The following is news flash 2024/15 published by the PAGSA on March 12, 2024 regarding SARS PAYE BRS effective from 1 March 2024 (v 23.0.0)

SARS PAYE BRS VERSION 23.0.0 RELEASE FOR 2024/2025

After lengthy discussions, SARS released version 23.0.0 of the PAYE BRS that provides the tax certificate reporting rules for the 2024/25 year of assessment.

This version must be used for the Interim tax certificate submissions and reconciliations as of 31 August 2024 (effective from 1 March 2024), and if not changed before then, for 28 February 2025.

SARS has indicated that the employer’s filing season for the Interim submissions will open on 16 September 2024 and close on 31 October 2024.

Note that the reporting rules of the tax certificate codes that must be used to report retirement fund transactions are unchanged, despite the amendment to section 11F(4)(b) that effective from 1 March 2024, now states as follows:

Section 11F(4)- Any amount paid or contributed by an employer of the person on behalf of or for the benefit of that person must be deemed—
(a)
(i) to be equal to the amount of the cash equivalent of the value of the taxable benefit contemplated in paragraph 2 (l) of the Seventh Schedule determined in accordance with paragraph 12D of that Schedule; or
(ii) if that amount is paid by an employer to a retirement annuity fund, to be equal to the amount of the cash equivalent of the value of the taxable benefit contemplated in paragraph 2 (h) of the Seventh Schedule determined in accordance with paragraph 13 of that Schedule; and
(b) to the extent that the amount has been included in the income of that person, to have been contributed by that person.

Tax policy dictates that deductions are only allowed from taxable income, and not from exempt income.

The underlined words in Section 11F(4)(b) were added with effect from 1 March 2024 to prevent deductions resulting from contributions to retirement funds being allowed against Foreign Employment Income that is exempt in terms of section 10(1)(o)(ii).

The wording and application of section 11F(4)(b) is confusing and they remain under discussion.

To acknowledge the difficulties, and to give support to payroll suppliers who must not apply the deduction provided for by sections 11F(1) and (2) against the portion of the remuneration that is fully or partially exempt in terms of section 10(1)(o()(ii), the following instruction has been added at the request of the PAGSA to the header of each of the relevant pages in the latest SARS PAYE BRS Version 23.0.0:

“Employee Remuneration Information:
Note: Where the phrase “foreign service income” is used in the description for the various codes, it means any amount received or accrued in respect of employment services rendered outside of the Republic. This applies to the codes for any amount received, including any allowances and taxable benefits. The full amount must be disclosed under the relevant foreign service income code, irrespective of whether a portion of that amount may qualify for exemption.“

SARS Notes on the changes in the BRS:
The changes include:
• New source code (3926) for the Withdrawal from a Retirement Fund from the Savings Component/Pot
• Amendment of descriptions and/or validation rules for –
o Unclaimed benefits (code 3909)
o Certificate number (code 3010)
o Directive number (code 3230)
o Directive income source code (code 3232)
o Transfer of Unclaimed benefits (code 3923)
o NED Directors / Audit Committee member fees (code 3620/3670)

The following link can be used to access the update PAYE BRS version 23.0.0:
https://www.sars.gov.za/wp-content/uploads/Docs/PAYE/BRS/SARS_PAYE_BRS-PAYE-Employer-Reconciliation_V23-0-0.pdf

Regards,
Rob Cooper