What’s New at SARS

18 July 2024 – As part of our commitment to provide taxpayers and traders with clarity and certainty and making it easy for them to comply with and fulfil their tax obligations, we are bringing you a monthly digital column, see the Monthly Tax Digest – July 2024 issue.

18 July 2024 – Customs and Excise Act, 1964: The tariff amendments notices, scheduled for publication in the Government Gazette, relate to the amendments to –

• Part 1 of Schedule No. 1, by the substitution of tariff subheadings 1001.91 and 1001.99 as well as 1101.00.10, 1101.00.20, 1101.00.30 and 1101.00.90, to increase the rate of customs duty on wheat and wheaten flour from free  of duty to 17,63c/kg and 26,45c/kg to respectively, in terms of the existing variable tariff formula (ITAC Minute M02/2024);
• Part 1 of Schedule No. 1, by the substitution of tariff subheadings 1701.12, 1701.13, 1701.14, 1701.91, and 1701.99, to reduce the rate of customs duty on sugar from 140.91c/kg  to 109.36c/kg in terms of the existing variable tariff formula (ITAC Minute 01/2024); and
• Part 1 of Schedule No. 1 by the substitution of tariff subheadings 8507.10.91 and 8507.10.99 in order to increase the rate of customs duty on lead acid batteries from 15% to 30% (ITAC Report 702).

Publication details will be made available later

18 July 2024 – The North West tax workshop schedules for August 2024 are now available.

18 July 2024 – Updated Free State and Northern Cape Tax Unit schedules for July to November 2024 are now available.

17 July 2024 – Further to our update on 19 and 27 June 2024, aligned now with information in terms of s11F(2)(a) Act V1.0 and added examples for additional clarity:

• DEDUCTION IN RESPECT OF CONTRIBUTIONS TO RETIREMENT FUNDS

With effect from 1 March 2024, section 11F(2)(a) of the Income Tax Act No 58 of 1962 was amended as follows: where any person’s year of assessment is less than 12 months, the aggregate of the deduction to be allowed under section 11F for years of assessment during the period of 12 months commencing on 1 March and ending at the end of February of the immediately following calendar year, must not exceed R350 000.

Example: Taxpayer A ceased residency 31/07/2024

Year of assessment 1 i.e. 01/03/2024 to 31/07/2024:

The allowable retirement fund deduction is R200 000.

Year of assessment 2 i.e. 01/08/2024 to 28/02/2025:

The allowable retirement fund deduction is R150 000 (i.e. R350 000 less R200 000 (deduction allowed in year of assessment 1) and any amount contributed in excess of the limit will be carried over to 2026 year of assessment.

• EXEMPTION OF AMOUNTS RECEIVED OR ACCRUED IN RESPECT OF TAX-FREE INVESTMENTS

With effect from 1 March 2024, section 12T(4)(a) of the Income Tax Act was amended as follows: Where any person’s year of assessment is less than 12 months, the contribution limitation stipulated in section 12T(4)(a) of the Act (currently R36 000), shall be adjusted. The adjusted contribution limitation will apply in aggregate for any year or years of assessment during the 12-month period commencing in March and ending at the end of February of the immediately following calendar year.

Example: Taxpayer A ceased residency 31/07/2024 

Year of assessment 1 i.e. 01/03/2024 to 31/07/2024:

Taxpayer contributed to a tax-free investment of R20 000, no penalty will apply.

Year of assessment 2 i.e. 01/08/2024 to 28/02/2025:

Taxpayer contributed R30 000 in addition to the R20 000 contributed in year of assessment 1. The 40% penalty will be calculated as follows:

R20 000 contributed in year of assessment 1 plus R30 000 contributed in year of assessment 2 equals R50 000 contributed for the 12-month period, less R36 000 limit for that 12-month period equals R14 000 contributed in excess of the annual limit. A penalty of R5 600 will be imposed, which is 40% on the excess contribution of R14 000.

• DEDUCTIONS IN RESPECT OF ERECTION OR IMPROVEMENT OF BUILDINGS IN URBAN DEVELOPMENT ZONES

Section 13quat of the Income Tax Act, was amended by substituting the following paragraph in subsection (5) for paragraph (c): ‘‘(c) which is brought into use by the taxpayer after 31 March 2025.’’

Therefore, the Income Tax Return (ITR12) form will be amended to extend the allowable deduction until 31 March 2025.

• SOLAR ENERGY TAX CREDIT

To encourage individuals to invest in clean electricity-generation capacity, the solar energy tax credit was available for one year. It applied to new and unused solar PV panels that were acquired by the individual and brought into use for the first time from 1 March 2023 to 29 February 2024.

The amount of the solar energy tax credit allowed as a deduction to an individual under section 6C was 25% of the cost of the solar PV panels described above, up to a maximum of R15 000.

It should be noted that a deceased estate does not qualify for the solar energy tax credit.

• REDESIGNED DEDUCTION IN RESPECT OF CERTAIN MACHINERY, PLANT, IMPLEMENTS, UTENSILS AND ARTICLES USED IN PRODUCTION OF RENEWABLE ENERGY

The redesigned Renewable energy tax incentive under section 12BA will apply to the currently eligible renewable energy sources, with no electricity-generation limits for the duration of this temporary incentive. Certain new and unused assets owned by a taxpayer will qualify if they are used in the generation of electricity. Such assets must have been brought into use by the taxpayer for the first time for purposes of trade on or after 1 March 2023 and before 1 March 2026. Businesses can deduct 125% of the cost incurred with reference to eligible assets, upfront.

Where a taxpayer disposes of an asset on or before 1 March 2026, for which a redesigned renewable energy tax incentive is granted, the amounts deducted (a maximum of 125% of the cost of the asset) will be fully recouped.

• ITR12 FORM CHANGES — REDESIGN SECTIONS 10(1)(o)(i) AND 10(1)(o)(ii): FOREIGN EMPLOYMENT INCOME EXEMPTION

SARS has redesigned the s10(1)(o)(i) and s10(1)(o)(ii) questionnaire to make it easier for taxpayers to complete the return.

It noted that the ITR12 form rules were a challenge to taxpayers. Previously, taxpayers had to first select the applicable wizard questions for the income, exemption, and foreign tax credit containers before completing the exemption amount for qualifying criteria.

The updated form streamlines this process, making it easier for taxpayers to complete the return.

• ITR12 FORM CHANGES — BENEFICIAL OWNER

For 2024 Filing Season changes, the taxpayer would complete the Details of Partners of his or her partners on the ITR12 where applicable to align with the Beneficial Owner requirement.

Definition of “Beneficial Owner” as extracted from the Tax Administration Act, 2011:

(a) of a company, has the meaning assigned to it by section 1 of the Companies Act, 2008 (Act No. 71 of 2008).

(b) of a partnership, means a natural person who, directly or indirectly, ultimately owns, or exercises effective control of, the partnership, and includes—

(i)         every partner, including every member of a partnership en commandite, an anonymous partnership or any similar partnership;

(ii)        if a partner in the partnership is a legal person or a natural person acting on behalf of a partnership or in pursuance of the provisions of a trust agreement, the beneficial                        owner of that legal person, partnership or trust; and

(iii)       the natural person who exercises executive control over the partnership; and

(c) of a trust, has the meaning assigned to it by section 1 of the Trust Property Control Act, 1988 (Act No. 57 of 1988);”.

Beneficial Owner is crucial for tax administration because it helps ensure transparency and accountability in financial transactions. By identifying the individuals who ultimately benefit from an asset or income, tax authorities can accurately determine tax liabilities and prevent tax evasion, which information may also assist other competent authorities in the investigation of money laundering, and other illicit activities. Furthermore, Beneficial Owner information facilitates international cooperation and exchange of tax-related information among jurisdictions. This cooperation is crucial in detecting and addressing cross-border tax evasion and ensuring that taxpayers fulfil their obligations in the appropriate jurisdictions.

• NOTE TO TAX PRACTITIONERS

In recent years, SARS has observed that Tax Practitioners sometimes put their own details in the contact information section in the place designated for the individual taxpayers that they represent when submitting ITR12 forms. SARS wishes to emphasise to practitioners that when completing and submitting ITR12 returns for individual taxpayers, they must ensure that the container designated for the individual taxpayer’s details is filled with the taxpayer’s information, not that of the Tax Practitioner.

Importantly, it must be noted that there is already a designated container for Tax Practitioners to declare their own particulars. Therefore, Tax Practitioners must not use fields intended for individuals to declare their own details.

In addition, remember that the information in the declaration must be true and accurate.

17 July 2024 – The latest scam is an email asking you to click on a link, seemingly from www.sars.gov.za but linking to a fraudulent website.

How to spot a fraudulent link, always hover over hyperlinks to make sure it’s a sars.gov.za link:

Protect yourself from scams and phishing!

 Do not open or respond to emails from unknown sources.

 Beware of emails or SMSs asking for personal, tax, banking or eFiling details.

 SARS will never send you hyperlinks to other websites.

Watch our short tutorial video on how to spot scams.

17 July 2024 – To facilitate the upcoming two-pot retirement system changes, SARS will be making enhancements to the Tax Directives process. The changes are detailed in IBIR-006 Tax Directives Interim Specification Version 6.704. Trade testing commenced on 1 July 2024 and will run till 16 August 2024. Please follow these steps to submit test files:

• • Step 1: Before testing can commence, you will need to email 10 taxpayer reference numbers to [email protected] to ensure the numbers are active. In the email subject line, use “Tax reference numbers for Trade Testing”. A maximum of 10 taxpayer reference numbers will be allowed.
  • Step 2: You will be notified via the same email address to confirm when testing may commence.

For trade testing queries please email [email protected].

17 July 2024 – The North West Mobile Tax Unit schedule for August 2024 is now available.

16 July 2024 – The Commissioner for the South African Revenue Service (SARS), Mr Edward Kieswetter expresses, his sincere gratitude to all taxpayers who interacted with SARS over the past two weeks. This includes those who were part of the Individual Tax Filing Season 2024 that commenced yesterday, 15 July 2024 and will run until 21 October 2024 and 20 January 2025 for non-provisional and provisional taxpayers, respectively.

Commissioner Kieswetter affirmed that “In line with our strategic intent of developing a tax and Customs system that is based on voluntary compliance, through the synthesis of people, data, and technology, we continue to modernise our systems. We are continuing to work to provide a seamless, empowering and enabling taxpayer experience, where tax eventually just happens for the millions of South Africans. We are deliberate in making the Filing Season a non-event”.

Nearly 150 million third-party data records were harvested this year, which serves as the building block of the Filing Season. Processing this volume of Big Data through the application of artificial intelligence and enhanced machine learning algorithms enables SARS to automatically assess a larger number of taxpayers, pre-populate more returns, improve the integrity of taxpayer declarations, and simplify the taxpayer experience.

Read the full Media Release here.

16 July 2024 – The Free State and Northern Cape Tax Unit schedules for July to October 2024 are now available.

15 July 2024 – The Mpumalanga Mobile Tax Unit schedules for July to September 2024 are now available.

15 July 2024 – Binding Private Rulings

• Binding Private Ruling 404 – Expenditure incurred in respect of environmental conservation

15 July 2024 – The state provides state warehouses for the safekeeping of goods. These are managed by Customs. The purpose of this list of unentered goods is to notify the importer, exporter and any other person that has interest in the goods that the goods have been taken up into the State warehouse and if they remain unentered they will be disposed in accordance with the provisions of the Customs & Excise Act.

See the latest Customs Weekly List of Unentered Goods here.

15 July 2024 – SARS is currently experiencing extremely high volumes on our online channels which is leading to intermittent slowdown and service interruption. Our technical teams are actively working on optimising and improving response times in order to provide the best service experience. We apologise for any inconvenience caused.

15 July 2024 – Prioritise your tax matters with SARS self-help channels! Filing Season 2024 for individual taxpayers opens today 15 July to 21 October 2024. Use the available SARS self-help channels, such as eFiling, the SARS MobiApp, SARS USSD (*134*7277) and the SARS Online Query System (SOQS), to manage your taxes efficiently and effortlessly.

Get started today and experience hassle-free tax management!

#YourTaxMatters

See the Filing Season 2024 webpage for more information.

12 July 2024 – Tax Administration Act, 2011

• Christoffel Hendrik Wiese and Others v CSARS (1307/2022) [2024] ZASCA 111 (12 July 2024)

Taxation – recovery of tax debt from third party in terms of s 183 of Tax Administration Act, 28 of 2011 (the TAA) – whether term ‘tax debt’ envisages existence of assessed tax indebtedness at the time of dissipation of assets to obstruct the collection of tax debt – admissibility of transcript of evidence at inquiry in subsequent proceedings in terms of s 56 of the TAA.

12 July 2024 – Achieving our Vision 2024 of a smart, modern SARS with unquestionable integrity that is trusted and admired is of paramount importance. Pivotal to the delivery of our vision are our digital platforms and technology infrastructure. To provide clarity and certainty, make it easy for taxpayers and traders to comply with their obligations and building public trust and confidence, our technology assets must demonstrate the highest levels of availability, robustness and security.

In accordance with our Vision and Strategic Objectives, which include modernising our systems to provide Digital and Streamlined online services, we are hard at work ensuring that our digital platforms and technology infrastructure are available, robust and secure, by performing regular upgrades, enhancements and maintenance.

Considering the above, SARS Digital platform maintenance are scheduled for Friday, 12 July 2024 from 19h30 to 21h30.
During this time, you may experience intermittent service interruption on our Tax and Customs Digital Platforms.

11 July 2024 – The Boiketlong pop-up branch schedule for July 2024 is now available.