Tax compliance now mandatory
Tax is never mentioned in the previous Estate Agency Affairs Act 112 of 1976. However, under the Property Practitioners Act, practitioners who are not in possession of a valid tax clearance certificate will not be issued with a Fidelity Fund certificate (Section 50(a)(vii)).
Without a Fidelity Fund certificate, they will not be allowed to carry on doing business (Section 48(1)(a)). This is also true if anyone they employ as a property practitioner is not tax compliant as well (Section 48(1)(b)).
SARS will only issue a taxpayer with a tax clearance certificate if all their returns have been submitted up to date, and their account is paid in full.
Practitioners have until 31 October to apply for renewal of their Fidelity Fund certificate, as stated in Chapter 5 of the Property Practitioner Regulations, 2022.
“Tax compliance is now a core concern that can impact business continuity significantly, so making it digital ensures it can be carefully administered, especially where remote workers are involved,” says JK Du Toit, CEO of the Good People Data Company.
Digitalisation provides a centralised repository to which practices and their employees can upload compliance documents for reconciliation. It also offers business rules, workflows and process automation that can be applied to compliance, such as prompting employees for information or escalating late submissions for management’s attention.
In addition, modern analytics can offer a wealth of information, not just on business performance but also tax performance as a component of practice compliance.
Tax advisory
Property practitioners will have a lot more on their plate when it comes to tax. They must consider:
- Their own tax affairs
- Their company’s tax affairs
- The tax affairs of every property practitioner in their employ
If even one of these parties is not tax compliant, it puts them at risk of not obtaining their Fidelity Fund certificate. This endangers the entire practice’s ability to continue doing business.
It is easy to see how this could be overwhelming for a managing practitioner and creates a difficult and awkward situation if an employee is not personally tax compliant.
This, says Baijoo, is why it is essential to augment the convenience of the digital management process with real-world taxation and legal expertise for every member of the practice.
In addition, SARS is now an active player in practitioner compliance. Dealing with the tax authority when resolving its queries can be a long and tedious journey that could stretch past the Property Practitioner Regulator’s deadline.
“As an authorised participant in the service, TCSA becomes part of the solution, providing confidential oversight, tax assurance services and legal advice to its users, on demand,” says Baijoo.
The digital practice
The new Act means that practices cannot be effectively managed without considering the implications of tax compliance. TCSA and The Good People are convinced that an end-to-end digital practice solution, backed by tax expertise, will ensure tax and PPR compliance are properly administered.
“The synergy of this partnership promises to introduce greater innovation and promote the efficiencies of the digital practice to the property market,” says Du Toit.
Baijoo agrees: “We’re excited about the sheer possibilities our collaboration holds in bringing hybrid tax solutions to these digitally transformed businesses.”
Please feel free to contact Jashwin Baijoo at jashwin@taxconsulting.co.za for assistance with your tax compliance, or JK du Toit at jk.dutoit@tgpdc.com for assistance in setting up your digital practice solution.
