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Welcome to the latest edition of the Tax Practitioner’s Connect, the electronic newsletter for tax practitioners that keeps you up to date with the tax matters that affect you.
To read our newsletter below, click on each heading to expand the corresponding article.
Legislative changes for Collective Investment Schemes (CIS) and Value-Added Tax (VAT) which were recently introduced and from 9 October 2015 accommodated in our systems, will improve the registration process and ease the administrative burden on taxpayers.
The legislative changes and a new, more inclusive list of Nature of Entities (NOE) are included on both eFiling and the Registration, Amendments and Verification (RAV01) form. The following changes were introduced:
The Registration, Amendments and Verification (RAV01) form
The RAV01 form has been updated to reflect a more comprehensive list of Nature of Entities (NOE).
- Registration of funds such as provident, retirement and annuity funds are now a separate NOE option “Funds” on the revised RAV01 form
- The “Partnership” and “Body of Persons” NOE have been separated to enable the application of different rules to their entity types
- The word “Institution” was added to the “Government/Public/State Owned Entity” NOE and going forward will read “Public/State Owned/Government Institution”, to ensure a comprehensive description of the NOE
Collective Investment Schemes
- CIS entities will be able to register as either a trust or a company for income tax purposes
- CIS in securities will be allowed to select any preferred month as their financial year end and will no longer be restricted to using February as was previously the case
- Amended registration rules will allow CIS entities in property or outside South Africa to register companies for income tax purposes and to get a company registration number.
Voluntary VAT Registration
The recently introduced VAT Regulations make provision for the registration of vendors who have not yet made taxable supplies exceeding R50 000 per year. The newly implemented system changes facilitate the proper processing of voluntary VAT registration applications for vendors who have not yet made taxable supplies exceeding R50 000 but expect to reach this target within the 12 month period starting from the date of registration.
Reclassification of Category F Vendors
From 1 July 2015, the “Category F” tax period (being periods of four months ending June, October and February) was deleted. In light of this change, SARS has changed existing “Category F” vendors to “Category B” vendors.
The first “Category B” tax period was for the months of July and August 2015 (VAT return and payment was due in September 2015). Going forward, tax periods will be periods of two months ending in October, December, February, April, June and August. Should a vendor wish to change the tax period category from “Category “B” to any other applicable tax period they may do so by submitting a written request to the nearest SARS branch.
During the 2014 tax year, SARS introduced a modernised Income Tax Return for Trusts. The ITR12T is now an interactive return that allows navigation from different menu items. The contents of the return are fully customisable as it is based on answers to specific questions provided by either the taxpayer or tax practitioner completing the ITR12T. For the 2015 tax year, SARS made the following enhancements to the ITR12T which were implemented on 12 October 2015:
- Legislative changes as per the 2015/2016 Budget speech have been implemented. In 2014 most of the fields that were added to the modernised ITR12T were optional for completion. From the 2015 tax year, these fields will become mandatory for completion
- Where applicable, auto-calculations have been added to the return
- In 2014, only the details of beneficiaries who transacted with the trust were mandatory for completion. From the 2015 tax year the details of all persons (individuals/company/trust) that transacted with the trust will be mandatory
- Full details of all parties contributing funds, assets, etc. into the trust will need to be provided as well as details of the actual transactions made
- Full details of any party benefitting in any way from the trust as well as details of the benefits received or enjoyed will need to be provided for every beneficiary.
What this means
- These changes will ensure that accurate and complete information is submitted to SARS which then enables SARS to issue the trust with a correct tax assessment
- If 50 or less persons transacted with the trust, the details of every person and the related transactions must be provided
- If more than 50 persons transacted with the trust, then the consolidated details of all the transactions must be provided as well as the details of every person where the aggregate of the transactions were in excess of R500 000 (limited to the top 50 persons based on aggregated transactional value)
- Provision has been made for disclosure of taxable income received from a Real Estate Investment Trust (REIT) as per section 25BB of the Income Tax Act
- Provision has been made for separate disclosure of donations allowable as a tax deduction in terms of section 18A to an approved Public Benefit Organisation
- Provision has been made for disclosure of the allowable tax deduction in respect of expenditure incurred in exchange for venture capital company shares deduction in terms of section 12J of the Income Tax Act. Provision has also been made for the taxpayer to declare a recoupment of these shares within a five year period which is taxable income in terms of section 12 J of the Income Tax Act
- Additional fields that were added to the ITR12T during the 2014 tax year are now mandatory for completion. This means that the details of all income fields as well as the statement of assets and liabilities are now mandatory for completion.
Supporting documents and additional information
When completing the Income Tax Return for Trusts (ITR12T) you need to have the following supporting documents on hand if you are eFiling or with you if you are filing at a SARS branch:
- Financial statements and/or administration deductions
- All certificates and documents relating to income and deductions
- Proof in relation to any tax credits claimed
- Particulars of assets and liabilities.
All supporting documents need to be kept for five years as SARS may request the documents if verification is required.
The Newcastle branch opened on 19 October 2015 offering services to taxpayers in the surrounding areas in Kwazulu-Natal.
The Newcastle area is ranked as South Africa’s tenth-largest city, and is the third-largest city in KwaZulu-Natal. The opening of the Newcastle branch is part of our Branch Footprint Expansion programme which aims to strengthen and expand delivery to taxpayers. The programme was initiated in 2009 seeing various new offices opening including the branch in Orlando East, Soweto.
The Newcastle branch offers all taxpayer services (general tax queries, tax clearances, registration (VAT, PAYE, Income Tax) and completion and submission of returns. The branch comprises 31 staff, and will serve a population of 363,236 citizens (2011 Census). This new addition brings the number of taxpayer service branches to 53 nationwide.
The branch is situated in the Victorian Mall, Scott Street, Newcastle and will be open from 08.00 to 16.00 on every weekday except Wednesdays when it will be open from 09.00 to 16.00
Tax practitioners are reminded that we have service channels specifically designed to provide tailor-made responses to your queries ensuring that service is delivered speedily and efficiently. These include:
- Tax Practitioner Contact Centre
- Dedicated staff in branches to service tax practitioners
- Practitioner Contact Centre email address
- eFiling
- SARS drop boxes in branches
To assist practitioners to make the best use of the various service channels, the Review of Service Offerings per Service Channel provides a detailed breakdown of the various service offerings. Tax practitioners are however encouraged to make eFiling there preferred option where possible. eFiling is available 24/7 and doesn’t require queuing.
Local tax practitioner units offer a specific set of services based on the following guiding principles:
- The tax query has to be of complex nature
- If a query can be resolved electronically it will not be handled by tax practitioner staff.
Based on these principles local tax practitioner units offer the following suite of services:
- Tax registration – All first time registrations can only be done by the tax practitioner in the presence of taxpayer/ director/ trustee, etc. However, if the entity is already registered for Income Tax, Value-Added Tax (VAT) and Pay-As-You-Earn (PAYE) registrations can take place via eFiling
- Bank detail changes/ verification – these can only be done by the designated tax practitioner and cannot be delegated to another staff member
- Merging of profiles for Single Registration – this should first be done on eFiling
- VAT Registration interview
- All applications must be captured on efiling by the taxpayer / tax practitioner
- Tax directives for commission agents
- Tax Clearance Certificate queries
- All applications should be done on eFiling
- Account queries (no print-outs especially those that can be accessed via eFiling).
- Tax assessment queries
- Upload of documents which are larger than the maximum size allowed by eFiling
When making an appointment with the tax practitioners unit keep the following in mind:
- The necessary Power of Attorney (POA) should be presented when attending the appointment
- Tax practitioner numbers need to be provided when making appointments
- Appointments will only be scheduled for sessions of 30 min each
- Standing appointments will not be allowed
- Appointments will only be scheduled where valid tax numbers are provided and specific queries are dealt with pertaining to such taxpayer
- Appointments need to be cancelled at least 24 hours in advance
- Appointments not honoured would result in future access to the service being limited / restricted
Tax practitioners are reminded that they are required by law to provide their clients with access to their own (the client’s) individual eFiling profiles, and further not to withhold a client’s eFiling profile from being transferred to their newly appointed tax practitioner.
Tax practitioner registration and conduct are regulated both in terms of the Tax Administration Act as well as the Code of Conduct of the Recognised Controlling Body of which there they are members. As such, preventing a client from gaining access to his/her eFiling profile or withholding the transfer of their eFiling profiles, may constitute a criminal offence in terms of section 234 of the Tax Administration Act. It is also a basis for the lodging of a compliant by SARS or the taxpayer to the relevant controlling body under section 241 of the Tax Administration Act.
We therefore require you to assist your clients and ex-clients where appropriate to honour their obligations to SARS and to exercise their mandate in terms of the services you provide.
Non-provisional taxpayers have until 27 November 2015 to submit their Income Tax Returns (ITR12) to SARS.
The 2015 Tax Season for Individuals requiring individual taxpayers to submit Income Tax Returns (ITR12) to SARS opened on 1 July 2015. Non-provisional taxpayers submitting electronically at either a SARS branch or submitting on eFiling can submit their returns until 27 November 2015. Provisional taxpayers who submit via eFiling have until 29 January 2015 to submit their returns.
We advise tax practitioners to submit their client’s returns without delay to avoid missing the deadline and incurring penalties.
