INDIVIDUAL TAX RETURNS
When does the 2024 tax filing season open and close?
- This is announced on an annual basis by SARS (South African Revenue Service), however, the South African Tax filing season typically opens in July every year, for all individual taxpayers.
- The published dates for the 2024 Filing Season are:
- Auto-assessment notices: 1 – 14 July 2024
- Individual taxpayers (non-provisional): 15 July 2024 to 21 October 2024
- Provisional taxpayers: 15 July 2024 to 20 January 2025
- Trusts: 16 September 2024 to 20 January 2025
What documents do I typically need to prepare a standard tax return?
- IRP5 employee tax certificate;
- IT3 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 happens if I am auto assessed by SARS?
- SARS will send an SMS notifying the taxpayer that they are auto assessed. The taxpayer can also log onto your SARS e-Filing profile / SARS Mobi app to check if they have been auto assessed.
- The taxpayer will need to check the auto/ estimate assessment against IRP5 certificate, medical and RA certificates to confirm if it does agree. If it agrees and if happy, the taxpayer can accept the estimate assessment as final. There will be no further action required from your end. Unless if you earned any other taxable income during the respective tax year (e.g., rental income, trade income etc) or contributed towards any public benefit organisation(s) – which would have not been declared on your estimate assessment.
- If the taxpayer does not agree with the auto assessment, they will be required to request for a correction.
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.
What happens if my tax return is selected for verification/audit?
- SARS gives taxpayers 21 working days from the issue date of the respective verification letter to honour the verification/audit request. In honouring this request you would be required to look at the verification letter issued by SARS to verify the information that SARS is requesting. The letter will serve as a guide as to what information SARS is requesting.
- Once verification is complete, SARS will issue a completion letter confirming that verification is complete.
How long does SARS take to process a refund?
- SARS will endeavour to pay the refund within a timeframe of 72 hours – should you maintain valid banking details on your RAV01 form, that are linked to your income tax number.
- If the tax return has been selected for verification, SARS will pay the refund upon finalisation of verification. Verification takes up to 21 business days from the date SARS receive the supporting documents 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.