Welcome to the latest edition of Tax Practitioner Connect, the electronic newsletter for tax practitioners that keeps you up to date with the tax matters that affect you.
SARS appreciates and acknowledges the support from the tax practitioner community in 2019, and hopes that we will continue to work together towards increased compliance and fiscal citizenship in 2020. We wish you and your families a happy, restful and safe festive period.
SARS will enhance the tax type transfer request process on eFiling in future to allow the taxpayer control of their tax affairs. This will give the taxpayer the ability to approve or reject any transfer request from a tax practitioner.
When tax practitioners or eFilers request the transfer of a taxpayer’s income tax product, the taxpayer will be notified of the request through SMS or email. The taxpayer will then need to authorise the transfer. The taxpayer will be required to access the request securely via a One-Time-Pin (OTP) and also access and accept a digital Power of Attorney (POA).
eFilers who do not meet the requirement of being a registered practitioner or representative of the taxpayer will no longer be allowed to request personal income tax products.
SARS will be replacing the Add User process with an Invite User principle. This new principle will require tax practitioners or eFiling administrators to invite users already registered on eFiling to participate in managing a portfolio. The function will require details such as ID or passport number and surname for an existing eFiling user. An SMS or email will be sent to the user invited, informing them of the invitation and actions required. Once the invite is accepted, the user will be able to access the portfolio and transact as usual.
Note: The Invite User function will only be available for individuals already registered for eFiling. If not registered, they will need to register first.
We are expecting to enhance the CIT return and announce legislative and operational changes early in 2020, to meet our mandate to collect all revenues due and ensure compliance with tax and customs legislation. The changes will enhance risk identification and improve taxpayer experience when completing a tax return. Some of these changes include:
- Enhancements to the current Company Income Tax Return (ITR14) and Notice of Assessment for Companies (ITA34C)
- Converting the ITR14 form, from FLEX to HTML5, requiring companies to make use of the new format, once available, to complete their forms
- Legislative and operational changes and more.
Important legislative and operational changes
The following legislative and operational changes, while not comprehensive, are being highlighted as they are of particular importance:
- Doubtful Debts (S11(JA)), S11(J)(I) AND S11(J)(II)
New containers and fields are being introduced to manage the deductions. Different percentages can be allowed for doubtful debt deductions. To determine the percentages that can be allowed, a distinction needs to be made between IFRS® and non-IFRS taxpayers. SARS also needs to determine (in some instances) whether a Tax Directive was issued as proof that SARS approved a higher percentage deduction.
- Country-by-Country Notifications
Separate Country-by-Country notifications are no longer required, as this will be incorporated in the ITR14 return. An additional container in the ITR14 form will be populated serving as a notification to SARS when the new return is released.
- Large Business Definition Alignment
The definition of “Large Business” was slightly amended. Additional questions were added and amendments made to allow SARS to determine which companies meet the criteria.
- Manual Capturing of IRP5 Certificates – Update Validations
Companies will no longer be allowed to manually capture Pay-As-You-Earn (PAYE) credits, but will only be able to submit their ITR14 returns with pre-populated IRP5 information. If additional IRP5 certificates need to be declared, the taxpayer needs to visit a SARS branch to have the additional IRP5 certificates captured.
- Enhance the Company Classification Codes (SIC Codes)
It is important that taxpayers choose the correct codes when completing the SIC codes. The SIC code field will be moved to the “Company/Close Corporation Particulars” section of the return, deleting the duplicate field and changing the label.
- Submission of Farming Schedule
Companies conducting Farming Activities will in future be required to submit a “Farming Schedule” as a supporting document that must be uploaded when filing their ITR14 return. The farming schedule needs to be completed manually and then uploaded.
- Trust Distributions
Currently, it is not possible to see whether distributions received from Trusts are correctly declared in the ITR14 return. The return will be updated to cater for the capturing of Trust distributions received.
During the final quarter of the current financial year, SARS intends to enhance its current functionality by introducing new services to the SARS eFiling and the SARS MobiApp.
The recently introduced Tax Reference Number (TRN) request service that was made available to banking institutions will be extended to other entities that require the service. Banks and other entities will be able to request TRNs (single or bulk requests) for other tax types like CIT, Value-Added Tax (VAT) and Pay-As-You-Earn (PAYE). Currently, this service is only available for income tax reference numbers.
SARS eFiling and the SARS MobiApp will be simplified by including a single “inbox”, where all SARS correspondence can be accessed. The eFiling Correspondence and Inbox will be grouped under “SARS Correspondence”, with a simplified search and filter functionality across all tax types.
Our Chat Bot “Lwazi” will be available on eFiling, once the enhancements have been completed as part of the eFiling Re-design project.
The SARS MobiApp will also allow taxpayers to view their “My Compliance Profiles”, whereas previously this was only available on eFiling. Taxpayers submitting complex returns will now be able to submit their returns using the enhanced MobiApp.
Requestors of tax directives will be able to use the tax directive application on eFiling to submit the IRP3(c), as well as upload supporting documents in respect of the directives IRP3(c), (a), (b), (e) and Recognition of Transfer (ROT). Fund Administrators will also be able to request cancellation of ROT.
Following engagements with tax practitioners, the SARS MobiApp service offerings have been extended to registered tax practitioners as from 11 October 2019. This allows registered tax practitioners the flexibility to transact on behalf of their Personal Income Tax clients from their mobile devices.
This update gives registered practitioners access to the full suite of MobiApp services for their Personal Income Tax clients, with the added benefit of mobile flexibility and simplified design features. The full suite of the SARS MobiApp services includes uploading supporting documents, obtaining a statement of account in a few screen taps and much more.
Please note that these SARS MobiApp features will only be available to registered tax practitioners with full access rights for now, and will not be available to any users with delegated rights.
For more information on the features and benefits, see the SARS MobiApp webpage.
As of 2018, SARS can deregister tax practitioners who are non-compliant in terms of their personal tax affairs, according to section 240 (3)(d) of the Tax Administration Act.
Since the enactment of section 240(3)(d), SARS has embarked on a process of de-registering non-compliant tax practitioners. Our initial focus has been on practitioners who have outstanding returns in their personal capacity. Of the 123 most non-compliant practitioners, 51 have been de-registered as they have failed to heed our request to regularise their personal tax affairs.
Submitted returns are scrutinised for correctness, and where the declarations appear to be incorrect, these cases are referred to Enforcement for further action. It is our intention to continue this initiative until all practitioners have regularised their tax affairs. We also caution practitioners to ensure that their personal tax affairs are in order, or risk being deregistered as tax practitioners.
SARS has also established a Governance Committee for Reporting Unprofessional Conduct in October 2018. This committee evaluates complaints regarding unprofessional conduct lodged against registered tax practitioners, and decides whether to report the matter to the tax practitioner’s Recognised Controlling Body for further investigation and possible disciplinary action. To date, more than 100 cases have been reported to SARS either by other practitioners or by taxpayers themselves.
The bulk of complaints revolved around tax practitioners failing to release the eFiling profiles of their clients. We remind practitioners that it is an offence not to release the eFiling profile of a client, even if they have outstanding fees. All such cases will be referred to the practitioner’s Recognised Controlling Body for further action. Some of the more serious complaints lodged against registered tax practitioners are:
- Verbal and physical abuse of SARS employees
- Submission of fraudulent tax returns
- Giving advice that is contrary to the law and to the disadvantage of taxpayers
- Unreasonably delay the finalisation of any matter before SARS
- Failing to perform the duties of a registered tax practitioner
- Serious personal non-compliance.
We are aware that there are still tax practitioners using the SARS logo as part of their own signature or in their correspondence. We want to caution against the use of the SARS logo, which is a registered trademark in terms of the Trade Marks Act, 1993 under various categories of goods and services, and enjoys statutory protection from any unauthorised use.
In addition, it is an offence to use the SARS logo to represent some association or endorsement from SARS in terms of the newly amended section 30 of the SARS Act. Please use your practitioner registration number, which will identify you as registered with both SARS and a recognised controlling body.