In this month’s edition of Tax Practitioner Connect, we share information on various tax matters that may be relevant to you, including the criteria for extension of the period for lodging and objection or appeal; the two-pot retirement system that came into effect on 1 September; verification turn-around times and the prescribed limit for retirement contributions within a 12-month period.
Interpretation Note 15 (IN15) — Exercise of Discretion to Extend the Period to Lodge an Objection or Appeal
SARS issued IN15 on 30 August 2024. This important publication explains the aspects that a senior SARS official will take into account when deciding to extend the period for lodging an objection or an appeal. An objection can be submitted within 80 days after the date of an assessment or a SARS decision. Under section 104(4) of the Tax Administration Act, a SARS official can extend the period for lodging an objection. IN15 helps taxpayers who want to ask for extension to lodge an objection to SARS. Click here for the interpretation note.
Two-pot Retirement and Tax
What does the two-pot retirement system mean for your tax? Watch SARS’s tutorial YouTube videos (@sarstax on YouTube) and read our updated guides: https://www.sars.gov.za/latest-news/tax-directives-enhancements-and-tax-implications-of-the-two-pot-retirement-system/.
SARS Turnaround Times for Verifications
If your tax assessment was not selected for verification, you can expect a refund (if due) within three days. SARS can choose to review and verify a taxpayer’s return. When this happens, SARS will send you a letter on eFiling asking you to submit all supporting documentation for your tax return. Verification is normally concluded within 21 business days from the date all required supporting documents are received. Once SARS completes the verification, you will receive a completion notification and can expect the refund within three days.
Retirement Contributions
Section 11F(2)(a) of the Income Tax Act was amended with effect from 1 March 2024. If a person’s year of assessment is shorter than 12 months, the maximum deduction for a retirement-fund contribution cannot be more than the prescribed limit (currently R350 000). This limit applies for the year of assessment within the 12-month period from 1 March of that calendar year to the last day of February in the following year. See page 97 of the Comprehensive guide to the ITR12 Income Tax Return for Individuals for details.
Legal Counsel — Preparation of Legislation — Draft Documents for Public Comment
SARS issued the Draft Interpretation Note for comment. It deals with the meaning of “reserve fund” under section 23(e). The due date for comment is 30 September 2024.
SARS Online Query System (SOQS)
Additional functionality has been added to SOQS. You can now register for Income Tax on SOQS and use the Two-pot Retirement System Calculator.
