What’s New at SARS

9 December 2022 – Binding Class Rulings

• Binding Class Ruling 085 – En commandite partnerships investing in photovoltaic solar energy plants
• Binding Class Ruling 084 – Transfer of funds held in trust to a “beneficiary fund”

9 December 2022 – Income Tax Act, 1962

• Interpretation Note 18 (Issue 5) – Rebate and deduction for foreign taxes on income

9 December 2022 – Income Tax Act, 1962

• Interpretation Note 18 (Issue 4) – Rebate and deduction for foreign taxes on income

9 December 2022 – The December issue of the VAT Connect newsletter is now available.

9 December 2022 – The South African Revenue Service (SARS) has implemented enhancements to the Tax Directives system in line with the introduction of Par 2(2B) of the Fourth Schedule which requires that employees’ tax to be calculated and withheld at a fixed tax rate from an annuity. Read more.

The following documents have been updated:

• IT-AE-41-G04 – Guide to the Tax Directive functionality on eFiling – External Guide
• IRP3s – Application for Tax Directive Share Option – External-Form.

8 December 2022 – Invitation to a tax education session for taxpayers in the arts, entertainment and sports sector

SARS is committed to assisting all taxpayers and small businesses to meet their tax obligations and remain compliant. In this regard, SARS will host a virtual session for small businesses and individual taxpayers within the entertainment, arts, and sports sectors.

The following topics will be covered:

• Basics of Taxation
• Voluntary Disclosure Programme
• Debt Management Process
• Estates Management Process

Event details:
Date: Tuesday, 13 December 2022
Time: 10:00-14:00
Platform (Virtual): Zoom and YouTube

As a valued taxpayer, you are invited to join the education session, which has a limited capacity.

Register for this session in advance at https://sars-gov-za.zoom.us/webinar/register/WN_AUaI6UG1Qru6lfn9AlbScQ

Meeting ID: 955 2765 7733

Passcode:  685945 

YouTube link: https://youtu.be/JYAlMrmN7lE

After registering, you will receive a confirmation email with information on how to log into the webinar for an opportunity to have your questions answered during the session.  If you have tax related questions, please send an email to [email protected]  The webinar will also be recorded and published on the SARSTV YouTube channel after the event.

7 December 2022 – Customs officers of the South African Revenue Service (SARS) have seized a substance that is used to manufacture the drug Mandrax after inspecting a truck that was entering South Africa from Mozambique.

Customs Inspectors from Lebombo Customs Detector Dog Unit were conducting random searches of cargo at the imports channel at Lebombo Border Post when they stopped a yellow truck with two trailers en route to South Africa.

The officers engaged the driver, a Zimbabwean citizen, to perform a manual inspection to verify the declared goods, which were declared as boxes of hair extensions. A Customs officer requested the declaration documents from the driver which were handed over to the officer.

See the full media statement here.

7 December 2022 – Income Tax Act, 1962: Average Exchange Rates

• Table A – A list of the average exchange rates of selected currencies for a year of assessment as from December 2003
• Table B – A list of the monthly average exchange rates to assist a person whose year of assessment is shorter or longer than 12 months

7 December 2022 – SARS launched a new self-service automated system in 2020 to make it easier for stakeholders and intermediaries to register and/or license for Customs purposes. The Registration, Licensing and Accreditation (RLA) system has undergone various enhancements since its launch. Currently customs clients have been able to capture and submit their Registration and Licensing (RLA) applications on the electronic RLA platform through eFiling.

For more information see our letter to Trade.

7 December 2022 – Implementation of Tax Directive system enhancements scheduled for 9 December 2022

The introduction of Par 2(2B) of the Fourth Schedule requires that employees’ tax be calculated and withheld at a fixed tax rate from an annuity, if a taxpayer receives remuneration from more than one source during a year of assessment and where one or more of those sources is from an employer who is a retirement fund or is licensed as an insurer under the Insurance Act.

These employers are required to apply the fixed tax rates prescribed and made available on [email protected]™ Employer or eFiling by SARS. The policy intention aims to ensure that the monthly employees’ tax is calculated correctly so that the taxpayer does not have a substantial tax shortfall due by you to SARS or due to you by SARS on assessment. These tax rates are calculated using prevailing tax rates and information pertaining to the taxpayer at the time of processing. For more information click here.

6 December 2022 – Customs & Excise Act, 1964

• Protocol amending Zambia CMAA – date of entry into force is 27 October 2022

Status overview of all customs agreements on mutual administrative assistance has subsequently been updated

6 December 2022 – Due to ongoing maintenance eFiling may not be available on Friday 9 December 2022 between 18:00 and 23:00. Our apologies for the inconvenience.

5 December 2022 – The South African Revenue Service (SARS) wishes to express its heartfelt congratulations to the outstanding recognition of its Head of Technology and Solutions Delivery (TSD), Mr Intikhab Shaik, for receiving the Institute of Information Technology Professionals South Africa (IITPSA) President’s Award as the Visionary Chief Information Officer of the Year.

What makes this prestigious accomplishment so noteworthy is that Mr Shaik’s work was compared against industry peers in both the private and public sectors. The determination that his performance is unmatched and stands head and shoulders above all others is a testament to the quality of his technology leadership. It was during the period of COVID-19 that the genius of Mr Shaik and his team shone the brightest.

SARS Commissioner Mr Edward Kieswetter, in acknowledging the public recognition of Mr Shaik, pointed out: “During the various levels of lockdown, Mr Shaik and his team designed and implemented more than 40 digital in-house solutions that enabled SARS to continue to deliver its services to taxpayers and to deliver on its core mandate of collecting all revenue due. The continued operation of SARS during this time, was measurably enabled through the enabling technology platform built by the TSD team under Intikhab’s leadership. This contributed measurably to the economy of the country functioning despite the severe restrictions imposed during COVID-19. We are immensely proud of this contribution and believe that this public recognition is well deserved.”

The capability of SARS to use data science, artificial intelligence and enabling technology innovation is best demonstrated by the implementation of auto-assessments that covered well over 4 million taxpayers. This is in line with the Strategic Intent to make compliance easy for honest taxpayers whilst making it hard and costly for this who seek to defraud the tax system.”

The exceptional achievement of the TSD team under the exemplary leadership of Mr Shaik, dovetails with the SARS Vision of building “a smart modern SARS with unquestionable integrity, trusted and admired. This is aligned with the collective orientation of the organisation to regard its contribution as a rare privilege in serving South Africa and all its people.

What makes this recognition encouraging, is that it has laid the foundation of SARS to develop an operating model based on automation, insights from data, in an empowering technology-enabled operating model. It is hoped that this system will be further developed to the point where interaction between SARS and all taxpayers and traders will happen digitally, automatically and seamlessly!

What Mr Shaik has achieved at SARS since he joined the organisation more than 30 years ago, speaks aptly to his ability to demonstrate personal and intellectual mastery in his field. It communicates his exceptional competence in how he manages his team to bring about the positive impact on his personal brand and the SARS brand and reputation.

SARS is proud of Mr Shaik’s achievements for continuously improving the important interface between the organization and taxpayers and traders. The recognition he has achieved resoundingly confirms that industry players acknowledge the strides that SARS has made, notwithstanding the financial constrains that the organization faces. Hearty congratulations to Mr Shaik and the team.

Photo SARS – Mr Intikhab Shaik

For more information contact [email protected]

2 December 2022 – The SARS Rustenburg office is closed from 15:00 today for the rest of the day. Our apologies for the inconvenience.

2 December 2022 – Income Tax Act, 1962

• Interpretation Note 126 – Extraordinary dividends treated as income or proceeds on the disposal of certain shares

1 December 2022 – Customs & Excise Act, 1964

• Pacific Solar Technologies (Pty) Ltd v CSARS (715/2021) [2020] ZASCA 166 (29 November 2022)

Customs and Excise Act 91 of 1964 – whether solar home system has the essential character of an energy source and power generation device or that of a lighting kit – product has a utility of its own – it constitutes a fully functioning lamp – classifiable under tariff heading 9405.40.21 of Part 1 of Schedule 1 to the Act.

30 November 2022 – SARS today releases trade statistics for October 2022 recording a preliminary trade balance deficit of R4.31 billion attributable to exports of R159.61 billion and imports of R163.92 billion. Exports decreased by R32.67 billion (-17.0%) between September and October 2022 and imports decreased by R2.19 billion (-1.3%) over the same period.

See the full Media Release here.

Visit the Trade Statistics webpage.

30 November 2022 – The South African Revenue Service (SARS), in terms of the Tax Administration Act No. 28 of 2011, has made provision for the Voluntary Disclosure Programme (VDP) to be permanently available to a qualifying individual, company or trust that seeks to voluntarily disclose and regularise their tax affairs. This step is aligned to the SARS’ strategic objective, which seeks to provide clarity and certainty as well as make it easy and seamless for taxpayers and traders to comply with their obligations.

SARS would like to encourage all taxpayers who may be in default on their tax affairs, to approach SARS via the Voluntary Disclosure Programme. By coming forward willingly, such taxpayers will receive the help and advice from SARS to expedite the resolution of their request. Where through its own investigative processes SARS discovers non-compliance, it will not avail this opportunity to non-compliant taxpayers but will act within the remit of the law to deal with non-compliance.

SARS is firmly committed to the pursuit of strategic intent, which is to promote voluntary compliance whilst lowering the cost of compliance. To this end, we want all taxpayers to understand that they always have an opportunity to regularise their tax affairs. While voluntary compliance is our first preference, SARS is refining its capability to detect and make it hard an costly for non-compliant taxpayers.

Taxpayers who have tax defaults with SARS and would like to be granted relief from penalties, and avoid possible criminal prosecution can voluntarily disclose their outstanding tax affairs. Tax defaults, range from outstanding returns, submitting inaccurate or incomplete information or the failure to submit information to SARS requested in relation any tax type that SARS administers, excluding duties and levies charged in terms of the Customs and Excise Act, 91 of 1964.

The Voluntary Disclosure Programme is a unique opportunity for defaulting taxpayers to regularise their tax affairs, SARS encourages concerned taxpayers to make use of this legal instrument.

A defaulting taxpayer will be granted relief under the programme if the application meets the following requirements:

• The disclosure must be voluntary;
• The disclosure is full and complete in all material respects;
• The disclosure involves a default which has not occurred within five years of the disclosure of a similar default;
• The disclosure involves a behaviour referred to in the understatement penalty table in Section 223 of the Tax Administration Act;
• The disclosure would not result in a refund due by SARS; and
• The disclosure is made in the prescribed form and manner.

Prospective applicants can apply for VDP via SARS eFiling.

Successful VDP applications will culminate into an agreement that will cover amongst others:

• The material facts of the defaults disclosed;
• The amount payable by the taxpayer including the understatement penalty separately reflected;
• The relief granted by SARS under the Tax VDP;
• Payment arrangements and dates in respect of tax payable; and
• The fact that the relief may be withdrawn if SARS subsequently determines that the disclosure did not constitute a valid and complete disclosure under the Tax VDP.

For more information please contact [email protected] or Email: [email protected] or Telephone: 0800 864 613.

29 November 2022 – The new Guide for the South African Traveller Management System was published. The guide includes provision for the submission of an online declaration if a traveller so chooses instead of the manual TC-01 Traveller Declaration in terms of R.2799. Any traveller entering or leaving South Africa at a port of entry where the testing of the electronic South African Traveller Management System (SATMS) is implemented during the pilot phase, may voluntarily participate in such testing by submitting an electronic traveller declaration via the SATMS link on the Traveller Declaration webpage or the SARS MobiApp. A traveller or crew member who submitted an online declaration, will receive an electronic notice of whether to report to the Red or Green channel upon arrival in, or departure from South Africa.

For more information, see the:

• Guide to the South African Traveller Management System
• Traveller Declaration webpage
• Online Traveller Declaration form

29 November 2022 – RFP19/2022: Appointment of a service provider for the provision of media monitoring and analysis service.