INDIVIDUAL TAX
When does tax filing season open?
- Tax seasons opens on 1 July 2021 for all individual taxpayers.
- However, a significant number of individual taxpayers will be auto-assessed starting from 1 July 2021. These taxpayers will have an opportunity to manually file their returns should they not agree to the auto-assessment.
When does tax filing season close?
- Taxpayers who cannot file their returns electronically will have up to 23 November 2021 to submit their tax returns at the branch (by appointment only).
- Taxpayers will have up to 23 November 2021 to file their tax returns online.
- The deadline for electronic filing for provisional taxpayers is extended to 31 January 2022.
What documents do I need to prepare the tax return?
The following information is needed:
- IRP5 employee tax certificate;
- IT3(b) and (c) certificates from financial institutions in respect of interest, dividends and capital gains;
- Retirement annuity fund or pension fund contribution certificate:
- Medical Aid certificate of contributions; and
- Travel logbook (related to travel allowances received)
Further to the above, any additional income received by the taxpayer during the tax period must be declared on the return.
Since the threshold for submitting tax returns is R500 000, am I required to submit a return even though I earn below the threshold?
You are not required to file a tax return if your income for the tax year is not above the R500 000 threshold, and you meet the following requirements:
- Your remuneration is paid from one employer;
- You have no car or travel allowance, a company car fringe benefit, which is considered as additional income;
- Your employee tax (PAYE) has been deducted or withheld; and
- You did not earn any other additional income such as rentals, dividends, interest, etc.
What are the odds that SARS suddenly flags all the old tax returns as outstanding, when previously they never reflected as outstanding?
The odds are high for tax returns to be flagged by SARS for periods where taxpayers are required to submit a return and a return was not submitted, i.e. periods where the taxpayer did not meet all the requirements of the threshold.
How long does SARS take to process a refund?
SARS takes up to 7-21 business days to process a refund to verified South African banking accounts.
EXPATRIATE TAX
How do I know if I am a resident or non-resident when submitting my returns?
- A taxpayer’s residency status is determined using the residency tests outlined in our Income Tax Act, being the ordinarily residence test and the physical presence test.
- A taxpayer’s circumstances and history will have to be assessed, preferably by a tax professional against the criteria, to determine the residency status of the taxpayer and how they will submit their returns to SARS.
RESIDENTS
As a South African resident working abroad, do I have to pay taxes in South Africa with regards to foreign income?
South African tax residents are taxed on their worldwide income and as such, foreign income earned (including fringe benefits and bonuses) by a South African tax resident must be declared to SARS for tax purposes. We offer a potential expatriate tax calculation service to help SA tax residents determine their potential tax liability.
If I’m working for a South African company, do I qualify for foreign income exemption when rendering my services outside the Republic?
Yes, South African tax residents working for South African employers do qualify for foreign income exemption if they render their services outside the Republic. Please note that the Section 10(1((o)(ii) exemption is now capped at R1.25 million.
In light of the 1 March 2021 tax law changes, if I’m below the R1.25 million threshold, do I still need to declare my foreign income even though it is fully exempt?
Yes, to benefit from the exemption you are still required to declare your foreign employment income and thereafter claim the exemption accordingly.
If I do not qualify for s10(1)(o)(ii) exemption and I have already paid taxes on that income abroad, will I have to pay taxes twice?
Yes, even though you have paid taxes abroad in respect of your income earned, your income must still be declared to SARS and be subject to South African tax. It’s important to note that taxpayers who are subject to double taxation may take advantage of the available South African tax treaties to avoid double taxation. This process also needs to be declared and submitted to SARS.
NON-RESIDENTS
Must I have earned South African sourced income to submit a tax return?
Non-residents with active tax reference numbers will still be required to submit a tax return even where they have not earned South African sourced income. Such a return will be a zero return. The obligation to submit a return will fall away where you have no South African sourced income and have deregistered your tax number. (You may only deregister once you dispose of all your assets in South Africa such as bank accounts, properties, trusts, shares and policies).
How do I eliminate double taxation on income earned in South Africa?
Where there is a double taxation agreement signed between South Africa and the State in which you are a tax resident, the double taxation agreement will determine which country has taxing rights in respect of the relevant income earned. Where both South Africa and the State in which you are a tax resident have taxing rights, you will need to claim foreign tax credits from that State in respect of the taxes already paid in South Africa.
I’m a non-resident who ceased working in South Africa and now earn a pension and annuity income from a South African pension fund. Where do I pay the taxes relating to the income I’m receiving?
The double taxation agreement between South Africa and the State in which you are a tax resident will ascertain which country has taxing rights in respect of such income. Where the double taxation agreement is silent on the matter or there is no double taxation agreement between the two countries, you would need to claim foreign tax credits in respect of the taxes already paid in South Africa in the State in which you are a tax resident.
Do I need a South African bank account when claiming my refunds?
It is much quicker for SARS to verify and process refunds to a South African account than for a foreign bank account.