Due to the COVID-19 pandemic and the restrictions implemented, SARS has made changes to the 2020 season process. The 2020 tax season opens on the 1st of September 2020, and closes on the 16th of November 2020, for online submissions, and 22 October 2020, for branch filings. The 2020 return covers income activities – i.e. income received and deductible costs incurred – that occurred during the period 1 March 2019 to 29 February 2020. The changes are indented to ease the administrative burden of submitting a tax return, thereby encouraging compliance.
From the month of August, SARS will be generating auto assessments to taxpayers, to try simplify their return submissions. Based on the updated SARS guide, SARS will only auto-assess a taxpayer, where they have third party information available. Taxpayers who –
- were employed for the full 12 month tax period – 1 March 2019 to 29 February 2020 – and received an IRP5 certificate from their employer,
- made contributions towards retirement policies, and/or
- made contributions towards medical aid,
- will be selected for auto-assessment.
Should the taxpayer be selected for an auto assessment, it is important to note that SARS will not be able to include any other additional information on your tax return, that is not retrievable from a third-party; for example, if you receive a travel allowance, SARS will not be able to pre-populate the travel logbook details. It is therefore crucial to not just accept the auto assessment without thoroughly checking that all relevant information is included and accurate.
Similarly, SARS will not auto-assess taxpayers who receive additional income, such as rental income, investment income, freelance income, foreign income; or taxpayers who have received tax directives during the 2020 tax year. This group of taxpayers will have to follow the existing process of filing their tax returns. Where a taxpayer’s return is selected for auto-assessment, the taxpayer will receive a sms notifying them of the draft assessment prepared. The assessment will not be final and it will require the taxpayer to confirm their acceptance thereof.
With reference to the 2019 tax season, it is common for SARS to make a press release, where they detail the taxpayer’s who are not required to submit a tax return. Last year, SARS announced that taxpayers who met the following criteria will needed not submit a 2019 income tax return:
- Their total employment income for the year before tax is not more than R500 000
- They only receive employment income from one employer for the full tax year
- They have no other form of income (e.g. car allowance, business income, and rental income, taxable interest or income from another job)
- They don’t have any additional allowable tax-related deductions to claim (e.g. medical expenses, retirement annuity contributions and travel expenses).
Where the above requirements are going to be applicable for the 2020 tax filing season, it will be interesting to see how the auto assessment function will cooperate and be implemented.
|TYPE OF TAXPAYER||CHANNEL||DUE DATE|
|Non-Provisional and provisional taxpayers||Manually at a SARS Branch||22 October 2020|
|Non-provisional taxpayers||File electronically||16 November 2020|
|Provisional taxpayers||File electronically||31 January 2021|