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SOUTH AFRICAN TAX FILING SEASON 2020 during coronavirus pandemic

We must be prepared to live with coronavirus for a year or even more' - Ramaphosa
Taxpayers must remain compliant, more than ever before, as our government needs tax revenue to provide much necessary relief to businesses and individuals, and especially to keep the community health workers, and other medical and frontline workers employed.
SARS announced 3-Phased approach for the upcoming tax filing season for personal taxpayers:


    1. PHASE 1 - 15 April 2020 - 31 May 2020 - EMPLOYER FILING

  • Payroll taxes (PAYE) are submitted to SARS with the Employer Annual Reconciliation for 2020 tax year
  • Compliance by providers of Third Party Information includes employers, banks, financial service companies and medical and insurance schemes

    2. PHASE 2 - 1 June 2020 - 31 August 2020 - TAX FILE UPDATES

  • Taxpayers’ tax files are up to date
  • Third party data providers, including employers, who remain wilfully non-compliant will be charged criminally during this period.
  • SARS will send auto-assessments and give an opportunity to taxpayers to confirm their acceptance of the assessment outcome according to SARS.
    During PHASE 2, individual taxpayers who are required to file but have not been auto-assessed may file early via on-line facilities if their employers & other third party data providers are fully complaint (which includes no PAYE debt without a proper and secure deferment arrangement)
  • Individuals who are not required to file will be informed.
  • Individuals who are required to file during Phase 3 will be informed

3. PHASE 3 - 1 September - 31 January 2021 - EMPLOYEE FILING
Individuals who are required to file will be reminded.

  • 1 September to 16 November 2020 – tax filing for non-provisional taxpayers on SARS E-filing, to minimise visits to the SARS Branches
  • 1 September to 22 October 2020 – tax filing for non-provisional taxpayers, who make use of SARS Branch facility.
  • Provisional Taxpayers who have not accepted the outcome of an auto-assessment are required to file when they are ready but not later than 31 January 2021.
  • Read the full media statement by SARS Commissioner Edward Kieswetter HERE.
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VAT Regulations prescribing electronic services were amended and with effect from 1 April 2019, the registration threshold for which a foreign electronic services supplier is required to register for VAT, was increased from R50 000 to R1 million.

As a result, a foreign electronic services supplier may wish to cancel its registration if its total value of taxable supplies will not exceed the threshold of R1 million, in any consecutive 12-month period.

Section 72 of the VAT Act allows the Commissioner to make an arrangement as to the manner in which the provisions of the Act shall apply. Therefore, Binding General Ruling (VAT) 51 constitutes such an arrangement, where “a foreign electronic services supplier that wishes to have its registration canceled in the circumstances where the total value of taxable supplies will not exceed R1 million in any consecutive period of 12 months, may make a written request to have the registration canceled”.

Are you a foreign electronic service supplier in South Africa, and do you want to cancel your VAT registration, because the ruling applies to you?

We apply to SARS on your behalf to cancel your VAT Registration.

What happens when you have a second income?

The South African tax system is based on a progressive tax rate table, meaning that the more taxpayers earn, the higher the marginal tax rate and the more tax is payable on assessment.

Taxable income is calculated by taking into consideration all gross income, in cash or otherwise, received by or accrued to a resident taxpayer, after subtracting all allowable deductions, under the tax laws in the Republic.

An employer is liable under the provisions of the Fourth Schedule to the Income Tax Act to deduct employees’ tax (PAYE) on behalf of employees and must pay the amounts so deducted to SARS. Furthermore, the Act requires all registered employers to issue IRP5 certificates to their employees, for a relevant tax year, in which all income, allowable deductions, and tax paid are stated.

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ITR14 must-knows

Companies that are incorporated in the Republic and are tax residents are subject to income tax in South Africa on all their South African sourced and worldwide income. Non-resident foreign companies that have a permanent establishment or operate a business through a branch are subject to income tax in the Republic on all their South African sourced income.

This is normally referred to as corporate income tax and it forms part of the gross national tax revenue. According to "Chapter 4: Revenue trends and tax policy" from the Budget for 2018/2019, the corporate income tax accounts for 15.51% of the estimated 2018/2019 consolidated budget.

Corporate income tax was also the subject of a report issued in March 2018 by the Davis Tax Committee on the efficiency of the corporate tax system in South Africa. 

SARS is mandated to assess and to collect corporate income tax from corporate taxpayers, who must complete the ITR14 income tax return, which is specifically designated for companies. The ITR14 must be completed and submitted to SARS within 12 months after the financial year-end of a corporate entity.

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Taxable benefit arises when an employer grants any service to an employee, which is at the expenses of the employer. Paragraph 2 of the Seventh schedule expressively defines what is a taxable benefit. By its application, the employer providing transport services to its employees, should give rise to a taxable benefit. However, paragraph 10(2)(b) of the Seventh Schedule to the Income Tax Act states that:

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