The following is the News flash 2022-30 published by the PAGSA regarding EasyFile release v 7 2 7
E@SYFILE RELEASE VERSION 7.2.7
SARS has released an updated version of the e@syFile software on Friday 9 June 2022.
The reason for the update is that an encryption certificate will expire in next week.
This certificate is required to be renewed annually to allow for updated encryption.
The release notes have been placed on the SARS Website during the course of Saturday.
The following is the News flash 2022-32 published by the PAGSA regarding SARS Notice 2022 Auto Assessments
SARS NOTICE: AUTO ASSESSMENT RULES FOR 2022
Payroll system functionality traditionally ends with the creation of tax certificate files for submission and reconciliation and does not extend into income tax assessments and related processes.
However, the notice from SARS outlining the latest auto-assessment rules is of direct importance for employees (taxpayers), and indirectly of importance for employers because in some cases, the auto-assessment might require tax certificates to be amended and re-submitted.
The SARS notice follows.
Dear Valued Stakeholder,
FILING SEASON 2022 – IMPORTANT INFORMATION: AUTO-ASSESSMENTS
This year SARS celebrates its 25-year anniversary.
Since our inception we, together with valued contributors to the economy such as yourself, have and continue to make a positive impact in the lives of South Africans. The tax we collect enables South Africans to access essential services and further provides government with the means to improve all our lives. We are not only celebrating our organisation’s anniversary but also your individual contribution to building a better South Africa through your continued tax compliance.
Our goal remains to make it easy for all taxpayers to meet their personal tax obligations. In doing so, we have issued auto-assessments to certain taxpayers, which can be accessed on eFiling or the SARS MobiApp.
Attached to this letter is an information sheet that explains everything one needs to know about the auto-assessment process. You can also visit our website at www.sars.gov.za for more information.
Sincerely,
THE SOUTH AFRICAN REVENUE SERVICE JUNE 2022
INFORMATION SHEET: AUTO-ASSESSMENTS
What is different this year?
This year we will again issue auto-assessments to taxpayers. However, we have made it much easier this year – if the taxpayer or their Tax Practitioner is in agreement with an auto-assessment then there is no need to “accept” the
assessment.
If the taxpayer or Tax Practitioner disagrees with the SARS auto-assessment, a tax return can be filed in the normal way with the additional information, within 40 business days of the date of the auto-assessment.
How does auto-assessment work?
As Tax Practitioners know, SARS receives 3rd party data from employers, medical schemes, banks, retirement annuity funds and others. We then use that data to calculate tax assessments. If we are satisfied that the data and tax calculation is correct, we issue the assessment via eFiling or the SARS MobiApp.
At the same time, we also send a message via a taxpayers preferred channel of communication (like SMS or email) to alert a taxpayer or Tax Practitioner of an assessment on eFiling or SARS MobiApp when it is ready to be viewed.
What must be done when an auto-assessment is received?
Log on to eFiling or the SARS MobiApp and view the assessment.
All data used to calculate the assessment will be available. If the taxpayer or Tax Practitioner is in agreement with the assessment, check if a refund is due or if tax is owed to SARS. If a taxpayer or their Tax Practitioner is not in agreement with the assessment, they can access the tax return via eFiling or SARS MobiApp, complete the return, and file it within 40 business days from the date that SARS issued the auto assessment.
How does a Taxpayer or Tax Practitioner know that the data is correct?
This year, for the first time, a taxpayer or Tax Practitioner can view data in detail, as follows:
1. Login onto eFiling
2. Select the “Third Party Data Certificate” search button on the menu bar 3
3. Submit / search any certificate that you wish to verify
4. Select the certificate type in question.
If there is an error on the data or the data is incomplete, the taxpayer or Tax Practitioner can correct it by doing two things:
1. The taxpayer must ask the institution that provided the data to SARS to correct it by sending updated data to SARS.
2. When the taxpayer receives the updated data, the taxpayer or Tax Practitioner must access the tax return on eFiling or the MobiApp, update the data on the tax return, and file the tax return via eFiling or the SARS MobiApp.
Will SARS select a taxpayer for verification or audit if auto-assessed?
No, SARS has already quality checked the auto-assessment and therefore if the taxpayer or Tax Practitioner agrees with this assessment, then this taxpayer will not be selected for verification or audit.
However, the taxpayer or Tax Practitioner must please make sure that the assessment is complete.
For example, if a taxpayer received rental income or other income or has deductions in addition to what we reflected in the auto-assessment, a taxpayer or Tax Practitioner must file a tax return with the information in addition to what we have already pre-populated on the tax return, within 40 business days of the date of the assessment.
In such a case, the taxpayer may possibly be selected for verification or, where appropriate, for audit.
It is therefore very important that taxpayers and their Tax Practitioners have supporting documents to substantiate any changes they want to make to the auto-assessment on hand when the return is filed.
What must a taxpayer or Tax Practitioner do if they do not agree with the auto-assessment?
There is no need to file an objection to the auto-assessment. Simply access the tax return via eFiling or MobiApp, complete the return, and file it via eFiling or MobiApp within 40 business days from the date on which SARS issued the auto-assessment. If one cannot file the tax return within 40 business days, one can request extension via eFiling or MobiApp.
We explain this in more detail below.
If we accept the updates in the tax return, we will issue a reduced or an additional assessment.
If we do not accept the updates in the tax return, we will inform the taxpayer or the Tax Practitioner of the reasons their updates are not accepted. If the taxpayer or Tax Practitioner disagrees with the reason(s) why we did not accept the updates in the tax return, then the normal objection and appeal facility will be available.
Can a taxpayer or Tax Practitioner ask for extension to file a tax return if they cannot file it within 40 business days?
Yes, a taxpayer or Tax Practitioner can apply for extension via eFiling or the SARS MobiApp. SARS can extend the 40 business days if we receive the request for extension before the expiry of the 40 business days, together with reasonable grounds. SARS can also extend the 40 business days after the expiry of the 40 business days if the taxpayer’s request is submitted to SARS within 21 business days after the expiry of the 40 business days, and if accompanied by reasonable grounds. SARS can also extend the 40 business days after the expiry of the 40 business days if a taxpayer’s request is submitted to SARS within 3 years after the expiry of the 40 business days, in exceptional circumstances.
Is the official Filing Season due date of 24 October 2022 for filing tax returns applicable to auto-assessed taxpayers?
Taxpayers who are part of the auto-assessment process and in agreement with the assessment, the due date of 24 October 2022 does not apply. However, if a taxpayer or Tax Practitioner is not in agreement with the auto-assessment, and want to file a tax return after 24 October 2022, the return will be considered late like any other 2022 tax return received after that date
The following is the News flash 2022-34 published by the PAGSA regarding SARS Notice Fixed Rate Directive rules
SARSNOTICE: FIXED RATE DIRECTIVE RULES AND INCORRECT FILE INFORMATION
SARS has released a notice with regards to the above.
The SARS notice follows below.
Dear Valued Stakeholder,
UPDATED PAR 2(2B) FIXED RATE DIRECTIVE RULES AND INCORRECT FILE INFORMATION
The South African Revenue Service (SARS) has revised the fixed rate directives issued under Par2(2B) of the Fourth Schedule to the Income Tax Act. The system has been updated with additional rules to ensure that the outcome targets the correct taxpayers and the correct fixed rates are prescribed.
Due to the updated rules that have been applied, some taxpayers may no longer meet the qualifying criteria for the issuing of a Par2(2B) fixed rate directive, resulting in a significant reduction in the number of impacted taxpayers compared to the last file issued.
The following qualifying criteria must be met for a taxpayer to qualify for inclusion in the fixed rate calculation under Par2(2B):
• Two or more retirement incomes with source codes 3603, 3610, 3611 and/or 3618
• If the taxpayer receives a remuneration e.g., salary source code 3601 with at least one retirement income.g., sourcecode 3603,3610,3611 and/or 3618
• If the sum of the remuneration exceeds the tax threshold.
Where the revised fixed rate directive file excludes the names of taxpayers included in the previous file, the administrator is required to revert to the PAYE rate—
• as per the PAYE deduction tables, or
• in terms of paragraph 2(2) of the Fourth schedule that is higher than the PAYE deduction tables.
However, where the revised fixed rate directive file prescribes a higher fixed PAYE rate than previously, the administrator must apply the higher fixed rate only from a current month and not backdated from 1 March/April 2022.
As advised in the latest directive letter, where the revised fixed rate directive file prescribes a lower fixed PAYE rate than previously, the administrator may reduce PAYE to be withheld for subsequent periods with amounts over-deducted in previous pay periods during the same year of assessment. The over-deduction in previous pay periods may be used to reduce the PAYE to be deducted in any of the subsequent pay periods.
In addition, we have noted and fixed the error which resulted in the taxpayer ID number and date of birth being incorrectly displayed. In this regard, the new files were already issued on 28 July 2022.
Issued on behalf of the Commissioner for the South African Revenue Service (SARS)
The following is the News flash 2022-35 published by the PAGSA regarding SARS easyFile Beta release testing 1st phase
e@syFile BETA Testing (1st phase)
SARS has issued a notice with regards to the testing of the updated e@syFile software (BETA version) application before its release to the general market in September 2022.
All online functionality has been disabled in order to prevent inadvertent submission of test data into SARS production environment, therefore, certain menu options have been disabled and the test application will default to offline mode as a failsafe.
Testing should commence tomorrow 16 August 2022 and be concluded on 15 September 2022 after which the testing window will close.
The link: The BETA test version was released and the build can be downloaded from the following link:
https://secure.offline.sarsefiling.co.za/PAGDownloadSite/BetaHome.xhtml
Please note that this link is confidential and only available to PAGSA full members for testing purposes. In order to protect its confidential status, SARS request that you do not share this link.
The BRS: The PAYE BRS for the Employer Interim Reconciliation submission period 202108 is available on the SARS website: PAYE BRS V21.1
Username & Password: The username and password will be sent to you when an SMS with your company name is received on (072) 680 8337.
Error reporting: Email the following details of the error to [email protected]
1. Make your description of the problem as short as possible, but good enough for SARS to understand the problem.
2. Add screen prints where necessary of the error to the email.
3. Add the CSV file where the error relates to the information supplied in a CSV file.
The following is the News flash 2022-36 published by the PAGSA regarding SARS easyFile Beta release testing 2nd phase
e@syFile BETA Testing (2nd phase)
The first BETA version for testing of the e@syFile software (BETA version) application before its release to the general market in September 2022, was released by SARS last week.
A new version of the BETA software was released on Friday. Please download the new version for testing purposes.
The BETA test version was released and the build can be downloaded from the following link: https://secure.offline.sarsefiling.co.za/PAGDownloadSite/BetaHome.xhtml
Username & Password: The login credentials are the same as that used for the previous BETA version.
Duruing the testing, members have identified the following issues:
ISSUE 1: A duplication of certain information was found on the printed version of the tax certificate. SARS Response: There is currently only one format for the certificate being generated that conforms to all submission channels (eFiling/E@syfile/Manual). This will be changed in the future to cater for each channel separately but due to time constraints will remain as is for this Filing Season.
ISSUE 2: The income tax reference number of the employee has always been mandatory, but employers were always able to submit without the income tax reference numbers (with a warnings). The field has now changed to be ‘conditional’ andmandatory in specific scenarios, whereas previous years it was just mandatory. The conditional scenarios provides errors if the certificate is an IT3(a). SARS Response: A new BETA build will be released asap to address this issue. Communication will be issued.
ISSUE 3: An error occurs in e@syFile if the employee has 4 directive numbers. If the employee has 3 or less directive numbers, or 5 directive numbers then there are no errors. This is only experience in cases where there is 4 directive numbers. SARS Response: SARS will investigate and advise soon.
Testing should be concluded on 15 September 2022 after which the testing window will close.
Error reporting: Please continue to email the errors to [email protected] as instructed in newsflash 35 of 2022.
The following is the News flash 2022-37 published by the PAGSA regarding Employment Equity Miscellaneous Matters
EMPLOYMENT EQUITY – MISCELLANEOUS MATTERS
The Employment Equity authorities are currently engaging the public in roadshows around the country. Their schedule is included in the annexure to this Newsletter, and they have invited PAGSA members to attend.
Despite their busy schedule, they have assisted the PAGSA by updating us on progress and clarifying some areas of the Employment Equity requirements that are not clear.
Employment Equity Amendment Bill -Status
This long-running amendment Bill was issued as a draft Bill in Gazette No. 41922 on 21 September 2018.
The PAGSA commented on the proposed changes at that stage, and again when more changes were made to the Bill over the years, the latest of which was published in December 2021.
The final Bill has now been approved by the National Council of Provinces and the National Assembly on 17 May 2022 but must still be promulgated (signed by the State President) and given an effective date before its requirements can be implemented.
My understanding is that before an effective date can be announced, the new sectoral targets (see the next section) that have been under discussion for more than a year must be finalised (there are 18 financial sectors and only one of them had been finalised by September 2021).
It stands to reason that the portion of the Bill that provides for sectoral targets cannot be implemented until the sectoral targets are issued in a Gazette that allows 30 days for comments and once finalised, are then published in a regulation.
I assume that parts of the EEA2 will be revised and published for comments as part of the same process.
There is no indication of when these processes will be completed but it is obvious that they will take some time.
In my opinion, the most practical time to make these changes effective is from the start of October, the first day of the ‘Equity Year’ (the 12-month period that employers report on every year) for most employers, but there is no certainty on this.
This would mean that the earliest starting date would be 1 October 2023.
However, another factor is that there is a possibilty that the ‘Equity Year’ dates are revised (see the PAGSA proposal in the last section of this Newsflash).
If our proposal is accepted and the ‘Equity Year’ dates are standardised, it would then make sense to align the effective date of the amendments with the starting date of the new ‘Equity Year’ as specified.
Lastly, the PAGSA has made the Equity authorities aware that we need sufficient time in which to change payroll systems and to implement the changes at clients.
Employment Equity Amendment Bill -Proposed Changes
Refer to PAGSA Newsflash 2019-55 for the details of the draft Bill at that stage, but there are two proposed changes that are repeated here because they are important for payroll suppliers:
1. The definition of a ‘designated employer’
2. The introduction of sectoral numerical targets.
Keep in mind that these changes are included in the final Employment Equity Amendment Bill, but that the Bill has not yet been promulgated and made effective. As matters stand, the current law must still be complied with.
Change to the definition of a Designated Employer
All employers must comply with the ‘Unfair Discrimination’ requirements of Chapter II of the EE Act, but only ‘designated employers’ as defined by the EE Act must comply with the ‘Affirmative Action’ requirements of Chapter III.
In a significant change that will reduce red tape for ‘smaller’ employers in future, the definition of a “designated employer” will be amended by the deletion of paragraph (b) that currently includes as a designated employer: “a person who employs fewer than 50 employees but has a total annual turn-over that is equal to or above the applicable annual turn-over of a small business in terms of the Schedule 4 of this Act;”
Once promulgated, designated employers will be defined as follows –
(a) a person who employs 50 or more employees;
(b) a municipality, as referred to in Chapter 7 of the Constitution;
(c) an organ of state as defined in section 239 of the Constitution, but excluding the National Defence Force, the National Intelligence Agency and the South African Secret Service; and This means that once the changes are made effective that all employers with less than 50 employees will be excluded from Chapter III (‘Affirmative Action’) and will no longer have to submit an annual Equity plan.
Note that employers that in future will no longer be designated once the changes are made effective and that then do not have to comply with the ‘Affirmative Action’ requirements of Chapter III of the Employment Equity Act, must still comply with the ‘Unfair Discrimination’ requirements of Chapter II of the Act.
To obtain an Employment Equity Compliance Certificate for state tenders, all employers (both designated and notdesignated) must comply with the National Minimum Wage Act and with the ‘Unfair Discrimination’ requirements of Chapter II of the Employment Equity Act.
Designated employers must in addition submit annual employment equity plans and be seen to be making progress against the targets and goals specified in those plans to be eligible to be granted a Compliance Certificate.
Section 15A (Establishment of Sectoral Targets)
The purpose of introducing the sectoral numerical targets is to move away from the current general targets by focusing on targets tailored for the specific characteristics of each sector to achieve: “the equitable representation of suitably qualified people from designated groups at all occupational levels in the workforce by designated employers”.
Section 15A has been added to the EE Act to provide for numerical targets for any sector as follows: 4. The following section is hereby inserted after section 15 of the principal Act: “Determination of sectoral numerical targets 15A. (1) The Minister may, by notice in the Gazette, identify national economic sectors for the purposes of this Act, having regard to any relevant code contained in the Standard Industrial Classification of all Economic Activities published by Statistics South Africa.
(2) The Minister may, after consulting the relevant sectors and with the advice of the Commission, for the purpose of ensuring the equitable representation of suitably qualified people from designated groups at all occupational levels in the workforce, by notice in the Gazette set numerical targets for any national economic sector identified in terms of subsection (1). (3) A notice issued in terms of subsection (2) may set different numerical targets for different occupational levels, sub-sectors or regions within a sector or on the basis of any other relevant factor.
(4) A draft of any notice that the Minister proposes to issue in terms of subsection (1) or subsection (2) must be published in the Gazette, allowing interested parties at least 30 days to comment thereon.”.
As required by section 15A, the Minister of Employment and Labour will publish a notice in the Gazette identifying national economic sectors for the purposes of the Employment Equity Act, having regard to the code structure contained in the Standard Industrial Classification of all Economic Activities published by Statistics South Africa.
This notice may set different numerical targets for different occupational levels, or regions within a sector, or on the basis of any other relevant factor.
Application of the new Sectoral Targets in Practice
Prior to the release of the sectoral targets and being able to evaluate them, it appears that these targets are intended to be applied to the workforce profile (the EEA2). In response to my query the Equity Directorate confirmed this: “The Sector EE targets will only affect the composition of the workforce/ employees covered and reported in EEA2 Report – the EEA4 covers the remuneration paid to the employees/ workforce covered in the EEA2.
This means that once released, the new sectoral targets will influence the EEA2 Workforce Profile plans (the employer’s ‘headcount’ numbers). The results over the years will be measured against the employer’s EEA2 5-year plan and each year will be reflected in financial terms in the EEA4 tables.
The intention is that all current equity plans will fall away when the new requirements are made effective, and the new plans will have to be aligned with five-year targets.
At the moment there are more questions than answers on the practical aspects of the implementation of the new sectoral targets, so we have asked the equity authorities in advance to prepare a Guide to assist employers.
What are the Submission periods for the EEA2 and EEA4 Reports?
THE EEA2 STATES: WHEN SHOULD EMPLOYERS REPORT? Designated employers must submit their report annually on the first working day of October or by 15 January of the following year in the case of electronics reporting.
THE EEA4 STATES: WHEN SHOULDEMPLOYERS REPORT? Designated employers must submit their report annually at a Depaftment of Labour office on the first working day of October for immediate capturing or by 15 January of the following year for online reporting.
The highlighted word “on” is misleading – it should be “by”.
The concepts that follow are identified by abbreviated descriptions of concepts that are short and clear to assist clear communication. You won’t see these short terms in the legislation or the regulations, but the equity authorities are comfortable with their use.
The following concepts have been clarified recently:
1. ‘Equity Year’:
• Is the reporting year declared by the employer at the top of page 2 of the EEA2
• Is the 12-month period in which employee data is consolidated and analysed for submission of the EEA2 to the Equity Directorate
• Varies from employer to employer for historical reasons but in many cases, it is a year starting 1 October and ending 30 September of the following year.
2. ‘Equity Submission Period’:
• The period during which the EEA2 and EEA4 reports must be submitted by the employer
• This period opens on 1 September for both manual and online submissions, and
• Closes on 1 October for manual submissions, and
• Closes on 15 January of the following year for online submissions.
The Equity authorities agree that the submission period dates that are specified under the second point are correct.
Problems in Practice
The ‘Equity Year’ varies between employers for historical reasons, but it appears that many employers have an ‘Equity Year’ of 1 October to 30 September of the following year.
An ‘Equity Reporting Year’ of 1 October to 30 September of the following year, coupled to the manual submission dates that open on 1 September and close on 1 October, means that:
1. The employee data in the payroll in respect of September that is only finalised towards the end of September in the payroll means that on the opening date of 1 September the employee data in the payroll is incomplete and therefore inaccurate, and
2. If the employer waits until the end of September for the employee data to be complete and accurate, then there are at best only a couple of days in which to create the report and submit it manually before the closing date of 1 October.
My understanding is that if the employer’s ‘Equity Year’ is 1 November 2022 to 30 October 2023, the manual reports will then be submitted between 1 Sep 2024 and 1 Oct 2024 because they are too late for the 2023 reporting year.
Similar scenarios could be set up around the 15 January closing date. The other problem is that because employers have different ‘Equity Years’, the 12-month period reported on will include different periods of the year for different employers. As a result, the equity statistics for a year can be a ‘scrambled egg’ scenario resulting from different influences and events during the different 12-month periods.
The Covid hard lockdown period in 2020 is a classic example (hopefully not repeated).
The full Covid period fell into the ‘Equity Year’ for some employers, while only portions of the Covid period were included in other employer’s reports. The differences in the years being reported distorts the comparative statistical value of the equity reports for that year – apples are not being compared to apples.
PAGSA Proposal to Equity Directorate
Without going into too much detail, the PAGSA has submitted a proposal to the Equity authorities:
• To specify a single standard ‘Equity Year’ for all employers, and
• To align this ‘standard’ year with the tax year (1 March to 28 February).
The opening and closing dates for submissions could be the same as for tax certificates and the Return of Earnings for the Compensation Fund (1 April to 31 May) or alternatively the closing date could be extended by another month to give employers more time.
If this proposal is accepted by the Equity authorities, the earliest date of implementation would be 1 March 2023 (a more realistic effective date would be 1 March 2024), and ‘transition’ rules will have to be put in place to manage the change from the old equity year to the new ‘standard’ equity year if the dates are not the same.
The following is the News flash 2022-38 published by the PAGSA regarding the Company Tax SARS notice on Supplementary IT14SD form
COMPANY TAX: SARS NOTICE ON SUPPLEMENTARY IT14SD FORM
SARS has issued a notice with regards to the “Removal of the supplementary IT14SD form” when a company submits its income tax returns.
The notice can be found below.
Dear Taxpayer
CORPORATE INCOME TAX (CIT): REMOVAL OF THE SUPPLEMENTARY DECLARATION FOR COMPANIES OR CLOSE CORPORATIONS (IT14SD) FORM: 16 SEPTEMBER 2022
From 16 September 2022 SARS will no longer require you to submit the Supplementary Declaration for Companies or Close Corporations (IT 14 SD) when identified for a verification.
The requirement to submit an IT14SD when a verification case is created will be replaced by a letter requestng specific relevant documents based on the reason for verification.
What does this mean?
– When a company is identified for verification, you will be notified of the verification (the current norm) and will be requested to submit specific relevant documents based on the reason for the verification, or to submit a revised Corporate Income Tax (1 TRI 4 return, by doing a request for correction (RFC).
– You still have the option of submitting one correction, which may or may not resolve tie verification
– The revised ITR14 will also be subjected to a risk evaluation.
– To comply, you need to upload the requested documents using eFiling, or any other submission channel, including SARS Online Query system (SOQS). The uploading of the relevant documents wi enable a SARS verifier to action the case. If the relevant documents are deemed insufficient, or additional documents are required, this will be requested from you.
– You are still required to provide the relevant documents within 21 working days
– If you still do not comply with the request for relevant documents, SARS will raise a revised assessment to resolve the verification case, and will add back the related expenses, dependent on the specific relevant documents requested.
– Note: The verification of a company always requires the submission of a signed set of Annual Financial Statements (AFS), as well as a detailed Tax Computation and the underlying supporting documentation/schedules (e,g., Tax pack)
What remains the same?
– All correspondence will still be issued as before, and you will still be required to submit the relevant documents within 21 working days. The IT14SD will not be required to be submitted any longer, and the submission of specific relevant documents will be required. The process of dealing with the verification case will rennin the same.
– The requirement to submit relevant documents upon submission of the ITR14 will remain the same.
In preparation for the removal Of the IT14SD and the introduction Of risk-specific letters, the following should be noted:
– If the IT14SD (before the implementation of this project) has already been submitted, the verification will be dealt with using the IT14SD. If a letter is received for the submission of relevant documents, or additional relevant documents, those documents also need to be submitted.
– If the IT14SD has not been submitted yet (before the implementation of this project), a letter will be issued requesting the submission of specific relevant documents, and the requirement to submit the IT14SD will fall away. For example, if a company was identified for verification two years ago, and never submitted the IT14SD, relevant documents will be required to be submitted.
– Note: As of the date of this letter, you will not be required to submit any outstanding IT14SDs Should you receive any further notification or final demand letter to submit your IT14SD, please ignore such request.
We continue to work tirelessly to modernise our systems and processes to provide digital and streamlined services, We are committed to building a smart, modern SARS with unquestionable integrity, We believe these changes will contribute to making it easy to comply and to providing clarity and certainty for taxpayers to meet their tax obligations.
More Information
Should you have any queries, please contact your SARS-dedicated stakeholder management representative, your dedicated relationship manager, or visit the SARS website on www.sars.gov.za
Sincerely
THE SOUTH AFRICAN REVENUE SERVICE
30 August 2022
The following is the News flash 2022-42 published by the PAGSA regarding the SARS Notice – Auto Registration
SARS NOTICE: AUTO REGISTRATION OF INDIVIDUALS
SARS are taking steps to automatically register all individuals for Personal Income Tax if according to third party information available to, there is an indication of economic activity, and the individual is not registered.
This strong action is taken in terms of section 22(5) of the Tax Administration Act that states: “Where a person that is obliged to register with SARS under a tax Act fails to do so, SARS may register the person for one or more tax types as is appropriate under the circumstances or for purposes of section 26 (3).”
SARS Notice
PERSONAL INCOME TAX: AUTO REGISTRATION WILL BE INITIATED FROM OCTOBER 2022
As the South African Revenue Service (SARS) celebrates its 25th anniversary, we are committed to improving our service offering and enhancing our systems and processes to make compliance easy and seamless.
Who can be auto registered?
Automatic registration will be initiated for Personal Income Tax for an individual that is not registered for tax, but SARS detects 3rd party data that indicates economic activity. The person is automatically registered by SARS in terms of section 22(5) of the Tax Administration Act (Act No. 28 of 2011 as amended).
Registration for other tax products
Please note that this registration is for Personal Income Tax (PIT) purposes only. If the auto-registered taxpayer is a sole proprietor, he or she may have to register for other tax products like PAYE for an employer, Value Added Tax for a vendor, and Customs and/or Excise if they are a trader in that field.
Notification to the auto-registered taxpayer
SARS will send an SMS and a letter to such an individual, officially welcoming them as a registered taxpayer and informing them of how to access our services and what their rights and obligations are.
What is next after registration?
It is important for newly registered taxpayers to register for eFiling, as this is the most efficient way to file a tax return, view assessment results, make payments, and manage many other tax matters.
More Information
More details regarding our channels, office hours, services, tailored information regarding Personal Income Tax, as well as a comprehensive FAQ repository are available on the SARS website: www.sars.gov.za
Sincerely,
THE SOUTH AFRICAN REVENUE SERVICE
29 September 2022
TERS
TERS benefit is a benefit payable under the UIF Act, and will thus qualify for exemption under section 10(1)(mA) of the Income Tax Act, and is therefore not subject to the deduction of PAYE, SDL or UIF.
The employer is ONLY an intermediary who receives the benefit NOT for its own beneficial use, but for the beneficial use of its employees, so there is no “received” for gross income purposes in the hands of the employer (no accrual either), and there is therefore no obligation for the employer to issue or include the benefit on an IRP5/IT3(a) certificate.
No new IRP5 code or payroll code is therefore required for purposes of the COVID 19 TERS benefit due to the fact that the employer ONLY acts as an intermediary and that these benefits is NOT remuneration.
As it is not remuneration, it is not part of the remuneration figures reported for UIF purposes.
VAT
VAT on company vehicles
Interpretation Note 72 states that any VAT borne by the employer must be included in the determined value of the vehicle. It goes further by explaining what VAT borne means… by saying that if VAT was applicable the employer was not entitled to an input tax credit for the related VAT.
It further stats that the VAT component must be excluded if the employer was entitled to a deduction of VAT input tax (registered VAT vendor).
This means that if the employer (VAT vendor) bought a bakkie that qualifies for input VAT credit, then the determine value will exclude the VAT.
If a non-VAT vendor bought this bakkie, he did not claim the input VAT credit, therefore, the determine value will include VAT.
In other words, if he borne the VAT, he would not claim it as input VAT credit. If he claims it as input VAT credit, he did not borne the VAT.
The extraction from the IN72 is copied below:
Even with wear and tear deductions, the value to be used is excluding VAT if the VAT was not borne by the employer and vice versa.
