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Independent Software Vendors

What’s new?

  • 28 April 2022 – Legislative changes to the Tax Directives process have been implemented.

    The following information is important for Fund Administrators, Insurers, Tax Practitioners, Advisors and taxpayers.

    • Taxpayers who are members of a pension preservation or provident preservation fund, who have reached retirement age and are 55 years and older are now allowed to transfer the retirement benefit to another preservation fund or a retirement annuity fund tax neutral on a Form A&D – reason Transfer before Retirement [par 2(1)(c)]
    • Taxpayers can now, on retirement, elect to use two thirds (⅔) or more of the total value of the retirement interest in the fund to provide a pension and / or annuity or purchase a living annuity and / or a guaranteed annuity from an Insurer. Alternatively, they can elect to keep a portion of the retirement interest in the fund which will provide a pension and / or annuity and use a portion to purchase a living annuity and / or a guaranteed annuity from an Insurer. However, it is important to note that the condition placed on a purchase of an annuity is that the value of each annuity (living and / or guaranteed and / or remaining in the fund) must be R165 000 and above, respectively. 
    • A new reason has been added on the IRP3a to cater for foreign companies that are not registered for Pay As You Earn to make severance payments to South African tax residents who have performed work within the Republic for the said company. When the employer pays the employee, the tax practitioner or SARS will select reason <Severance benefit – Paid by a non-resident Employer>
      • When the taxpayer/Tax Practitioner completes the return, a new field will be added on the ITR12 to cater for payments made by foreign entities. The taxpayer/Tax practitioner must select <Y>
      • This will open a container whereby <new source code 3925) will be generated to capture the amount of the severance benefit received and the Tax Directive number which would have been issued for this purpose.

    Click here to access the updated guide.

  • 20 April 2022 – Tax Directive Enhancements
    Independent Software Vendors (ISVs) please note the changes stated in the Tax Directives Interface Specification (IBIR-006 Rev 6.303) will go-live on 25 April 2022.  No Directive files should be submitted after 15:00 on 22 April 2022.  Applications can be submitted from 25 April 2022. 

  • 11 March 2022 – Tax Directives: Update on Trade Testing Dates and Software Implementation
    SARS will introduce enhancements to the Tax Directives process as indicated in the IBIR-006 Tax Directives Interface Specification Version 6.303. The trade testing dates are planned for 22 March 2022 – 14 April 2022. This is to prepare for the implementation of the software during the first quarter of the 2022/23 financial year with the changes officially being implemented on 22 April 2022. Please be advised that in the event that these dates change, you will receive communication from SARS.  For more information, click here.

  • 10 February 2022 – Tax Directives: Trade Testing Dates and Software Implementation
    SARS will introduce enhancements to the Tax Directives process as indicated in the IBIR-006 Tax Directives Interface Specification Version 6.303. The trade testing dates are still to be confirmed and the implementation of the software is planned for the first quarter of the 2022/23 financial year (1 March 2022 – 31 May 2022). You will receive communication with regards to the exact dates for trade testing and the implementation date closer to the time. For more information, click here.

  • 18 January 2022 – Tax Deductions (PAYE) on your Pension or Annuity

    To assist pensioners with more than one source of income, recently introduced legislation makes provision for SARS to determine a more accurate PAYE deduction amount. We do this by using the latest data available to SARS.  Your retirement fund administrator will then deduct a more accurate amount of PAYE from your pensions or annuities. It is our intention to introduce this service with effect from 1 March 2022. Your retirement fund administrator is already aware of all the above. For more detail, click here.

  • 6 December 2021 – Tax Directive Enhancements

    Enhancements were implemented to the Tax Directives system in line with the IBIR-006 -Tax Directive Interface Specification:  

    In cases where a pensioner has one source of income during a tax year, our PAYE system typically ensures that the tax due at year-end is sufficiently covered by way of monthly PAYE withholdings. However, where a pensioner is in receipt of more than one source of income, a tax debt may arise at year-end when we combine all the sources of income together for purposes of determining taxable income and tax due.

    While the PAYE system permits a pensioner to request that a higher amount of PAYE be deducted so that any tax due at year-end is adequately covered, not many pensioners are making use of this option, which then leaves them with a tax debt at year-end, which they did not budget for. In turn, this has a significant negative impact on the outstanding debt book of SARS.

    In response to this, recently introduced legislation makes provision for SARS to determine the effective rate of tax in respect of the combined employment and/or pension sources of income of a taxpayer, with reference to the latest data available to SARS, and to provide that rate to the retirement fund administrators for purposes of withholding PAYE.

    It is the intention to introduce this service with effect from 1 March 2022.

    In practice, this will mean the following:

    1. Prior to 1 March 2022, SARS will, where it deems necessary, provide retirement fund administrators with the PAYE withholding percentage for each of the pensioners on its payroll that qualify;

    2. This means that retirement fund administrators will be required to use the rate provided by SARS in respect of remuneration paid or payable with effect from 1 March 2022;

    3. SARS will provide the PAYE withholding rates by way of an electronic file in CSV format. This file will be issued via [email protected]™;

    4. Where a PAYE withholding rate has not been provided by SARS in respect of a particular pensioner, retirement fund administrators must continue to apply the normal PAYE withholding rates;

    5. Where SARS provides a PAYE withholding rate, it will be by way of an annual directive. Where a pensioner’s circumstances change during the year (for example other employment income ceases, or death and so on), the retirement fund administrator may apply the normal PAYE withholding rate as opposed to the withholding rate provide by SARS with effect from the month in which the it becomes aware of the change of circumstances;
    6. Notwithstanding the PAYE withholding rate provided by SARS, a pensioner may at any time, request his or her retirement fund administrator to withhold PAYE at a rate higher than the rate provided by SARS. The Voluntary over deduction indicator in the code 3195 field on the IRP5/IT3(a) certificate must be set to “Y” for yes, if applicable, as per the normal procedure; otherwise it must be “N” for no – this field is mandatory from the 2020 year of assessment. However, all PAYE amounts withheld and paid over to SARS must be declared under code 4102 on the IRP5/IT3(a), including any voluntary over-deducted amounts.

    7. Notwithstanding the PAYE withholding rate provided by SARS, a pensioner may request his or her retirement fund administrator to withhold PAYE at a rate that is equal to the PAYE withholding rate under the normal PAYE withholding tables. In such a case, the retirement fund administrator is required to inform the pensioner of the possibility that the PAYE withholding rate will be insufficient to cover the tax liability of the taxpayer on assessment;

    8. The rates of PAYE withholding provided by SARS apply in respect of the following source codes only:
      a. 3603 – Pension
      b. 3610 – Annuity from a Retirement Annuity Fund
      c. 3611 – Purchased Annuity
      d. 3618 – Annuity from a Provident Fund or a Provident Preservation Fund.

    The following Guides were published in support of the enhancements:

  • 2 December 2021 – Update on Tax Directives Enhancements
    In reference to SARS’ previous communication, at which time you were informed that Tax Directives process as indicated in the IBIR-006 Tax Directives Interface Specification Version 6.203 will be implemented in December 2021 refers.  

    No Directive files should be submitted after 14:00 on 3 December 2021. Applications can be submitted from 6 December 2021.  

  • Update on 11 November 2021 – Implementation of Tax Directive Enhancements
    It has come to our attention that certain information was not clearly explained in the attached letter issued to you last week. Please find the updated letter explaining the information in paragraph 6 more clearly. Our sincere apologies for any inconvenience.

    Recently introduced legislation makes provision for SARS to determine the effective rate of tax in respect of the combined employment and/or pension sources of income of a taxpayer, with reference to the latest data available to SARS, and to provide that rate to the retirement fund administrators for purposes of withholding PAYE.  It is the intention to introduce this service with effect from 1 March 2022.  Click here to read more.

  • 8 November 2021 – Implementation of Tax Directive Enhancements
    Recently introduced legislation makes provision for SARS to determine the effective rate of tax in respect of the combined employment and/or pension sources of income of a taxpayer, with reference to the latest data available to SARS, and to provide that rate to the retirement fund administrators for purposes of withholding PAYE.  It is the intention to introduce this service with effect from 1 March 2022.  See update on 11 November 2021.

  • 27 October 2021 – Updated Interface Specification

    An updated Interface Specification is available, see IBIR-006 Tax Directives Interface Specification Version 6.203.

  • 30 September 2021 – Tax Directives:  Trade Testing Dates and Software Implementation

    SARS will introduce enhancements to the Tax Directives process as indicated in the IBIR-006 Tax Directives Interface Specification Version 6.202. The Trade Testing dates are 25 October 2021 – 22 November 2021 in order to prepare for the go-live date planned for December 2021. The exact date will be communicated closer to the time.  For more information, click here.

  • 26 May 2021 – Tax Directives enhancements have been successfully implemented

    On 23 April 2021, SARS implemented the IBIR-006 revision 6.105 Interface Specifications changes to the Tax Directives.  The Guide to the Tax Directive functionality on eFiling has been updated with the Tax Directive functionality to request previous years’ tax directives. This guide was designed to assist Fund Administrators / Long-term Insurers / Employers / Tax Practitioners and/or Individuals with the Tax Directive administrative functions on eFiling. For more information, see the Guide to the Tax Directive functionality on eFiling.

 

  • 26 April 2021 – Tax Directive changes:

    The Guide on Tax Directive for emigration, cease to be resident and expiry of visas was updated to include the definitions of ‘provident fund’ and ‘provident preservation fund’ were amended for the annuitisation of benefits on retirement. The purpose of this guide is to provide basic information relating to the tax directive applications for emigration withdrawals and withdrawals due to the expiry of a visa. For more information, see the Guide on Tax Directive for emigration, cease to be resident and expiry of visas.

    The Guide to the Tax Directive functionality on eFiling was updated with the Tax Directive functionality to request previous years’ tax directives. This guide is designed to assist Fund Administrators / Long-term Insurers / Employers / Tax Practitioners and/or Individuals with the Tax Directive administrative functions on eFiling. For more information, see the Guide to the Tax Directive functionality on eFiling.

    The completion guide for IRP3(a) & IRP3(s) forms was updated with the Arbitration / CCMA Award filed and the ‘Year of assessment’ on directive and tax certificate was clarified. The purpose of this guide is to assist employers with the completion of a Tax Directive Application form to obtain a Tax Directive (IRP3) before a lump sum can be paid to an employee. In addition, the Guide to complete the tax directive application forms was updated with the Provident and Provident Preservation funds compulsory annuitisation and with the following new reasons on the tax directive application forms:

    • Par (eA) Living Annuity Commutation Termination of a Trust (Form E);
    • Cessation of SA Residence (Form B and Form C)
    • Unclaimed death benefits (Form A&D)

    The purpose of this guide is to assist Fund Administrators / Long-term Insurers and / or employers on how to complete all of the various tax directive application forms in order to obtain a tax directive (IRP3) before a lump sum benefit can be paid to a member. For more information, see the Completion guide for IRP3(a) & IRP3(s) forms.

What are ISV’s or Interface agents?

The ISV’s software interfaces with SARS for the submission of various returns required by SARS. The ISV service was initiated as an extension of the eFiling service. The software vendors approached SARS to integrate with the eFiling service that would reduce user effort and manage the process of completing tax returns.   The tax types serviced through the ISV service include:

  • Annual Returns :
    • ITR12
    • ITR14
    • IRP6
    • ITR12T
  • PAYE returns
  • Transfer Duty
  • Tax Directives (Tax Directive submissions have been allowed for a number of years via an interface that allows for the bulk request of directives)

See the letter on the ISV Tax Directives file submission migration to the new SFTP solution.

How does it work?

Secure access is enabled by a unique access key for the specific product and application. After user authentication is done, the interface interaction is allowed. The user is required to be an active user on eFiling with the appropriate rights.   Currently we have three categories of ISV’s:

  • Tax Returns Submissions
  • Transfer Duty
  • Directive Requests

Need Help?

You may forward the signed Terms and Conditions on email to [email protected]. It applies only to ISV’s requested authorisation for their systems to interface with SARS Systems.

For Tax Directives applications the existing process will continue whereby the interface specification and External Application for Access to SARS – Electronic Interface under “Form INF001” to register for access to SARS Interface are available in the Interface Specification IBIR-006 Tax Directives. Please note that the Terms and Conditions are also applicable to Tax Directive applications.

New Independent Software Vendor(ISV) systems Interface Terms and Conditions

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