VAT Training for municipalities
As previously stated in the July Government Connect, SARS and the National Treasury have commenced with a VAT training programme for Municipalities. The training is aligned to the Municipal Finance Management Act (MFMA) Circular No 2 which deals with Cost Containment Measures. The first session was held in Limpopo on the following topics:
- Housing programme (Rented housing, Maintenance costs)
- Principle / Agent Considerations (Library services)
- VAT on conditional grants
- VAT treatment on Foreign Donor Funds Projects
- Treatment of Electronic Services
- Completion of VAT returns
- Tax invoices
- Denial of Input Tax
- Municipal Standard Chart of Accounts (mSCOA)
To date, the training has been rolled out to municipalities in Limpopo, Northwest Province, Gauteng and KZN. Training for the municipalities in Eastern Cape, Free State and Northern Cape is scheduled to be completed before the end the 2023 Calendar Year.
These training interventions are aimed at:
- Upskilling the municipal staff that are tasked with the submission of VAT Returns to be self-reliant. This will remove the need to outsource the work.
- Assisting the municipalities to comply with National Treasury’s MFMA circular No.02 relating to the cost containment measures.
Managing the Employer Account
Unallocated Payments
The South African Revenue Service has seen an increase in the amount of unallocated payments on tax accounts, which could be the result of using incorrect Payment Reference Numbers (PRN). It is important that a taxpayer make use of the correct PRN which is generated by eFiling to mitigate payments being incorrectly allocated and the imposing of penalty and interest.
Please refer to the links below on how to make payments to SARS using the correct Payment Reference Number:
Unallocated payments | South African Revenue Service (sars.gov.za)
How do I release payment at my bank? | South African Revenue Service (sars.gov.za)
Guide to the payment advice notice functionality on eFiling
Basic Guide to Section 18A approval
SARS has issued a guide to assist organisations in understanding the basic requirements for obtaining and retaining approval under section 18A. The organisations covered in the guide include:
- Public Benefit Organisation (PBO)
- An institution, board or body
- A conduit PBO,
- Government
- Any agency contemplated in the definition of ‘specialised agency’ in section 1 of the Convention on the Privileges and Immunities of the Specialised Agencies, 1947 and
- Specifically named funds, programmes, High Commissioners, offices, entities or organisations.
The guide is comprehensive and deals with prescribed requirements for Section 18A approved organisations, requirement to obtain audit certificates, how non-compliance is dealt with and requirements for using of donations receipts. The guide can be accessed by clicking here: Basic Guide to Section 18A Approval.
The interpretation note applicable to Public benefit organisations regarding partial taxation can be accessed by clicking here: Interpretation Note 24 (Issue 5)
If a taxpayer incurred interest and penalty on Provisional Tax, a taxpayer is allowed to submit a Request for Remission (RFR) prior to submission of the annual return. In this scenario, the user must click on the ‘Add Dispute Item’ button and select the applicable source code from the list:
- 9995 – Interest (section 89bis) on Provisional Tax
- 9996 – Penalty (paragraph 27(1)) on Provisional Tax
The guide to submit a dispute via eFiling was updated and can be accessed by clicking here: Guide to submit a dispute via eFiling
Implementing two-factor authentication to login on the SARS MobiApp
To mitigate the risks associated with compromised passwords, an additional security layer has been integrated to access the SARS MobiApp. The two-factor authentication (2FA) security system method consists of two distinct forms of identification requirements. SARS MobiApp users or taxpayers can now enable the 2FA method on their eFiling profile. This implies that once implemented, they will be prompted to provide a one-time-pin (OTP) after they have successfully entered their username and password on the SARS MobiApp. Access to their SARS MobiApp profile will only be granted once they have completed the OTP successfully on their smart device.
The following external guide has been updated with this new development: How to register for the use of the SARS MobiApp external guide
Enhancements: Tax Compliance Status
The Tax Compliance Status (TCS) process relating to the approval of international transfer (AIT) applications have been adjusted to address feedback from stakeholders. Below is a summary of the key revisions:
TCS Application Form (TCR01):
- All the fields under the “Foreign Assets and Liabilities Details” container have been made optional based on the date the TCS applicant ceased to be a South African tax resident
- The “Net Worth” field under the “Assets and Liabilities Details” container has been amended to “Net Amount (At cost)”
- The “Trust No.” and “Passport No. of Main Trustee/Representative Taxpayer of the Trust” under the “Local and Foreign Trust Details” container, and the “Local and Foreign Loan to a Trust Details” container have been made optional when “Foreign Trust” is selected
- The “Trust No.” under the “Distribution from Trust Additional Details” container has been made optional when the “Foreign Trust” is selected
- The “Share code” field and “Number of shares sold” field under the “Sale of Shares and Other Securities Details” container have been disabled when the “Listed Shares” is selected.
TCS Verification Letter (TCR006):
The TCR006 letter has been amended to display the residency status under which the application was approved.
TCS Dashboard:
- An “Amount” column has been added to the TCS dashboard to enable the AIT Reviewers and Approvers to view the total value of the international transfer per the TCR01 application (where the application has not yet been approved) or the approved amount per the AIT case.
See the updated guide here: Guide to the Tax Compliance Status functionality on eFiling
Digital fraud reporting now online
If you suspect that your tax profile has been compromised, you can now report it electronically. As part of our ongoing efforts to enhance taxpayer confidence a new feature has been introduced. Simply click here to report the incident and follow the prompts to register your case. This will assist SARS to manage and prioritise your case while making it easier for you to interact with SARS when it comes to digital fraud.
See the updated guide here: SARS Online Query System Guide
