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Financial Planning
June 5, 2019

SARS improving service delivery

<strong>By: SARS</strong>

<h2><strong>SARS improving service delivery - 2019 tax return filing season </strong></h2>

SARS released a notice announcing the up-coming 2019 tax return filing season for individual and trust taxpayers.

Various changes have been announced which according to SARS will make it simpler and more convenient for taxpayers to file their tax returns.

<strong>The 2019 tax season will start on 1 July 2019 where taxpayers use eFiling or the MobiApp to submit their tax returns with the closing dates as follows:</strong>

<ul>

<li>4 December 2019 for non-provisional taxpayers using eFiling and the MobiApp</li><li>31 January 2020 for provisional taxpayers using eFiling.</li>

</ul>

Where taxpayers wish to submit tax returns at a SARS branch they are able to do this from 1 August 2019 until 31 October 2019.

<strong>SARS intends to improve its service delivery with the revamped MobiApp available to smartphone users as well as improvements to eFiling.  New features on the MobiApp will include:</strong>

<ul>

<li>simpler navigation</li><li>the introduction of biometric authentication</li><li>a one-time pin as an added security feature</li><li>the ability to reset username and password</li><li>security questions</li><li>and the scanning and uploading of supporting documents.</li>

</ul>

<strong>For the 2019 tax season, taxpayers who meet the following requirements do not need to submit a tax return, namely:</strong>

<ul>

<li>total employment income does not exceed R500 000;</li><li>employment income is received from one employer for the full tax year;</li><li>no other form of income is received, e.g. car allowance, business income, rental income or taxable interest; and</li><li>no additional allowable tax related deductions or rebates are claimed, e.g. medical expenses, retirement annuity contributions and travel expenses.</li>

</ul>

SARS intends to issue a ‘simulated outcome’ to taxpayers who are not required to submit a tax return as if they had in fact done so and the taxpayer may accept this outcome or update the tax return and submit such to SARS.

<h3>Lessons from the last tax season</h3>

SARS has over the last few years expanded its third-party reporting requirements now not only requiring employers to provide data in order to pre-populate the tax returns with the employees’ tax certificates (IRP5s), but requiring medical aid schemes and retirement fund administrators to provide similar data in order to pre-populate tax returns with information pertaining the contributions paid by the taxpayer.

However, notwithstanding this pre-populated data taxpayers and tax practitioners alike continue to experience high volumes of SARS enquiries requesting the verification of the tax returns which necessitates the submission of supporting documents, including the tax certificates from the medical aid scheme and the retirement fund.

Surely this request for supporting information is superfluous as SARS should be relying on the accuracy of the third party reporting data with which it had allowed the pre-population of the tax returns in the first place!

Another major cause of frustration for taxpayers and tax practitioners was the endless issues experienced with the PDF version documents or accessing, saving and the eventual printing of tax returns and various other SARS documentation. Apparently, it all had to do with one’s ‘browser compatibility’, therefore ensure taxpayers should ensure they are using the latest versions required by SARS (see the SARS website for details).

<h3>Common missteps when filling out their tax returns</h3>

A friendly reminder that taxpayers should have all their supporting documentation readily available should SARS request the verification of their 2019 tax return.  This information must be kept for a five-year period from the submission of such.

Taxpayers should be receiving their various tax certificates and other related documentation from their employers, financial and similar institutions as well as their medical aid schemes as these institutions were obliged to submit their tax data to SARS by end May 2019.

<strong>Some useful tips in the completion of the 2019 tax return:</strong>

<ul>

<li>Only tick the question ‘did you cease to be a resident of RSA’ where you ceased to be a resident for tax purposes during the tax year in question.  The question is not relevant where your tax status changed in prior tax years.</li><li>Where you receive income from two sources e.g. two different employers, you will need to submit a tax return in order for the taxable incomes to be combined and assessed to income tax.</li><li>Only donations made to an approved public benefit organisation qualifies for a deduction against your taxable income, subject to a maximum deduction of ten per cent of your taxable income.</li><li>You need a detailed logbook of your business kilometers travelled should you wish to claim a deduction against your travel allowance or to reduce the taxable benefit in respect of the right of use of a company vehicle.</li><li>Distributions received from a qualifying REIT company are taxable dividends and should not be disclosed as dividends or interest.  REIT distributions should be reflected under code 4238.  Where you are not a resident of South Africa for tax purposes and you receive a distribution from a REIT company the distribution will qualify as a dividend which is subject to dividends withholding tax as opposed to income tax.</li><li>Where you have paid the contributions towards a medical aid scheme for a qualifying person you need to disclose this information separately to the contributions paid towards your own medical aid scheme. A qualifying person is essentially a family member whom is dependent on you for family care and support, for example a mother, father, mother-in-law, father-in-law, brother, sister, grandparents, grandchildren.  It also includes a person whom is recognised as a dependant of the taxpayer in terms of the rules of the medical aid scheme.</li><li>If you are a beneficiary of a discretionary trust and are in receipt of awards or distributions made by the trustees of such trust the disclosure of such income and or capital is required separately.</li>

</ul>

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