Tax season 2023 has arrived, with dates, revisions, and all you need to know

Tax season 2023 officially begins this Friday (7 July), but the South African Revenue Service (SARS) has already begun, with taxpayers receiving auto-assessment notices at the beginning of the month. As the season begins, individuals and businesses must be prepared to comply with new restrictions and rules. “While following SARS guidelines can feel like a burden at times, it is absolutely necessary to avoid potential penalties or complications,” says Danielle Luwes, a tax manager at tax specialist firm Hobbs Sinclair.

“Becoming acquainted with SARS’ requirements, such as submission deadlines, payment due dates, and specific fields for accurate income declaration, will assist in ensuring a smooth tax filing process.”

The following are the tax submission deadlines for the 2023 tax season:

•   Non-provisional taxpayers filing electronically or manually:
     Opening time: 7 July 2023 at 20h00   |   Closing date: October 23, 2023
•   Provisional filers who file electronically:
     Opening time: 7 July 2023 at 20h00   |   Closing date: January 24, 2024
•   Provisional Trusts and other legal entities (such as boards or bodies):
     Opening time: 7 July 2023 at 20h00   |   Closing date: January 24, 2024
•   Tax returns for corporations:
     12 months from the end of the fiscal year

For non-provisional eFilers, payment due dates have been adjusted as follows:
•   Taxpayers who are not subject to auto-assessment: Payment is due 30 days after the assessment notification is issued.
•   Auto-assessed taxpayers: Payment is due 30 days after the end of the filing season in 2023.
•   Non-provisional taxpayers in South Africa have simple tax affairs based on a basic monthly salary and are not required to make provisional tax payments.

Provisional taxpayers (such as freelancers) have more complicated tax situations and must make projected tax payments throughout the tax year, typically because their taxable income is not drawn primarily from one source of employment.

“It is essential for taxpayers to be aware of the submission deadlines to ensure timely and accurate filing of their tax returns,” Luwes said of the above deadlines and requirements. Failure to meet these dates may result in SARS levying fines.”

How to Sign Up
According to SARS, as order to best ensure compliance with income tax regulations, a taxpayer must first register for income tax. When South Africans attempt to register for SARS eFiling, the online platform where consumers may conduct tax-related tasks, they may be automatically registered for personal income tax.

A person desiring to register can alternatively do so through their company through SARS eFiling, where an employee is assigned a tax reference number. A person can also go to a physical branch to speak with a service representative.

If you are unsure whether you are already registered, SARS says you can check with your employer, utilize the SARS online Query option, or phone our SARS Contact Centre at 080 000 7277. According to SARS, you can also send an inquiry asking a notice of registration (IT150) that includes your tax reference number.

Submission
Following registration, taxpayers must file an annual income tax return with SARS in accordance with the Gazette. “Every year, SARS announces its Tax Season, which is the time when you must complete and submit your annual income tax return.” Individuals must file an income tax return known as the ITR12 (Personal Income Tax Return),” according to SARS. The complete list of tax rates maintained by SARS may be found here.

Beginning July 7, 2023, at 20h00, taxpayers will be able to view their tax returns via eFiling or the SARS MobiApp to complete and file them online. Those who are unable to file online must schedule a visit to a branch. To precisely assess tax responsibilities, it is critical to have all necessary tax certificates, such as IRP5/IT3(a), medical aid, and retirement annuity fund. However, it is critical to determine whether you have already been auto-assessed by SARS before completing and submitting an ITR12 (sample document attached at the bottom of this post).

Auto Evaluation
Auto Assessments are a recently implemented SARS method in which a person is not needed to file an income tax return if they are told that they are qualified for the assessment. If their auto-assessed gross income, exemptions, deductions, and refunds are correct, taxpayers do not need to take any action. Auto inspections will begin on June 30, 2023.

“If any corrections are required, a request for correction must be submitted within the specified timeframe of 40 business days.” “Failure to do so may result in the auto assessment becoming final,” Luwes explained.

Things that may differ from the past
Provisional taxpayers with business interests, according to Hobbs Sinclair, must register their assets and liabilities at cost. “Taxpayers falling into this category with assets exceeding R50 million are required to declare specified assets at market values on their 2023 tax returns,” Luwes explained.

Furthermore, individuals must now accurately report their overseas income. SARS has escalated its efforts to tighten down on foreign funding. According to Luwes, the tax office has added three new categories to appropriately declare overseas employment services income taxed outside of South Africa.

Half of the interest, dividends, rental income, and capital gains earned by taxpayers married in a community of property are taxed. “SARS worked with the Department of Home Affairs to confirm marital status and recover the ‘Married in Community of Property’ status from previous declarations.” “If both spouses are successfully matched and have interest investments, SARS will replicate the interest investment certificate on both spouses’ returns, ensuring a fair assessment of 50% taxation,” Luwes added.

Taxpayers who are exempt from filing a return
In its latest Tax report, financial services firm PwC outlined a few scenarios in which a taxpayer is not required to file a tax return. According to the group, a natural person – or the estate of a deceased person – is not necessarily needed to file an income tax return if their gross income includes one of the following:

•   Employees’ tax has been withheld in relation of salary not exceeding R500,000 from a single source.
•   Interest income from a South African source (excluding a tax-free investment) that does not exceed R23,800 for a person under               65, R34,500 for a person 65 or over, or R23,800 for a deceased person’s estate;
•   Dividends where the individual was a non-resident for the entire fiscal year;
•   Income or capital gains from tax-free investments
•   A single lump amount paid from a pension fund, provident fund, pension preservation fund, provident preservation fund, or retirement annuity fund, with tax deducted in accordance with a tax directive.

These exemptions, however, do not apply to persons in the following situations, for example, if a person is:

•   paid or granted specified allowances/advances for business travel, housing, or subsistence;
•   granted taxable benefits for the use of a motor vehicle; or
•   any money received or accrued for services rendered outside South Africa.

ITR12
Here’s an example of a personal income tax form to fill out:

Kind Regards

CPI Payroll Support Team

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