax-free are over. Naturally, with the correct expert advice, avenues can be sought to reduce the impact of this proposed amendment.

Naturally, we await progress with eager anticipation and will keep our clients abreast of any news hereon.

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SARS to Exchange Tax Information with over 50 Jurisdictions

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SARS to Exchange Tax Information with over 50 Jurisdictions

The South African Revenue Service (SARS) has committed to the automatic exchange of tax information with the revenue authorities of over 50 other jurisdictions under the Organisation for Economic Co-operation & Development (OECD) Common Reporting Standard (CRS) by September 2017.

This international initiative goes hand-in-hand with SARS’ proposal to close the tax net on South African expats, many of whom have simply stopped starting submitting tax returns, completed zero tax filings and / or otherwise not complied with income tax and capital gains tax rules.

Banks will be required to provide to SARS financial information which includes: interest, dividends, account balances, income from certain insurance products, sales proceeds from financial assets and other income generated with respect to assets held in the account or payments made with respect to the account. This links back to South African passports, which create the reporting obligation.

Tax Residence in South Africa or in another jurisdiction will also form part of the CRS disclosure. This may include providing proof of foreign tax residency and, according to Marius Engelbrecht, our lead tax partner on personal tax compliance, we have seen a number of accounts being closed where the taxpayer appears to have been non-compliant.

He recommends the initial step is always to establish your current SARS compliance and according to latest statistics, only between about 25% of expatriates that ask us to check their status are fully up to date and compliant.

President Jacob Zuma Signs Bills Into Law

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The following Bills were promulgated and signed on 11 January 2017 by President Jacob Zuma:

  • The Taxation Laws Amendment Act;
  • The Tax Administration Laws Amendment Act, 2016;
  • The Rates and Monetary Amounts and Amendment of Revenue Laws (Administration) Act, 2016; and
  • The Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2016.

Several changes have been made to various sections which are now applicable.

eFiling Profile Hacking

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VISIT YOUR NEAREST SARS BRANCH TO VERIFY CHANGES TO YOUR PERSONAL

Some taxpayers recently received messages from SARS about the changing of their personal details. If you received this message (and to ensure that the resultant changes are not fraudulent) you are kindly requested to visit your nearest SARS branch as soon as possible with the following supporting documents:

  • Valid original or temporary Identification Document (Green ID book / new ID card / Original Passport/ Driver’s Licence) and a certified copy thereof;
  • Original stamped bank statement not more than three months old that confirms the account holder’s legal name, bank name, account number, account type and branch code, where applicable, or where a new bank account was opened in the past 30 days and a bank statement cannot be produced, an original letter from the bank not older than one month on the bank letterhead with the original bank stamp reflecting the date the bank account was opened;
  • Copy/original proof of residential address or completed CRA01 in the case of proof of residential address that is in the name of a third party; and
  • Power of Attorney in the case where a registered tax practitioner/representative visit the branch to request the stopper to be lifted on behalf of the taxpayer.

For enquiries, please call the SARS Contact Centre on 0800 00 7277.

Guide: SVDP Version 1.2

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A draft guide on the special voluntary disclosure program was issued and deals with the time frame as well as the relief offered to taxpayers on international un-declared assets.

For access to the entire guide, please click here.