This year's individual tax filing season began on 1 July, and taxpayers should be aware that the South African Revenue Service ("SARS") has made several changes to the tax return submission process.
WHO IS REQUIRED TO FILE A TAX RETURN?
An individual taxpayer who received taxable income is generally required to file an income tax return. However, a taxpayer does not have to submit a return if all of the following criteria are met:
- Their total remuneration, for the year of assessment under review, does not exceed R500 000
- They only received employment income from one employer for the entire tax year
- They did not receive any additional sources of income, including taxable interest, rental income, trade revenue, car or travel allowance, or any other fringe benefit
- They do not seek to claim any allowable deductions, such as medical expenses, retirement annuity contributions, travel expenses, and qualifying section 18A donations
Taxpayers who are auto-assessed by SARS may also be exempt from filing a tax return.
WHAT SHOULD I DO IF SARS HAS ISSUED AN AUTO-ASSESSMENT?
SARS will be assessing a number of taxpayers automatically through its auto-assessment process. These assessments are issued based on the information that SARS receives from employers, financial institutions, medical schemes, retirement annuity fund administrators, and other third-party data providers.
Taxpayers who receive auto-assessments must review them for accuracy and completeness. If the assessment is found to be correct, then the return will be viewed as submitted and final, thus necessitating no further action. However, a tax return must be prepared and filed if a taxpayer disagrees with the auto-assessment. This must be done within 40 business days from the date that the auto-assessment was issued.
HOW MUST A TAX RETURN BE FILED?
A tax return can be submitted to SARS in one of three ways:
- The first is through the SARS E-Filing channel where all information may be captured on the system and any requests for supporting documentation can be addressed.
- The second is via the SARS MobiApp. The app is a convenient, user-friendly way for taxpayers to complete their returns on their mobile phones.
- Lastly, taxpayers can request the assistance of a SARS branch office agent to help file their returns electronically. An appointment with the relevant branch office will be required for this purpose. It is also important to note that not all SARS agents are equipped to deal with technically complex queries, and, in this instance, it would be best to reach out to an experienced tax professional for support.
WHEN MUST A TAX RETURN BE FILED BY?
It is important to note that SARS has changed the timeframes within which tax returns may be submitted. The relevant income tax filing deadlines are as follows:
- 24 October 2022 – For non-provisional taxpayers and taxpayers who wish to submit their returns electronically through the assistance of a SARS agent.
- 23 January 2023 – For provisional taxpayers using the SARS E-Filing platform.
Taxpayers should be aware of their provisional tax status at all times. In general, taxpayers who meet the requirements to be provisional taxpayers typically have additional sources of income, such as rental income from real estate, a sole proprietorship business, or investment or interest income that exceeds the exemption criteria. Consequently, individuals in this category are subject to additional compliance requirements.
WHAT HAPPENS IF A RETURN IS FILED LATE?
When it comes to the application of administrative non-compliance penalties for late return filing, SARS has taken a hard stance. Any taxpayer whose tax return was not submitted by the deadline date, even if such return was late by a day, may be subject to these penalties. The extent of the penalties is dependent on the individual’s level of taxable income and is imposed on a monthly basis until such time that the outstanding return is filed. In addition, such individuals will not be able to obtain a tax clearance certificate while their tax status is reflected as non-compliant.
More importantly, failure to submit a tax return, when required to do so, may be a criminal offense. SARS has previously publicised, in the media, the names of offenders that were charged for failure to submit their returns.
Taxpayers are, therefore, encouraged to consult a tax practitioner to be sure that they are not falling foul of their compliance obligations.
Supervisor: Individual Tax Compliance, Johannesburg