Have your employees received a Personal Income Tax Administrative Penalty notification?
If any of your employees have received a Personal Income Tax Administrative Penalty notification, please note that this was issued due to the late or non-submission of one or more Income Tax Returns.
To remedy this, please request them to submit outstanding returns as soon as possible. Failure to do so will result in a monthly recurring administrative penalty being levied until the non-compliance is remedied. For more information, employees can visit the Admin Penalty webpage or log on to their eFiling profile to view their personalised administrative penalty notice. Outstanding returns can be submitted via eFiling, the SARS MobiApp, or by booking an appointment with a branch agent.
The latest scam appears to be a SMS from SARS, indicating a payment is to be received from SARS via PayFast. Please don’t click on any links and report any suspicious correspondence from SARS to [email protected]. See an example of the PayFast scam here.
Webinar for taxpayers in the arts, entertainment and sports sector
SARS recently held a webinar for taxpayers in the arts, entertainment and sports sector. This would be of interest if a government institution is dealing with such taxpayers, who need to understand their tax matters. It would also be of interest to staff in the procurement environment who are making use of the services of such taxpayers for the purposes of the government institution. The video recording can be accessed at the following YouTube link: https://youtu.be/JYAlMrmN7lE.
Attribution of nett income to a public benefit organisation
The Binding Private Ruling 87 determines the tax consequences of a public benefit organisation holding a participatory interest in a controlled foreign company, which is a foreign incorporated charity. The ruling can be accessed by clicking on the link: Binding Private Ruling 387 – Attribution of nett income to a public benefit organisation
Latest SMME Connect Newsletter is available
The December 2022 issue of the SMME Connect is now available and contains useful information for SMME taxpayers. The latest edition contains information on the risks of using non-registered individuals who practice as tax practitioners, VAT obligations for SMMEs, tax compliance status verification and information on corporate income tax. The newsletter contains useful information that can be made available to SMME taxpayers that a government institution may be engaging to obtains goods and services.
VAT Connect Newsletter
The December issue of the VAT Connect newsletter is now available.
Input tax on motor cars
Whether input tax can be deducted on the acquisition of a motor car remains a recurring question that SARS receives. Interpretation Note 82 “Input Tax on Motor Cars” was published to provide guidance on this matter.
There has been an influx of requests for the Commissioner to exercise a discretion to override the prohibition of input tax on the acquisition of a motor car in certain situations. The Commissioner does not have any discretion in this regard under the VAT Act. Generally, a vendor is not entitled to deduct input tax on the acquisition of a motor car, irrespective of the purpose for which the motor car is acquired. To determine whether input tax can be claimed, a vendor must first establish whether the vehicle is a “motor car” as defined.
Interpretation Note 82 sets out in detail how the test works for determining whether or not a vehicle is constructed mainly for the conveyance of passengers. The outcome of the test is a question of fact and where uncertainty exists, an objective test must be applied. (That is, to determine whether the vehicle is intended mainly (more than 50%) for the carriage of passengers.)
If the vehicle concerned qualifies as a “motor car” as defined, the input tax will be denied unless the vendor is a motor car dealer or car rental enterprise as provided in the exceptions in section 17(2)(c). Vendors should therefore not request a ruling from the Commissioner to exercise a discretion in this regard to make exceptions based on the circumstances of the vendor, as the VAT Act does not confer any such discretion upon the Commissioner to deviate from the law.
The following documents affecting VAT have been published on the SARS website (Refer to the “Legal Counsel” page).
Binding General Rulings (BGRs)
- Draft Binding General Ruling – VAT treatment of rounding difference in cash transactions – issued 31 October 2022 for public comment. The due date for comments closed on 2 December 2022. This binding general speaks about debit and credit notes and may contain information relevant to local government institutions.
Interpretation Notes (INs)
- Draft Interpretation Note – The value-added tax treatment of debt collection– published for public comment on 9 September 2022. The date for comments closed on 7 October 2022. This interpretation note discusses the treatment of VAT on the services rendered on debt collection by a debt collector and may be applicable in instances where external suppliers are appointed to collect outstanding amounts.
- VAT Reference Guide for Foreign Donor Funded Projects – issued 25 August 2022
- VAT Quick Reference Guide for Non-executive Directors (Issue 3) – issued on 17 October 2022
- Frequently Asked Questions on BGRs 40 and 41: Non-Executive Directors (VAT and PAYE) (Issue 2) – issued on 17 October 2022.