Employer Annual Reconciliation Declaration closes on 31 May 2023
Employers are reminded that the annual reconciliation declaration closes on 31 May 2023. The Pay-As-You-Earn (PAYE) BRS for Employer Reconciliation version 22 1 0 has been published and provides information to assist in the submission of the declaration. We want to encourage employers to work with the SARS branches and education teams to resolve any difficulties they may experience and to ensure that their submissions are made on time.
Administrative penalties will be imposed for PAYE where an employer has failed to submit an EMP501 reconciliation declaration on time (i.e., after the final due date for submission):
- Administrative penalty will be implemented in 1% increments over 10 months from June 2021 in respect of the reconciliation ending 28/29 February 2021 and for subsequent years. A penalty up to a maximum of 10% will be levied if the reconciliation is not submitted during the 10 months from June 2021.
- Administrative penalties will be based on the employer’s liability over a period of 12 months:
- For administrative penalties to be imposed the employer should have submitted 1 or 12 EMP201’s. If less than twelve (12) EMP201s were submitted, the system will calculate the average of submitted EMP201s and multiply by twelve to calculate an estimated total aggregate employee liability for the year.
- Where there is no EMP201 with a liability the administrative penalty will be charged retrospectively once either the EMP201 or EMP501 with a liability is submitted.
- If the EMP501 is received at any point during the 10 months after the close of the Filing Season, the 1% incremental administrative penalty will stop to recur.
Administrative penalties will only be charged if a full month has passed without the reconciliation being submitted, e.g. if the reconciliation is submitted during the month of August, administrative penalties will only be levied for June and July and not for August.
Employers must keep former employees’ tax records for at least five years.
Section 29 of the Tax Administration Act, 2011 stipulates that employers must keep the records, books of account and or documents for at least five years following the submission of a tax return or other data to SARS. These records are specifically required to enable SARS to confirm that the employers have complied with the relevant tax obligations.
SARS released system enhancements to improve its efficiency and effectiveness in resolving tax disputes. The most significant system changes include:
- Updating taxpayer contacts: Taxpayers will now be able to amend their contact details for purposes of their tax dispute on eFiling. This will facilitate earlier engagement by SARS and allow taxpayers to include the contact details of their representative chosen for purposes of resolving the tax dispute.
- Request for Remission: The request for remission functionality has been extended to include remission requests for provisional tax underestimation penalties levied in terms of paragraph 20(1) of the Fourth Schedule to the Income Tax Act No. 58 of 1962. This functionality is now aligned to the applicable legislation.
- Request for Reasons: New automated ‘Request for Reasons’ outcome letters have been implemented. Previously if SARS agreed that reasons for the assessment had to be supplied, manual letters were issued.
- Objections: Where SARS requires additional substantiating documents to enable it to consider an objection, it is now able to issue up to three (3) requests to the taxpayer for the supply of the requested documents. This will ensure that the gathering of information relevant to the dispute is done during the objections phase of a tax dispute.
- Calculation of disputed amount: On submission of an appeal, the calculation of the value of the amount disputed will be automated.
- Appeals: Automated letters have been introduced for appeals administration for Alternative Dispute Resolution (ADR). There are notices:
- confirming that an appeal is suitable for ADR
- extending the period of ADR proceedings
- terminating the ADR proceedings and
- confirming the outcome of an appeal.
SARS believes that the enhancements to taxpayer contact details and automated notices will improve communication with taxpayers. Pivotal to the delivery of SARS’ Vision 2024 are our digital platforms & technology infrastructure. These enhancements will aid in providing clarity & certainty and make it easy for taxpayers and traders to comply with their obligations.
Click here to access the Dispute guide.
Preparing for an Appointment with SARS
When you have an appointment with SARS, it is important that the supporting documents for the issue at hand are made available. These can be submitted electronically through the SARS Online Query System.
For more information about the documents required, click on this link : required supporting documents for your specific appointment here.
Services offered by SARS via the SARS MobiApp
One of SARS’ strategic objectives is to modernise our systems to provide digital and streamlined online services. In line with this objective some of the services offered via the SARS MobiApp include:
- Tax Compliance Status Service – You can view your tax compliance status and request your tax compliance status (TCS) PIN
- Profile Management Services – You can view and manage your profile information with SARS.
- Tax Directive Service – This allows you to request a historical IRP3b and IRP3C
- Tax Reference Number Request Service – This enables you to request your tax reference number from SARS.
- Locations of SARS branches and appointment services – You can find the nearest SARS branch and/or book a virtual appointment with a SARS service agent.
- Estate Case Service – A new estate case can be reported to SARS.
- Live Chat – This allows you to chat/text with a SARS service agent via our live chat called Lwazi.
See the enclosed guide for additional information:
IT-AE-49-G01 – Services offered by SARS via the SARS MobiApp – External Guide
Enhancements to the Tax Compliance Status (TCS) Process
The processes governing the Tax Compliance Status have been amended. Click here to read the SARS media statement.
The following tax compliance status types may be applied for:
- Good Standing: This compliance status is issued when a taxpayer wants to confirm that their tax affairs are in order with SARS.
- Approval of International Transfer (AIT) – this functionality allows a taxpayer to apply to transfer funds internationally.
The new process further strengthens the legislative alignment with the SA Reserve Bank (SARB) exchange control changes as it pertains to Emigration. The introduction of a new dynamic application called ‘Approval International Transfer (AIT)’, replaces the existing ‘Emigration’ and ‘Foreign Investment Allowance (FIA)’ application types.
The Tax Compliance Request form (TCR01) has been amended to align to the required changes.
The updated guide contains detailed information including SARS recommendations on how to remedy non-compliance, how to challenge a Tax Compliance Status, and the importance of merging all tax products prior to application for a Tax Compliance Status.
Please access the following education resources: