INDIVIDUAL TAX RETURNS
When does tax filing season open?
This is announced on an annual basis by SARS (South African Revenue Service), however, the South African Tax filing season opens in July every year, for all individual taxpayers.
Based on the 2022 tax filing season, a significant increase was noted in Auto-Assessments conducted by SARS. Further to this, the taxpayer was limited to 40 days to correct the assessment or face complex objection procedures. Thus, increasing the urgency of a taxpayer checking their status early in the filing period.
When does tax filing season close?
Non-provisional Taxpayers will typically have up to 23 October of the relevant year to submit their tax returns, whether online or at a SARS branch (by appointment only). However, this will also be announced by SARS and varies annually.
The deadline for electronic filing for provisional taxpayers is typically extended to January of the following year.
What documents do I typically need to prepare a standard tax return?
- IRP5 employee tax certificate;
- IT3(b) and (c) certificates from financial institutions in respect of interest, dividends, and capital gains;
- Retirement annuity fund contribution certificate;
- Donations certificate (if contributions made to approved PBO (Public Benefit Organisation));
- 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 relevant tax period must be declared on the return.
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 typically takes between 7-21 business days to process a refund to verified South African banking accounts. This period may, however, extend if your return is selected for verification.
TAX RETURNS FOR EXPATRIATES
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, 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. This must be reviewed on an annual basis.
TAX RETURNS FOR 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 assist SA tax residents to 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 may qualify for a foreign income exemption if they render their services outside the Republic, subject to certain requirements being met. Please note that the Section 10(1)(o)(ii) exemption is now capped at R1.25 million.
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 obligated 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 is 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.
TAX RETURNS FOR 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 when 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. Additionally, your profile must be fully compliant).
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.
CRYPTO TAX RETURNS
When do I pay tax on my crypto?
You pay taxes when you:
- Sell crypto for fiat
- Swop one coin for another
- Receive rewards, airdrop, interest, etc.
At what rate am I going to pay tax?
The rate at which you pay taxes on crypto depends on whether you are a trader or an investor.
- If you are a trader, your profits will be added to your taxable income, and you will be taxed according to your tax bracket.
- If you are an investor, you will be paying an effective 18% on gains.
Can I send crypto from South Africa to another country?
You are currently not permitted to send crypto outside of South Africa. You may, however, purchase crypto abroad via credit or debit card and send this back to South Africa.
Please note that you only have an R1 million yearly allowance to buy crypto abroad without any approval from the SARB/SARS. If you spend more than this allowance, seek approval first.
What happens if my crypto got stolen?
We can claim the cost of that specific crypto as a deduction if adequate proof has been obtained for the stolen crypto.