Tax Practitioner Connect Issue 51 (April 2024)

Employees’ Tax Compliance Starts with You

The Employer Annual Declaration period opened on 1 April and will close on 31 May 2024. During this period, employers must submit their annual reconciliation declarations (EMP501) with accurate and up-to-date payroll information about their employees. The EMP501 must include:

Monthly employer declarations (EMP201) for Pay As You Earn (PAYE), Unemployment Insurance Fund (UIF) contributions, and the Skills Development Levy (SDL);
Information relating to payments made (excluding penalties and interest paid); and
Employee tax certificates (IRP5/IT3[a] generated) covering the tax year from 1 March 2023 to 29 February 2024.

For more information, see the PAYE landing page.

Third-party Data Annual Submission

This is a reminder that the SARS Third-party Data Annual Submissions opened on 1 April 2024 and will close on 31 May 2024. Third parties must submit accurate and complete data for the entire period of 1 March 2023 to 29 February 2024. Third parties (banks, medical schemes and fund administrators, among others) must, by law, send data to SARS via a return. They must include information such as:

Savings account interest;
Medical scheme contributions;
Withholding tax on interest;
Dividends Tax;
IT3 data submissions: IT3(b), IT3(c), IT3(e), IT3(s); and
Medical scheme contributions, and insurance payments.

Third-party data providers can submit data to SARS using these three electronic options:

eFiling (via a data submission form with a limited volume);
Connect: Direct® (Unlimited); or
Secured File Gateway [HTTPS] (for files smaller than 10MB).

To ensure a successful submission and to use and activate these channels, third parties must be registered with eFiling.

For more information, see the Third Party Data submission landing page.

Advancement in requesting the SARS certificate for Third-party Data Submission

As part of the Third-party Data Submission process, third-party entities are given a SARS security certificate, which forms part of their enrolment and activation process, annually upon request. The SARS security certificate allows SARS to validate and process high-volume data files received from third-party entities during their data file submissions via Connect: Direct™ technology (CD) and Secure Web: https (SFG).

However, since SARS no longer supports browsers that were identified as posing a security risk, this made it difficult for many third-party entities to request and renew their security certificates. Additionally, this was disadvantageous to the Third-party Data Submission process as new entities could not easily enrol and renew expired certificates. To address this, a solution was developed to enable third-party entities to enrol and activate their preferred channels of submission via eFiling. Following the completion of the enrolment and activation, a security certificate that contains information about the certificate’s owner, as well as public and private keys will be issued. Only then will third-party entities be allowed to send their data files to SARS via CD and SFG.

Any queries relating to the Third-party Data Submission process should be referred to the third-party data unit via the following email address: [email protected].

The following guides relating to Third-party Data Submission have been updated and are available on the SARS website:

Enhancement of SARS Online Query System

The following changes have been made:

The ‘Submit supporting documents’ and ‘Report new estate case’ queries have been updated in line with the latest system enhancements.
The following new queries have been included in the guide:
- Request for Auto Assessment status: This enables the taxpayers to query whether they are part of the SARS Auto Assessment population or not.
- Submit a Large Business and International (LBI) query: This enables the taxpayers registered at the LBI or High Net Worth (HNW) to direct their queries to LBI or HNW.

If you need help, see the Guide to the SARS Online Query System.

Important information for SMMEs

The 7th edition of the SMME Connect comes as most companies have just finalised and submitted their Company Income Tax Returns and their second-period Provisional Returns. Companies that have missed the deadline are reminded that they can still complete and submit their returns. Late submission and non-submission of returns will result in SARS imposing administrative penalties. This issue offers simple guides to help you meet your tax obligations. If you have a company registered with the Companies Intellectual Properties Commission (CIPC), the newsletter provides information on how to file your annual returns.

Companies and close corporations are legislatively required to file their annual returns with the CIPC each year within 30 business days after the anniversary date of the business’s incorporation.

Annual returns enable the CIPC to confirm that a registered business is still in business, trading, or if it will be in business soon. If the CIPC receives no annual return on time, it will assume that the business is inactive and begin to deregister the company. If a company or close corporation is not registered with the CIPC, it cannot be recognised as a legal entity.

Deregistration of tax practitioners

SARS would like to remind tax practitioners of the following (Pitfalls of deregistration due to non-compliance), which appeared in the Tax Practitioner Connect Newsletter of October 2021.

SARS may deregister a registered tax practitioner in terms of any of the following sections of the Tax Administration Act, 2011 (Act 28 of 2011) (the Act), if a tax practitioner:

Was removed from a related profession by a controlling body for serious misconduct during the preceding five years in terms of section 240(3)(a) of the Act;
Was convicted (in South Africa or elsewhere) during the preceding five years of:
- theft, fraud, forgery or uttering a forged document, perjury or an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act 12 of 2004); or
- any offence involving dishonesty for which the practitioner was sentenced to a period of imprisonment exceeding two years without the option of a fine or to a fine exceeding the amount prescribed in the Adjustment of Fines Act, 1991 (Act 101 of 1991) in terms of section 240(3)(b) of the Act;
During the preceding five years has been convicted of a serious tax offence in terms of section 240(3)(c) of the Act; or
During the preceding 12 months has, for an aggregate period of at least six months, not been tax compliant to the extent referred to in terms of section 256 (3) and has failed to:
- demonstrate that he or she has been compliant for that period; or
- remedy the noncompliance within the period specified in a notice by SARS in terms of section 240(3)(d) of the Act.

The “period specified by SARS” is 21 business days.

Consequences of deregistration

A tax practitioner who has been deregistered in terms of section 240(3)(a) to (c) may only register as a tax practitioner again after five years. A tax practitioner who has been deregistered in terms of section 240(3)(d) can only register as a tax practitioner again once they have demonstrated at least six months’ compliance in the preceding 12 months.

Outsourcing of Debt Collections

SARS has appointed Third-party External Debt Collectors (EDC) according to the advertised tender (RFP 45/2021) to help collect long-outstanding debt owed by taxpayers. Taxpayers who are liable to have their debt collected through EDCs are those whom SARS has contacted or sent letters of demand outlining debt resolution options, but who have failed to settle their accounts or formalise payment arrangements. Affected taxpayers will receive a handover notification from SARS. Please click here to view. These EDCs will assist with the resolution and payment of overdue accounts. Please click here to view frequently asked questions for further guidance. Below is the list of the authorised EDCs:

Blake & Associates (Pty) Ltd
CSS Credit Solutions Services (Pty)
DealFlow Revenue Collection (Pty) Ltd
Debt-In Consultants (Pty) Ltd
Dredin Consulting (Pty) Ltd
IDP Tracing Services T/A TraceOnline
Medaco Revenue Solutions Pty Ltd
Morkalio Revenue Solutions Pty Ltd
Mkhabela Huntley Attorneys JV Norton Lambrionos (SA) Inc
New Integrated Credit Solutions (Pty) Ltd (NICS)
NFD Consulting (Pty) Ltd
Nimble Collection Services (Pty) Ltd
Nudebt Management (Pty) Ltd
Phakamani-Peers
Revenue Consulting (Pty) Ltd
Saya Recoveries (Pty) Ltd
Nutun Business Services South Africa (Pty) Ltd
Tshiqi Zebedelia Inc TZ Attorney
Van Rhyns Attorneys
Montsonyana Institute of Human Excellence (Pty) Ltd
MT Mtimandze Project and Consulting (Pty) Ltd