What’s New at SARS

1 July 2024 – The published Excise Wine and Vermouth policy has been updated to indicate the following:

• Exclusions in terms of rebate item 624.50.
• Clarification in terms of Schedule 6 Part 1 C of rebate items 620.22 and 620.33.
• Requirements for licensing an excise OS warehouse.
• Requirements when applying for an extension of a licensed SVM warehouse.

1 July 2024 – RFP38/2023: Appointment of accredited service provider to facilitate adult basic education and training for period of 36 months.

30 June 2024 – The highest decision-making body of the World Customs Organisation, the WCO Council, has re-elected SARS Commissioner Edward Kieswetter as the WCO Chairperson for a second term, 2024 – 2025.

Commissioner Kieswetter said after his re-election that the WCO was becoming ever more important given the technological and big data innovations that facilitate trade, the growth of eCommerce, as well as global uncertainties taking place in the geo-political landscape.

“The key objectives of the WCO and all its member countries is to promote legitimate trade, to prevent trade in illicit and harmful goods, and ensure the safe movement of goods and travelers across the borders that divide the world.

“It is known that Customs unites whereas borders divide. But the unity amongst the Customs community must be directed towards a common transformative goal that brings economic and social well-being to all citizens of member states,” Mr Kieswetter said.

He said it was an honour that he was once again entrusted to provide this transformative leadership of such a vital organization as the WCO in the prevailing turbulent times. “Central to the role of the WCO Chair, is to ensure that the WCO Secretariat has both the capacity as well as the orientation to serve the needs of Customs Administrations around the world,” Commissioner Kieswetter said.

For more information contact [email protected]

28 June 2024 – The South African Revenue Service (SARS) announces 15^th July 2024 as the start of the Filing Season for provisional and non-provisional taxpayers who are required to file a tax return. Auto-assessments for an expanded pool of taxpayers will run from the 1^st to the 14^th July 2024.

Taxpayers whose contact details, including an email address and cell phone number, as well as banking details, have changed must update these details on eFiling or the SARS MobiApp to facilitate an easy and seamless Filing Season. The update of this information goes a long way to preventing fraud and identity theft.

Read the full Media Release here.

28 June 2024 – Customs and Excise Act, 1964: Publication details for tariff amendments notices R5015, R5016, and R5017, as published in Government Gazette 50892 of 28 June 2024, are now available.

 

28 June 2024 – Customs and Excise Act, 1964: The draft amendments are proposed to the Schedules to the Customs and Excise Act as follows:

• Schedule No. 1 Part 1 – Insertion of various new 8-digit tariff in Chapter 8 to provide for mangoes, dried grapes and pomegranates
• Schedule No. 3 – Delete the provisions of the old APDP, referred to as APDP I
• Schedule No. 4  – Delete the provisions of the old APDP, referred to as APDP I
• Schedule No. 5 – Delete the provisions to the old APDP, referred to as APDP I

Due date for comment: 26 July 2024

 

 

 

28 June 2024 – South Africa recorded a preliminary trade balance surplus of R20.1 billion in May 2024 attributable to exports of R178.4 billion and imports of R158.3 billion.

See the full Media Release here.

Visit the Trade Statistics webpage.

28 June 2024 – The external guide and webpage have been updated to clarify the identification requirements for the process to verify banking details. The updated wording now reads as follows “A copy of your valid identity document, drivers licence, passport, temporary identity document, asylum seeker’s certificate or permit. For online submission, attach a copy. If you are visiting a SARS office, bring a copy and the original identification document.”

Updated guide and webpage:

• GEN-GEN-41-G01 – Change of Banking Details – External Guide
• Relevant Material or Supporting Documents

28 June 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 & technology infrastructure. To provide clarity & certainty, make it easy for taxpayers & traders to comply with their obligations and building public trust and confidence, our technology assets have to 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 & technology infrastructure are available, robust & secure, by performing regular upgrades, enhancements, and maintenance.

Considering the above, SARS Digital platform upgrades are scheduled for Saturday, 29 June 2024 from 05:00 to 10:00.

During this time, you may experience intermittent service interruption on our eFiling Tax and Customs digital Platforms.

27 June 2024 – Income Tax Act, 1962: Two guides were published

• Guide on Income Tax and the Individual (2023/24)
• Guide on the Determination of Medical Tax Credits (Issue 16)

27 June 2024 – The tax workshop schedules for North West province during July are now available.

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

• Part 2 of Schedule No. 4, by the insertion of rebate item 460.16/8541.43/01.06, in order to provide for a temporary rebate provision for the importation of photovoltaic cells, assembled in modules or made up into panels (ITAC Report 723);
• Part 1 of Schedule No. 3, by the deletion of rebate item 316.01/8415.90/02.06 and the insertion of rebate item 316.01/8415.20/01.06, to provide for a rebate provision for manufacturing of air conditioning machines identifiable for use in heavy motor vehicles (ITAC Report 627); and
• Part 1 of Schedule No. 1 by the substitution of tariff subheading 8541.43 in order to increase the rate of customs duty on crystalline silicone photovoltaic modules or solar panels from free to 10% (ITAC Report 613).

Publication details will be made available later

27 June 2024 – Further to our update on 19 June 2024, additional clarity on the Beneficial Owner changes plus a note to Tax Practitioners:

SARS is continuing its journey towards building its vision of a smart, modern organisation with unquestionable integrity, that is admired by all. Thus, it is working hard to make it easy for taxpayers to comply with their legal obligations. SARS has made the following updates for the upcoming Personal Income Tax Filing Season:

• PRO-RATA DEDUCTION IN RESPECT OF CONTRIBUTIONS TO RETIREMENT FUNDS

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 amount stipulated in section 11F(2)(a) of the Act used to calculate the allowable retirement contribution deduction (currently R350 000) shall be adjusted. The adjusted amount will bear the same ratio to R350 000 as the number of days in that year of assessment bears to 365 days.

Therefore, if any person’s year of assessment is less than 12 months, the allowable retirement contribution deduction (currently R350 000) will be applied pro rata.

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

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.

Therefore, if any person’s year of assessment is less than 12 months, the applicable contribution limitation (currently R36 000) will be applied pro rata.

• 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.

See the Solar Tax Rebate webpage for more information.

• 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 (BO)

For 2024 Filing Season changes, the taxpayer would complete the Details of Partners (excluding yourself) on 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);”.

BO 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, BO 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.

Keep an eye on the Filing Season webpage for more information.

27 June 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 Interface Specification Version 6.703. Trade testing will commence on 1 July 2024 and run until 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].

Keep an eye on the I want a Tax Directive webpage.

26 June 2024 – The Mobile Tax Unit schedule for East London during July to October 2024 is now available.

26 June 2024 – On Thursday, 27 June, SARS will honour small businesses across South Africa under the theme, “Innovation Waves: Sailing SMMEs to Success”. The theme highlights the power of innovation in driving small businesses’ growth.

The outreach activities are taking place in various regions from 09:00 – 15:00 on 27 June, see the venues per region here.

26 June 2024 – This year from 1 July 2024 we will again issue auto-assessments to taxpayers whose tax affairs are less complicated. The first thing to do is to log into eFiling or the SARS MobiApp and view your assessment. You will see all the data we used to calculate your assessment.

If you agree with the assessment, check if a refund is due to you or if you owe SARS. If a refund is due, then there is nothing more you have to do — you can log out and wait for the refund, which you can expect within approximately 72 hours, provided your banking details with SARS are correct. If you owe SARS, then make the payment via eFiling or SARS MobiApp on or before the payment due date. The payment due date of the amount owed to SARS is displayed on the “Notice of Assessment” (ITA34).

If you do not agree with the assessment, you can access your tax return via eFiling or SARS MobiApp, complete the return, and file it on or before the normal due date for non-provisional taxpayers of 21 October 2024. If your auto-assessment was issued after 21 October 2024, file within 40 business days after the notice of assessment.

See all the frequently asked questions on auto-assessments here.

24 June 2024 – In the run up to Filing Season 2024, SARS has published the following updated Guides:

• Guide to the Individual ITR12 Return for Deceased and Insolvent Estates
• How to submit your Individual Income Tax return via the SARS MobiApp
• Guide to submit your individual income tax return via eFiling
• Comprehensive Guide to the ITR12 Income Tax Return for Individuals
• Submit Request for Reduced Assessment (RRA01) via eFiling
• Guide to Help-You-eFile
• Guide for Provisional Tax

The Personal Income Tax phase of Filing Season 2024 commences with the issuing of auto-assessments from 1 July 2024 up to 14 July 2024. Taxpayers who do not agree with their auto-assessments can file a tax return immediately, while all other taxpayers who are still required to file a tax return will be able to do so from 15 July 2024 onwards, with the exception of Trusts, which can do so from 16 September 2024 onwards. Non-provisional taxpayers who are required to file a tax return, as well as taxpayers in the auto-assessment population who wish to file a return in response to their auto-assessments, have until 21 October 2024 to do so. Provisional taxpayers and Trusts have until 20 January 2025 to file a return.

The updated Guides are outlining the changes and enhancements for this filing season, including but not limited to:

AUTO ASSESSMENT

Taxpayers who are part of the auto-assessment population will receive an SMS and/or email to notify them that an auto-assessment has been issued. An auto-assessment will be based on information available on SARS records and data received from employers, financial institutions, medical schemes, retirement annuity fund administrators and other third-party data providers.

Taxpayers who are in agreement with their auto-assessments do not have to file a tax return or do anything more. Taxpayers who are not in agreement with their auto-assessments can file a tax return in the normal way. SARS will provide each eligible taxpayer with the following information pertaining to the auto-assessment:

• An ITR12 return that has been auto completed.
• A Notice of Assessment (ITA34)

Note: the type of assessment will indicate ‘original estimate assessment’ to denote that it is an original assessment based on an estimate.

INVESTMENT INCOME FOR SPOUSE

From the 2024 Year of Assessment (YOA) each investment income section on the return will display a sub-section to separately declare investment income received by the spouse and this must be supported by a will and/or antenuptial contract in place to support this declaration.  This applies in cases where investment income only accrues to one spouse despite the fact that they are married in community of property.

TAX FREE INVESTMENTS (TFI)

A Tax-Free Investment is a financial instrument; or policy (as defined in section 29A of the Income Tax Act) owned by a natural person or deceased/insolvent estate of a natural person and is administered by a person or entity designated by the Minister of Finance (e.g. banks, long term insurers, national government, collective investment scheme companies).

From 1 March 2024, if an individual’s year of assessment is less than 12 months, the balance of the annual TFI limitation not fully utilised will be carried over to any subsequent year of assessment that falls within the same tax year:

If a taxpayer ceased to be resident and has more than one ‘period’ assessment for the same tax year, the balance of the annual TFI limitation not fully utilised in the first period assessment will be used in the subsequent period assessment.

If a taxpayer was coded as insolvent during the year of assessment, any balance of the annual TFI limitation not fully utilised for tax reference number 1 (coded number) will be used for tax number 3 (new tax number), should the taxpayer declare tax free investment for the same year of assessment.

ALLOWABLE RETIREMENT FUND CONTRIBUTION DEDUCTION

Section 11F(2)(a) of the Income Tax Act was amended. With effect from 1 March 2024, where a person’s year of assessment is less than 12 months, the amount used to calculate the allowable retirement fund contribution deduction (currently R350 000 i.t.o. section 11F(2)(a)) must be proportionate to the number of days in that year of assessment.

SOLAR ENERGY TAX CREDIT

Government introduced a rooftop solar tax incentive for individuals who invest in solar photovoltaic (PV) panels.

• The tax credit will only apply to new and unused solar PV panels acquired and brought into use for the first time during the 2024 year of assessment (i.e. 1 March 2023 – 29 February 2024) and that have a minimum generation capacity of not less than 275W each.
• The solar PV panels must form part of a system connected to the distribution board of a residence that is mainly (i.e. more than 50%) used by the individual for domestic purposes and an electrical certificate of compliance must have been issued for that residential property (i.t.o. the Electrical Installation Regulations, 2009) after the solar PV panels were installed.
• The solar energy tax credit applies to the 2024 year of assessment only and the amount allowed as a deduction will be 25% of the cost of the above solar PV panels up to a maximum of R15 000.

Note: batteries, inverters, fittings or diesel generators, installation costs and portable panels do not qualify.

SARS MOBIAPP

The following enhancements have been made on the SARS MobiApp:

• Taxpayers will now be encouraged to download the latest SARS MobiApp version. Where the taxpayer has an older version downloaded, an error message will be displayed on their device.
• Taxpayers will now be redirected to their ITA34 once an auto-assessment has been issued.

24 June 2024 – The SARS Tariff Determination enhancement project, which includes the publication of Tariff Determinations is divided into two phases: the first phase involves the online processing, issuing and publication of new applications by relevant internal users only, the publication will exclude old cases which were finalised before the implementation of the new system in May 2024. Traders will not be able to submit applications electronically as yet. Electronic submission of new applications by traders will follow in the second phase of the project which is planned for around September 2024. The abridged version of the finalised tariff determinations can be viewed via our search engine from the 1st of July 2024.