Aug 25, 2021
Towards the end of July, president Cyril Ramaphosa announced a series of emergency tax relief measures in response to the continuing Covid-19 pandemic and recent unrest, helping affected and tax compliant businesses recover and ensure livelihoods for employees.
Further details of the proposed measures were provided by the minister of finance and the National Treasury
The South African Revenue Service (SARS) said it will implement these tax relief measures because compliant taxpayers have paid their fair share of tax, making it possible for the government to provide such a temporary safety net in a time of extreme difficulty.
SARS Commissioner Edward Kieswetter said: “The first quarter of the current financial year had exceeded expectations and had outperformed revenue collections for the same period over the past three years.”
Kieswetter reiterated SARS’ commitment to providing clarity and certainty to taxpayers so that they fulfil their legal obligations effortlessly and pay what is due. He said SARS will endeavour at all times to “make it easy and seamless for taxpayers when they transact with the organisation”.
However, he sent out a clear and unequivocal message that SARS has the capability to “detect and it make it costly for those that are determined to be non-compliant with their legal obligations and engage in criminal malfeasance through fraudulent means against the organisation.
“The use of big data, artificial intelligence and the latest technology enables SARS to offer digital services to protect taxpayers and staff during the Covid-19 lockdown restrictions and further buttresses SARS efforts in delivering on our mandate.
SARS provided an overview of the relief measures applicable to Small, Micro, and Medium Enterprises (SMMEs) and others. The announced measures are:
- The introduction of a tax subsidy of up to R750 per month for the next four months for private sector employers who have employees earning below R6,500. This subsidy will be provided under the current Employment Tax Incentive.
- Tax compliant businesses with a gross income of up to R100 million will be allowed to delay 35% of their pay-as-you-earn (PAYE) liabilities over the next three months, without penalties or interest.
- Tax compliant businesses in the alcohol sector can apply to the SARS for deferrals of up to three months for excise duty payments.
- Employment Tax Incentive (ETI) tax relief
Tax relief under the ETI is available for a four-month period from 1 August 2021 to 30 November 2021. The first extended ETI can be claimed in your August EMP201, SARS said. The maximum monthly amount that will be permissible under the ETI during this period will be increased according to the following criteria:
- Employees are eligible under the current ETI Act from R1,000 to R1,750 per month in the first qualifying 12 months and from R500 to R1,250 per month in the second 12 qualifying months.
- Employees from the ages of 18 to 29, who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months, or are not eligible as they were in the employer’s employment before 1 October 2013, from not eligible to R750 per month.
- Employees from the ages 30 to 65 years who are not eligible for the ETI due to their age, from not eligible to R750 per month.
- SARS said it will also pay monthly ETI refunds for the four-month period instead of every six months, as is normally the case. Refunds will commence by 13 September 2021, subject to any verification or audit steps that may be required.
To claim tax relief under the ETI:
- Capture the full PAYE Liability (The form will calculate the PAYE payable at 100%, you cannot change this value).
- Capture the ETI Calculated.
- Calculate 65% of the PAYE Liability in terms of the tax relief for PAYE for the first three (3) months.
- Limit the ETI Utilised to the lesser of ETI Calculated or 65% of the PAYE Liability for the first three months or 100% of the PAYE liability in the fourth month.
- Calculate the Total Payable as (65% of the PAYE Liability for the first three months, or 100% PAYE liability for the fourth month) less ETI Utilised plus SDL Payable plus UIF Payable.
PAYE tax relief period
The tax relief for PAYE is available to qualifying businesses for the three month period from 1 August 2021 to 31 October 2021. The first deferment can be claimed in your August 2021 EMP201 return, which is due by 7 September 2021.
To claim tax relief for PAYE:
- Complete the EMP201 as per normal with the full PAYE Liability (the form will calculate the PAYE payable at 100%, you cannot change this value)
- Calculate the Total Payable as 65% of the PAYE Liability plus SDL Payable plus UIF Payable.
SARS warned that those who make late payments would forfeit the benefit of the tax relief for PAYE, and SARS will impose penalties and interest on the calculated Total Payable.
Payment of the deferred PAYE liability
After the 7th of November 2021, SARS said it will determine the four equal payments for the total amount that you have deferred and include it in your monthly Statement of Account.
Payments will be made over a four-month period that will commence on 7 December 2021, with the last payment due by 7 March 2022.
Alcohol industry: Payment Deferral of Excise Duty Payments on Alcohol
The tax body said that due to the restrictions on the domestic sale of alcoholic beverages, tax compliant businesses in the alcohol sector can apply to SARS to obtain deferrals of up to three months for excise duty payments.
It stressed that this can only be done after the circumstances are set out to justify the deferral. Clients must apply in terms of rules 105.01 to 105.04 of the Customs and Excise Act, 1964 for deferral of payment, and each case will be considered on its merit.
“This is expected to help a significant number of businesses that are under pressure in terms of cash flow and their ability to honour payments to SARS,” it said.
Article originally published in BusinessTech
Aug 11, 2021
Not everyone who has earned an income in the current tax year needs to file a tax return.
SARS has announced that their filing season will run from July 1 to November 23 for individual taxpayers, with taxpayers being encouraged to file online. Provisional taxpayers, including trusts, will have until January 31 2022 to file via eFiling or the MobiApp. Because of the rise in the third Covid-19 wave of infections, SARS has temporarily closed its physical branches with the intention to re-open them on August 16 2021, although this is subject to review. However, the temporary closure of its branches will not affect those who file via eFiling or through the SARS MobiApp.
Determining whether you need to submit a tax return
Not everyone who has earned an income in the current tax year needs to file a tax return. This is because, as an individual, you were only liable to pay tax if your taxable income was more than the tax thresholds, which for the March 2020 to February 2021 period were as follows:
- R83 100 for individuals younger than age 65;
- R128 650 for individuals older than 65, but younger than 75;
- R143 850 for individuals aged 75 and older.
Further, if all of the following criteria apply to you, you do not need to submit a tax return:
- Your total pre-tax salary for the year was not more than R500 000 and employees’ tax has been deducted or withheld in terms of the deduction tables, and
- You only received employment income for the full year of assessment from a single employer, and
- You have no car allowance, company car, travel allowance, interest income or rental income, and
- You are not claiming tax related deductions.
If you are a South African tax resident and have earned above the tax threshold, you will need to file a tax return if you have had more than one employer or income source during the tax year. For instance, if you are formally employed and earn a rental income from an investment property, you will be required to file returns. Also, if you changed employers during the course of the tax year, this will qualify as two different income streams and you will be required to file a return.
In certain circumstances, you may be required to file a tax return regardless of whether your taxable income exceeded the tax threshold or not. For instance, if you carried on a business in or outside of South Africa, sold assets and the capital gain was more than R40 000 for the tax year, or where you owned foreign currency or assets exceeding R250 000 at any time during the tax year, you will be required to submit tax returns.
If you are unsure whether you need to submit an ITR12, it’s best to follow these guidelines issued by SARS, Do you need to submit a tax return?, which set out nine questions relating to your income during the year of assessment.
Preparing for your filin
If you have not yet received your IRP5 or IT3(a)s and other tax certificates, such as your medical aid certificate or retirement annuity certificate, you should contact your employer and/or service providers to obtain these as soon as possible. Other documentation that you will require to complete your submission includes the following:
- Certificates received for local interest income, foreign interest income, and foreign dividend income. Remember, if you are married in community of property, the certificates received by both you and your spouse are required.
- Proof of qualifying expenses from your medical scheme for the period March 1 2020 to February 28 2021.
- A logbook to claim business travel deductions where you receive a travel allowance or a fringe benefit from an employer-provided vehicle.
- All information pertaining to both local and foreign capital gain transactions.
- Documents and receipts for commission-related expenditure.
- All information relating to the letting of assets.
- All information relating to income that must be declared or deductions that must be claimed.
As a taxpayer, you have the choice of filing your returns via the eFiling site, the MobiApp, or in person. However, with the temporary closure of the SARS offices, filing in person will not be possible until at least mid-August. If you choose to file via eFiling or the MobiApp, SARS agents are available to assist you telephonically.
The MobiApp has recently been enhanced to include additional services which can be accessed with or without data or airtime, and these include the ability to request an eBooking appointment, confirmation request to determine whether to submit a tax return, the issuing of a Tax Registration Number, and requesting a statement of appointment.
Those taxpayers who cannot file online or through the app can do so physically through a SARS branch, but this will take place by appointment only. Taxpayers have been advised not to arrive at a SARS branch until further notice. To make an appointment with SARS, you can send an SMS to request a booking or call the SARS Contact Centre on 0800 00 7277.
Auto-assessments
In order to expedite the eFiling process, SARS will be actioning auto-assessments on around 3 million taxpayers. To do this, SARS uses data received from employers, medical schemes, financial institutions, retirement annuity funds and other third-party data providers. If you have been selected for auto-assessment, you will receive an SMS notification from SARS to this effect. Upon the collection of data, SARS will complete an auto-assessment which will be pre-loaded against the taxpayer’s profile. If you are happy with the outcome of the auto-assessment, you can accept it online which means that you no longer need to file a tax return because SARS has effectively done this for you.
If you are due a refund, SARS will pay the refund to you as per normal, as long as SARS has your correct bank details on record. If you owe SARS money, you can make payment as per the normal process on eFiling, via EFT or the MobiApp. Before accepting your auto-assessment, be sure to check that all the prepopulated third-party information displays correctly on your tax return before you accept your auto-assessment.
If you are not happy with the auto-assessment, online functionality allows you to edit your returns. If you have additional deductions to claim, such as rental income, excess medical expenses, or home office deductions that have not been pre-populated, you need to enter these online. Remember, the onus is on you to ensure that the information declared is accurate, and not fully declaring all your income can result in non-compliance penalties.
Claiming for home office expenses
If you work from home and have a dedicated room from which you work, you may be allowed to deduct certain home office expenses for tax purposes, with these being calculated on a pro-rata basis. In order to qualify, the room must be used regularly and exclusively for your ‘trade’ or employment and must be appropriately equipped for the purposes of your trade, for example, it must include a desk, computer, printer, or whatever you need to adequately conduct your trade.
If you are remunerated by salary, you must perform more than 50% of your duties in your home office. You can also qualify for a tax deduction where more than 50% of your remuneration is made up of commission or variable payments based on your work performance and where more than 50% of those duties are performed outside of your employer’s premises.
When applying for a deduction, you will be required to provide proof that your employer permitted you to work from home. If you earn a salary but the majority of your time is spent on the road, visiting clients or at other locations, you will not qualify for a deduction. Home office expenditure in this context refers to the rental, costs of repairs, and expenses in connection with the premises including phones, internet, stationery, cleaning and office equipment. Home offices expenses are calculated on a pro-rata basis using the square meterage of your home office versus the total square meterage of your home using a pre-determined formula.
Importantly, keep in mind that when a taxpayer claims home office expenses in respect of a primary residence, the capital gains tax exemption that applies on the sale of the property falls away in respect of the gain attributable to the portion of the property used as a home office. If part of the primary residence has been used as a home office, then the primary residence exclusion of R2 million must be apportioned for the non-residential use.
With thanks to MoneyWeb for this article.
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