Employer Interim Reconciliation Declarations
Employers have until 31 October 2022 to submit their Interim Reconciliation Declaration (EMP501) to SARS, using SARS eFiling or SARS e@syFile™. During this period, employers are required to reconcile their (PAYE, SDL, and UIF) declared on their monthly Employer Declarations (EMP201) for the first six months of a tax year (1 March 2022 to 31 August 2022). The tax values of the interim IRP5/IT3(a)s certificates generated, accurate payroll information, and employees’ tax (PAYE) payments made, should make up the Employer’s Reconciliation Declaration (EMP501) that should be submitted to SARS.
Employers with 50 or fewer employees can file a reconciliation that contains a maximum of 50 IRP5/IT3(a) certificates (tax certificates) electronically via eFiling. By logging into SARS eFiling and clicking on the “EMP501” work page, the employer will be able to complete the Tax Certificates and the EMP501 reconciliation, and the payroll system will generate a tax certificate file, which will then be imported into eFiling. Employers with more than 50 employees should use SARS e@syFileTM to submit the reconciliation and generate certificates.
Did you know that the employer of a deceased employee also has a tax obligation in respect of the deceased employee?
When an employee passes away, the employer is required to deliver an employee’s tax certificate within 14 days of the date on which employment ceased, to the deceased employee’s representative (executor). This is according to Paragraph 13(2)(b) of the Fourth Schedule to the Income Tax Act.
An employer must not wait for the Employer Reconciliation period to issue the deceased employee’s tax certificate regardless of whether or not the Employer Reconciliation (EMP501) has been submitted to SARS.
This will enable the executor, as the representative taxpayer, to manage the tax affairs of the deceased employee efficiently and without any delays.
What’s New
Enhancements to the Tax Directive Process
On 10 October this year, SARS enhanced the Tax Directive Process by validating specific data captured on the tax directive application form against the information held by the Financial Sector Conduct Authority (FSCA). The changes will only impact the back-end processes of SARS; there will be no changes made to the IBIR-006 Tax Directives Interface Specification.
The following data will be validated against the funds’ information as registered with the FSCA:
- The registered fund name;
- Participating employer name; and
- FSCA registration numbers
Data captured on the tax directive application must correspond with the registration data of the FSCA. Incorrect data or omitted data will result in the tax directive applications being declined.
A new reason has been added on the IRP3a to cater for foreign companies that are not registered for Pay As You Earn (PAYE) and who make severance payments to South African tax residents who have performed work within the Republic for the said company. When the foreign company (employer) pays the South African resident (employee), the tax practitioner will select the reason Severance benefit – Paid by a non-resident employer. When the South African resident completes the return, a new field will be added on the ITR12 to cater for payments made by foreign companies’ tax practitioners who have challenges due to spelling errors of your client’s names on the FSCA website that is not aligned with your client’s FSCA registration letter. In such cases you can request correction of the spelling error by contacting Jodine Scholts at [email protected] at the FSCA. Please note that this email address is only for the correction of spelling errors of names.
All other issues relating to the FSCA must be directly addressed with the FSCA via the existing channels available to the funds and fund administrators.
Ensure that you are using the name exactly as it is listed on the FSCA website until the changes on the name have been effected to avoid a rejection of the directive application.
Webinars
Webinar on allowable medical expenses
SARS recently hosted a webinar on allowable medical expenses. The webinar was to clarify the Additional Medical and Disability Expenses Tax Credit as it relates to out-of-pocket expenses for:
- medical/physical impairment expenses incurred and paid; and
- disability expenses incurred and paid.
If you were not able to attend, or would like to get details of the content covered, you can access the webinar by clicking on https://youtu.be/YAAPPDqXb5s
Webinar on home office expenses
SARS hosted a webinar on Home Office Expenses to provide clarity on the tax treatment of Home Office Expenses. The Webinar recording is available on the SARS YouTube channel: The SARS Home Office Tax Requirements Event – YouTube. The presentation discussed during the webinar is also available here for viewing or downloading. The key questions asked during the webinar are published here.
Webinar on tax practitioners who are registered representatives
The SARS webinar on the activation of a tax practitioner as a registered representative (RR) for individuals is comprehensive and covers the definition and eligibility of tax practitioners to be RRs and the SARS processes to register as an RR.
Tax practitioners are allowed to apply to be an RR only if he/she is:
- An executor acting on behalf of a deceased estate or insolvent estate
- A parent acting on behalf of a minor
- An appointed administrator acting on behalf of a legal incapacitated individual, or
- An appointed administrator acting on behalf of an individual in extended absence (imprisoned or overseas)
To access the SARS RR webinar click here: https://youtu.be/TcWyWYVOhOU
Webinar on completion of VAT Return (VAT 201) for SMMEs
SARS hosted a webinar to assist SMMEs to fully understand and comply with their tax obligations. If you missed the webinar or want to use it for reference purposes, it can be accessed on https://youtu.be/pJo_W9JNhDk .
Webinar on Employer Interim Reconciliation Declarations
SARS hosted a webinar to assist employers with their Interim Reconciliation Declarations to fully understand their tax obligations. If you missed the webinar or want to use it for reference purposes, it can be accessed on https://youtu.be/T8WIzv3cCg8.
