Category Archives: SARS

Goods and services acquired by VAT vendors on credit

It is an established principle that registered VAT vendors may claim a deduction for input tax on goods or services acquired for use in the course of making taxable supplies as part of carrying on an enterprise.[1] For example, a VAT vendor purchases trading stock from another vendor for the purpose of sale to its clients subsequently. Once those goods are purchased by the VAT vendor, even if on credit, input tax may generally be claimed on the goods purchased.

Where the VAT vendor above buys the goods on credit, the input tax claimed may effectively be reversed if payment to the creditor is not forthcoming timeously. In terms of section 22(3) of the VAT Act, where the consideration for the purchase of goods have not been paid by the VAT vendor to its supplier within 12 months of it buying the goods, a portion of the input tax claimed must be effectively reversed and paid over to SARS as output VAT. In other words, where a VAT vendor has claimed input tax, but has not yet settled the amount due to the person providing it with those goods or services in respect of which the input tax is claimed, the input tax claim will be effectively cancelled.

Although it may appear to be a trivial matter to most, the question does become relevant where goods or services are supplied between related persons or entities, such as group companies for instance. When “payment” is made for purposes of the VAT Act has recently been considered in the case of XYZ Company (Pty) Ltd v CSARS.[2] In that case a VAT supply was made between a holding company and its subsidiary, with the amount owing subsequently being moved from the debtors’ book to the loan account which the subsidiary company had in place with the holding company. SARS contended that the purchase price remaining outstanding on loan account has not yet been paid by the subsidiary, and therefore the input tax claimed by the subsidiary had to be accounted for as output tax after 12 months of the supply taking place.

The Tax Court however differed and attributed a wide meaning to the word “paid”. It held that the action of transferring the debt due from the debtors’ book to the loan account of the parties amounted to the payment of the debt arising from the supply. The holding company acquired a new right with new terms, being those linked to the newly created loan account and which differed from the trade debt, even though the counter-party was unchanged. Payment, in a wide sense, is not limited to cash flow only, but also include an exchange and creation of new rights and obligations.

While the judgment deals specifically with the context of section 22(3), a consideration whether amounts have been “paid” or not are not limited to this provision only and the effect thereof may extend wider to other provisions of the VAT Act too, the provisions of section 16(3) – which deal with input tax claimed on second hand goods acquired – being a pertinent example.

References:

[1] Section 17(1) of the VAT Act, 89 of 1991

[2] Case No.: VAT 1247, 5 September 2016 (Cape Town)

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.  Errors and omissions excepted (E&OE)

Threshold registration requirement for the skills development levy

We have recently become aware of an increased level of audits being conducted by the South African Revenue Service in relation to taxpayers’ obligations in terms of the Skills Development Levies Act, 9 of 1999 (SDL Act). The focus appears to be specifically on non-compliant taxpayers who fail to register as required in terms of section 5 of the SDL Act, and thus for these employers to pay the requisite levy over to SARS. The problem is perhaps amplified thereby that the skills development levy is often considered an ‘unimportant’ tax by taxpayers (primarily due to it being less costly compared to, for example, VAT or income tax). Compliance with the SDL Act is therefore not a top priority to taxpayers, with the effect that taxpayers are also not apprised of their rights and obligations in terms of this Act when confronted by SARS to register and settle an ostensible skills development levy obligation.

The skills development levy (or SDL) is a levy upon employers required to register for SDL (see registration requirement below). It is levied at 1% of remuneration paid to employees during any month (which include directors of a company). The levy is thus also applicable to directors’ remuneration.

Even though directors’ remuneration is also subject to the SDL, what should not be forgotten, though, (especially in the context of what appears to be the focus of SARS’ audits) is that directors’ remuneration is excluded in terms of section 3(5)(e) from determining whether the threshold amount of R500,000 has been reached and which requires registration for SDL purposes (see section 4(b)).

As above, even though the threshold limit for registering for SDL is R500,000 of remuneration paid (or reasonably expected to be paid to employees in the coming 12 months), the R500,000 threshold amount is determined for private companies without having regard to any directors’ remuneration paid. Therefore, although the directors’ remuneration will be subject to SDL once the company is registered, it is ignored for purposes of determining whether a taxpayer is liable, and thus required to register, for SDL.

This is particularly relevant for SME’s conducting business through a private company, especially where remuneration is comprised largely of directors’ salaries. To give an example in illustration: assume a private company pays salaries to non-directors of R400,000, and R1,000,000 to the two directors of the company collectively. On these facts, the company need not register and pay SDL as non-director salaries amount to less than R500,000. Were the company, however, to pay salaries to non-directors of R600,000, then irrespective of the directors’ remuneration, the company would need to register for SDL and pay 1% per month on the total remuneration paid to all employees (including directors).

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Passive income and SARS

Have you ever investigated passive income opportunities to earn extra money? Did you consider the effect that earning additional income might have on your current income tax liability? If your income increases, whether from a passive income source or otherwise, SARS will soon come to the party to claim its share of your profits. Do you know what the effect of earning passive income might be on your present tax situation? If not, do read the rest of this article.

What is passive income?

Passive income is money you earn now which you didn’t have to work for now. However, you did work for it when you set up your source of passive income in the past.

If you set up your passive income source correctly, it will continue to generate income with either a minimum or no presence from you as the business owner. That’s what makes passive income so attractive: there’s no direct link between the number of hours you work and/or must be present in the business, and the amount of money you can make.

Provisional tax considerations

A taxpayer will not be required to submit provisional tax returns if his/her only source of income is remuneration from their employer and the employer deducts PAYE on a monthly basis from such remuneration.

PAYE can only be deducted by an employer from remuneration paid to its employees. If you earn passive income which is not subject to PAYE, you will have to submit provisional tax returns. Provisional tax is calculated on the estimated taxable income for a specific tax year. Please consult your tax adviser for advice regarding any potential provisional tax obligations.

Income tax considerations

As with any type of business income, passive income will be subject to income tax. SARS will allow a taxpayer to deduct the expenses incurred in generating the passive income, provided that the expenses are tax deductible in terms of income tax legislation. A taxpayer earning passive income will thus be taxed on the resulting profit (passive income less expenses incurred to generate that passive income).

For an expense to be tax deductible against passive income, it must fulfil all the following requirements:

  • It must have been actually incurred (i.e. the expense must either have been paid already or be due and payable);
  • In the carrying on of any trade;
  • In the production of passive income (there must be a link between the expenditure and the passive income); and
  • Not be of a capital nature (i.e. the expense must not give rise to an enduring/long term benefit).

If you are not sure whether an expense will be tax deductible and/or at which amount, please consult your tax adviser for advice.

Dual-purpose expenses (i.e. expenses that were incurred both for business and private purposes at the same time) may be apportioned according to the ratio of the business-related portion to the total amount of the expense. Only the business-related portion of the total expense will be tax deductible.

The profit you earn as a result of your passive income venture will be added to your taxable income for a specific tax year. If you already earn income from another source (e.g. salary/wages), that income and the profit from passive income will be added together to determine your taxable income. Taxable income will thus increase, which might put you into a higher tax bracket with a higher tax percentage.

To avoid nasty surprises it is important to consider the income tax implications of a passive income opportunity before taking advantage of such an opportunity. Although the figures you use for the calculations will be estimates and might not be that accurate, it’s still better to do some semi-accurate calculations than no calculations at all.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Reference List:

Accessed on 3 September 2015:

Accessed on 9 September 2015:

Die berekening van rente betaalbaar tussen belastingbetalers en die SAID

A5Die Wet op Belastingadministrasie (Engels: Tax Administration Act of TAA) skryf algemene beginsels voor wat toegepas moet word wanneer rente aan of deur die SAID betaalbaar, bereken word. Die doel hiervan is om ‘n meer regverdige en uniforme manier van renteberekening daar te stel vir beide belastingbetalers en die SAID. Soos met die meeste dinge is daar egter uitsonderings. Hierdie artikel bespreek die algemene rentebepalings en sekere uitsonderings.

Die volgende algemene konsepte word neergelê vir die berekening van rente betaalbaar tussen belastingbetalers en die SAID:

  1. Rente is vergoeding vir ‘n verlore geleentheid om geld te gebruik.
  2. Rente sal daagliks bereken word op die uitstaande bedrag en rente op rente word maandeliks bereken.
  3. Rente loop op vanaf die effektiewe betaaldatum tot die werklike betaaldatum van ‘n uitstaande bedrag. Die effektiewe betaaldatum is die datum waarop belasting verskuldig en betaalbaar raak volgens ‘n belastingwet.

Die volgende afdeling verduidelik vier van die uitsonderings op die algemene konsepte hierbo:

  • Terugbetalings deur die SAID

Indien die SAID ‘n terugbetaling aan ‘n belastingbetaler moet maak, word rente op die terugbetaling bereken vanaf die datum waarop die SAID die bedrag ontvang het wat terugbetaal moet word, tot op die datum wanneer die SAID die terugbetaling aan die belastingbetaler maak.

Waar die SAID ‘n terugbetaling teen ander belasting verskuldig deur die belastingbetaler verreken, word geag dat die terugbetaling gedoen is op die verrekeningsdatum.

  • Voorlopige belasting

In die geval van die verpligte eerste voorlopige belastingbetaling is die effektiewe datum die laaste besigheidsdag van die sesde maand na die einde van die belastingjaar. Rente sal bereken word vanaf die effektiewe datum, tot die betaaldatum of die effektiewe datum van die tweede voorlopige belastingbetaling, watter datum ookal eerste voorkom.

Vir die tweede voorlopige belastingbetaling (ook verpligtend) is die effektiewe datum die laaste besigheidsdag van die belastingjaar. Rente word bereken vanaf die effektiewe datum tot een van die volgende datums, watter een ookal eerste voorkom: die werklike betaaldatum of die effektiewe datum (soos voorgeskryf) van die opsionele derde voorlopige belastingbetaling.

  • Vertraagde BTW-terugbetalings

Geen rente word bereken op die tydperk van die vertraging van die terugbetaling indien die vertraging deur die belastingbetaler veroorsaak is nie. Die tydperk van ‘n vertraging word vasgestel vanaf die datum waarop die belastingbetaler verlangde inligting by die SAID moes indien (bv. bankdetails van die rekening waarin die SAID die terugbetaling moet maak) tot die datum waarop die belastingbetaler werklik die vereiste inligting indien.

  • Bedrae per abuis terugbetaal

Indien die SAID per abuis ‘n terugbetaling aan ‘n belastingbetaler maak, word die terugbetaling beskou as belasting wat verskuldig en betaalbaar is deur die belastingbetaler. Rente sal op die terugbetaling bereken word vanaf die datum waarop die SAID foutiewelik die terugbetaling gemaak het tot die datum waarop die belastingbetaler die bedrag aan die SAID terugbetaal.

‘n Senior beampte van die SAID mag opgelegde rente kwytskeld indien hy/sy tevrede is dat die rente gehef is weens omstandighede buite die beheer van die belastingbetaler. Daar is slegs drie gevalle waar omstandighede beskou mag word as buite die beheer van die belastingbetaler: ernstige siekte of ongeluk, natuurlike of mensgemaakte rampe, of burgerlike oproer of ontwrigting van dienste.

Die Wet op Belastingadministrasie poog om voorsiening te maak vir ‘n gelyke aantal dae waarop rente betaalbaar tussen belastingbetalers en die SAID bereken word, en om uniforme reëls vir die berekening van rente van toepassing te maak op al die soorte belasting wat deur die SAID geadministreer word.

Verwysingslys:

Toegang tot die volgende bron is verkry op 21 Junie 2015:

  •  SARS Kort Gids tot die Wet op Belastingadministrasie, 2011 (Wet Nr. 28 van 2011), Hoofstuk 12

Hierdie artikel is ʼn algemene inligtingsblad en moet nie as professionele advies beskou word nie. Geen verantwoordelikheid word aanvaar vir enige foute, verlies of skade wat ondervind word as gevolg  van die gebruik van enige inligting vervat in hierdie artikel nie. Kontak altyd ʼn finansiële raadgewer vir spesifieke en gedetailleerde advies. (E&EO)

 

The calculation of interest due between Taxpayers and SARS

A5The Tax Administration Act (TAA) introduces general principles to be applied when calculating interest due to or due by SARS. The aim is to create a fairer, more uniform calculation of interest for both the taxpayers and SARS. As with most things in life, there are exceptions. This article will discuss the general interest rules and some of their exceptions.

The following general concepts are laid down for the calculation of interest due between taxpayers and SARS:

  1. Interest is compensation for the lost opportunity to use money.
  2. Interest will be calculated daily on the outstanding balance and compounded monthly.
  3. Interest accrues from the effective payment date until the actual payment date of an outstanding amount. The effective payment date is the date when a tax becomes due and payable under a tax Act.

The following section explains four of the exceptions to the general concepts above:

  • Refunds due by SARS

If SARS must refund a taxpayer, interest on the refund is calculated from the date that SARS receives the excess amount which must be refunded to the date that SARS pays the refund to the taxpayer.

Where SARS sets off a refund against other tax owing by a taxpayer, the deemed date of payment of the refund is the set off date.

  • Provisional tax

In the case of the compulsory first provisional tax payment the effective date is the last business day of the sixth month after the end of the tax year. Interest will be calculated from the effective date, until the payment date or the effective date of the second provisional tax payment, whichever of the latter two comes first.

For the second provisional tax payment (also compulsory) the effective date is the last business day of the tax year. Interest is calculated from the effective payment date until the earlier of the actual payment date or the effective date (as prescribed) of the optional third provisional tax payment.

  • Delayed VAT refunds

No interest will be calculated on the refund for the period of the delay if the delay is caused by the taxpayer. The period of the delay is determined from the date that the taxpayer was required to submit information to SARS (e.g. bank details for the account into which SARS must pay the refund) until the date by which the taxpayer actually submitted the requested information.

  • Amounts refunded by mistake

If SARS refunds a taxpayer by mistake, the refund is deemed to be tax due and payable by the taxpayer. Interest will be calculated on the refund from the refund date until the date that the taxpayer pays the refund back to SARS.

A senior SARS official may remit imposed interest if he/she is satisfied that the interest was imposed as a result of circumstances beyond the taxpayer’s control. There are only three cases where circumstances might be regarded as beyond the control of the taxpayer: serious illness or accident, natural or man-made disaster, or civil disturbance or disruption of services.

The TA Act strives to provide for an equal number of days to be used for calculating any interest due between taxpayers and SARS, and to create an opportunity to apply the same rules for the calculation of interest on all the different types of tax administered by SARS.

Reference List:

Accessed on 21 June 2015:

  • l SARS Short Guide to the Tax Administration Act, 2011 (Act No. 28 of 2011), Chapter 12

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

I stole money: Must I pay income tax on it?

A3Ever heard of a thief declaring stolen money for income tax purposes? Do you think thieves should declare stolen money as part of their taxable income? According to numerous court cases on this issue, stolen money obtained by way of theft, embezzlement or fraud is taxable in the hands of the thief. Another question: can costs incurred for the purpose of stealing and any refunds of the stolen money be deducted from the stolen income?

There are four requirements that must be met for stolen money (whether obtained by way of theft, embezzlement, fraud or any other illegal means) to be taxable in the hands of a thief:

  1. The money must have been “received by or accrued to” the thief.

The phrase “received by” has been interpreted by the courts to mean that the money has been “received by a taxpayer on his own behalf for his own benefit” while the words “accrued to” has been interpreted to mean “to which the taxpayer has become entitled”. For a person to be entitled to an amount of money, does not require the person to have received that amount, but it does require that the person has an unconditional right to receive it. As a thief is not entitled to the money he/she steals, the requirement of “accrued to” is not complied with. However, as the money has been received, the first requirement is met and the stolen money must be included in the taxable income of the thief.

  1. The money received by the thief must be of an “income nature” (as opposed to being of a “capital nature”).

Because the act of stealing money requires intention, active and purposeful planning and organisation, as well as execution by the thief, the stolen money has been actively worked for and is deemed to be of an income nature.

  1. Normally a taxpayer is taxed on income in the tax year in which he/she received the income.

However, there is no time limitation on the period during which SARS may issue an assessment if SARS finds out that a thief neglected to declare stolen income for income tax purposes in the past.

  1. An amount/monetary value must be determined at which the stolen money can be included in the taxable income of the thief.

The method to determine an amount depends on the unique circumstances of each case. Two of the methods that SARS can use are:

  • Tracing the amount of money that has been paid into the thief’s bank account.
  • Comparing the net amount of the growth of the thief’s assets with the income declared by the thief. To arrive at a net growth amount, SARS takes into account the value of income, tax-deductible expenses, and assets and liabilities declared by the thief. If the declared income does not justify the net growth in assets, SARS will reassign a value to the income which can justify the net growth in asset value.

The courts have determined that neither expenses incurred by a thief for the purpose of stealing money nor any refunds of stolen money are deductible from the taxable amount of the stolen “income” when calculating the thief’s income tax liability

Does it pay to earn income by stealing? A thief has a legal obligation to declare “income earned” by way of stealing and is liable to pay income tax on the full amount of the stolen income. No deduction for costs incurred in the production of stolen income nor any stolen amounts refunded will be allowed as deductions for income tax purposes. Include other potential costs like legal fees and stress medication, and the profitability of stealing as a means of generating income becomes considerably less attractive – if the thief gets caught out by SARS. Otherwise, stealing might still be a profitable career choice.

Reference List:

  • Accessed on 21 June 2015:
  • l SARS Interpretation Note: No. 88, Section 5

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

VAT: The difference between standard-rated, zero-rated and exempt supplies

There are three categories of supplies that can be made by a VAT vendor: standard-rated, zero-rated and exempt supplies. Output tax must be levied on all supplies except exempt supplies. The VAT Act gives specific guidelines for zero-rated and exempt supplies but these fall outside the scope of this article. Please contact your tax practitioner for more information.

The following simplified formula is used to calculate the amount of VAT that a registered VAT vendor have to pay to SARS or can claim as a refund from SARS:

Output VAT levied on standard-rated and zero-rated supplies* – Input VAT claimed on qualifying expenses = Net VAT due to/(refundable by) SARS.

* A supply is defined as the provision of a product or service by a VAT vendor in return for payment in cash or otherwise.

Standard-rated supplies

Standard-rated supplies are supplies of goods and services on which output VAT is levied at a rate of 14%. The input VAT incurred on purchases of goods and services to generate standard-rated supplies can be deducted from output VAT payable to SARS.

Example 1:

  1. XYZ Manufacturers manufactured inventories at a cost of R7 000 (VAT included).
  2. The inventories were sold for R10 000 (VAT included).
  3. All inventory sales qualify as standard-rated supplies.

Net VAT due to/(refundable by) SARS will be calculated as follows:

Output VAT levied on standard-rated supplies (R10 000 x 14/114) R1 228
Less: Input VAT on purchases to make standard-rated supplies (R7 000 x 14/114) (R    860)
Net VAT due to/(refundable by) SARS R   368

Zero-rated supplies

Zero-rated supplies are supplies of goods and services on which output VAT is levied at a rate of 0%. The input VAT incurred on the purchase of goods and services to generate zero-rated supplies can be claimed against output VAT payable to SARS.

Example 2:

  1. XYZ Manufacturers manufactured inventories at a cost of R7 000 (VAT included).
  2. The inventories were sold for R10 000 (VAT included).
  3. All inventory sales qualify as zero-rated supplies.

Net VAT due to/(refundable by) SARS will be calculated as follows:

Output VAT levied on zero-rated supplies (R10 000 x 0/114) R     nil
Less: Input VAT on purchases to make zero-rated supplies (R7 000 x 14/114) (R   860)
Net VAT due to/(refundable by) SARS (R   860)

Exempt supplies

Exempt supplies are not subject to VAT. No output VAT, either at 14% or at 0%, is levied on exempt supplies. Input VAT incurred on expenses to make exempt supplies cannot be claimed against output VAT due to SARS.

Example 3:

  1. XYZ Manufacturers manufactured inventories at a cost of R7 000 (VAT included).
  2. The inventories were sold for R10 000.
  3. All inventory sales are exempt supplies for VAT purposes.

Net VAT due to/(refundable by) SARS will be calculated as follows:

Output VAT levied on exempt supplies R nil
Less: Input VAT on expenses incurred to make exempt supplies (R nil)
Net VAT due to/(refundable by) SARS R nil

Combination of standard-rated, zero-rated and exempt supplies

Where a VAT vendor makes standard-rated supplies and/or zero-rated supplies and/or exempt supplies, input VAT must be apportioned in the same ratio as the three different types of supplies stand to each other.

Example 4:

  1. ABC Distributors made the following supplies for VAT purposes (VAT included where applicable):
Standard-rated supplies R  60 000   60%
Zero-rated supplies R  10 000   10%
Exempt supplies R  30 000   30%
Total supplies R100 000 100%

2. Expenses incurred in the making of total supplies amounted to R85 000 (VAT included).

Net VAT due to/(refundable by) SARS will be calculated as follows:

Prorata Output VAT levied on standard-rated and zero-rated supplies

[(60 000 x 14/114) + (R10 000 x 0/114)]

Output VAT on exempt supplies

  R7 368

 

R      nil

Less: Apportioned input VAT on expenses to make standard-rated and

zero-rated supplies [(R85 000 x 60% x 14/114) + (R85 000 x 10% x 14/114)]

Less: Apportioned Input VAT on exempt supplies

(R7 307)

 

R      nil

Net VAT due to/(refundable by) SARS  R       61

Accounting software can be set up so that VAT is automatically recorded correctly for standard transactions. However, a computer programme will not be able to classify unique transactions for VAT purposes. Therefore it is still important that accounting staff is trained to handle VAT correctly, especially where grey areas exist.

If you would like more information about this topic, feel free to contact us for professional assistance and advice.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

 

Reference List:

  • VAT 404 – SARS Guide for Vendors

SARS payment options and rules

A2The purpose of the prescribed payment rules is to ensure that payments to SARS are allocated to the correct tax account of the taxpayer. If these payment rules are not adhered to, SARS will reject the payment. This article will explain the different payment options available to taxpayers and some of the general SARS payment rules. 

Payment options

The following payment options are available for payments made to SARS from South Africa:

  • Electronic payment via SARS eFiling
  • Electronic funds transfer (EFT) through the taxpayer’s internet banking
  • At a SARS branch
  • Over-the-counter deposit at a bank

Payments from South Africa’s neighbouring countries (Namibia, Botswana, Lesotho and Swaziland) can be made via EFT through the taxpayer’s internet banking.

Any other payments made from outside South Africa, excluding the neighbouring countries in the previous paragraph, can be made using the SWIFT payment method.

Electronic payment via SARS eFiling

When payment is made through eFiling, a payment reference number (PRN), which links the payment due to the relevant tax return, is automatically generated when submitting the return.

A credit push payment is initiated by the taxpayer via eFiling. SARS then sends a payment request to the taxpayer’s bank. The payment must be authorised by the taxpayer via his/her internet banking before the bank will transfer the money to SARS.

It is important for taxpayers to ensure that the tax return they submit contains the correct declaration of tax due before initiating a credit push transaction as a credit push transaction cannot be reversed after the taxpayer approved it through their internet banking.

EFT via internet banking

The SARS bank accounts into which taxpayers can make payments are pre-populated on the various banks’ internet banking facilities. This means that the taxpayer does not have to create a beneficiary for SARS but can just select the relevant SARS bank account from the pre-populated list of beneficiaries on their internet banking profile. 

At a SARS branch

All payments paid directly to a SARS branch must be accompanied either by a copy of the tax return or clearly state the tax reference number, tax period, tax type and PRN.

SARS do not accept any cash payments except for SARS Customs branches where customs and excise can still be paid in cash.

There are a number of limitations on cheque payments at a SARS branch. Please contact your tax adviser for more information if you make use of cheques.

Certain SARS branches will accept payment via credit or debit card only if this is indicated on a notice board.

Over-the-counter deposit at a bank

Over-the-counter payments done at a bank must be accompanied by the correct information otherwise the bank will reject the payment. The information that must be submitted to the bank together with the payment can be found on the relevant SARS tax return.

Cheque deposits exceeding R500 000 will be rejected by the banks. “Split cheque” payments where the full amount due is larger than R500 000 and then split into two or more cheques of which each cheque is below R500 000, will also be rejected by banks.

How to determine a PRN

If a PRN has not been pre-populated on a tax return, a taxpayer can still determine the correct PRN him/herself by manual means by combining the following information in a 19-digit PRN:

  • tax reference number
  • tax type
  • tax period

Example:

Tax reference number: 1234 567 89 0 (digits 1 – 10)

Tax type identifier: 7 (digit 11)

Tax period being paid: June 2014 (digits 12 – 19)

The PRN will be 1234567890730062014.

Taxpayers should check that they use the correct PRN to ensure that payments are accurately and timeously processed and allocated to the correct account. It remains the full responsibility of the taxpayer to ensure that payment is received by SARS on time in order to avoid any penalties and/or interest from being charged on late payments.

If you would like more information on the regulations regarding payments to SARS, please contact your tax practitioner.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. 

Reference List:

SARS prescription

A3Imagine the following scenario: A taxpayer named Andrew is on his annual vacation for four weeks. On the fifth day of his vacation, he is lying carefree in the sun with his toes wiggled into the warm beach sand.  A thought crosses his mind: perhaps he must check his email for a change.

Fast forward eight hours: Andrew logs in to his email. He gives the emails in his inbox a quick scan. Suddenly his stomach cramps. His heart beats faster. His hands start to sweat. His eye caught an email from SARS. Andrew opens the email and then the attachment reluctantly. The attachment contains a letter from SARS stating that they are going to re-assess his income tax for a specific tax year. The assessment for that particular tax year has been issued more than four years ago. Can SARS do this?

To be subjected to the prescription (or re-opening) of an assessment that has been finalised a few years ago already, is something taxpayers don’t even want to contemplate. However, in terms of the new Tax Administration Act (TAA) SARS may go back more than three tax years into the past, prescribe and re-assess a tax return but only if the Commissioner is objectively, based on the facts, satisfied that both the following statutory requirements are met:

  • There was fraud, misrepresentation or non-disclosure of material facts.

“Fraud” is defined as an unlawful act committed with the intention of misleading another person. The misleading information must cause the other person to act differently than they would have acted if they were not given the misleading information.

The legal meaning of “misrepresentation” refers to a false statement made by a person, regardless of whether the statement is made negilently, fraudulently or innocently. Misrepresentation does not include the expression of an opinion or an interpretation of law.The taxpayer must have made a positive statement which contained one or more facts that were untrue.

Note that innocence cannot be pleaded as an excuse for misrepresentation. Taxpayers thus have to make sure about the content of any statement they make regarding their tax affairs before making such a statement.

“Non-disclosure” means failure to reveal a fact if there is a duty to disclose it. Whether or not there is an intention to conceal it is irrelevant.

  • The above fraud, misrepresentation or non-disclosure of the material facts was the direct cause that the taxpayer had been assessed for a lower amount of tax than if the taxpayer had disclosed these material facts referred to in section (i) above, to SARS.

There must be evidence of a direct link between the non-disclosure or misrepresentation of the material facts and the taxpayer paying too little tax. If the fraud, non-disclosure or misrepresentaiton of the material facts did not cause the taxpayer to be liable for less tax than he was assessed for without the material facts, the second requirement listed above is not met and SARS shouldn’t be able to apply this section of the TAA.

Generally the onus of proving that income is not taxable or that an expense is tax-deductable rests with the taxpayer. However, if SARS wants to apply the provisions of this section of the TAA, the onus of proving that the above requirements are met, rests with the Commissioner.

It seems that if the fraud, non-disclosure or misrepresentation of material facts did take place but did not cause the taxpayer to pay less tax than if SARS had been in possession of these material facts, and SARS would have assessed the taxpayer in exactly the same way as with the original assessment, despite SARS becoming aware of the material facts now, SARS cannot claim that the under-assessment was due to that fraud, non-disclosure or misrepresentation of the material facts.

If SARS wants to issue an additional assessment on the basis of requirement (i) above but requirement (ii) is not met, the taxpayer can deal with this situation using the objection and appeal provisions available.

In the light of SARS’s tools to go back and prescribe assessments for old tax years, it might be prudent to keep tax records for longer than the required retention periods prescribed by SARS.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or ommissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

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Waarom die SAID stawende dokumente aanvra

02Die meeste belastingbetalers ken daardie aaklige gevoel wanneer die SAID stawende dokumente aanvra. Watter stawende dokumente moet ek voorlê? Word ek nou geoudit? Het ek ‘n fout gemaak op my belastingopgawe? Gaan die SAID my tronk toe stuur?

Waarom het die SAID my gekies?

Die SAID is baie geheimsinnig oor die manier waarop hulle te werk gaan om belastingopgawes vir verifikasie en oudit te selekteer. Niemand is werklik seker hoe die SAID besluit van watter belastingbetalers hulle stawende dokumente sal versoek nie. Hulle het slegs laat deurskemer dat hulle gebruik maak van outomatiese stelsels wat lukraak belastingopgawes selekteer vir hersiening en/of ‘n risikotelling aan sekere belastingbetalers toeken gebaseer op hul belastingnakoming in die verlede en derdeparty data wat in besit van die SAID mag wees.

Word ek geoudit?

‘n Versoek om stawende dokumente beteken nie noodwendig dat ‘n belastingbetaler iets verkeed gedoen en nou deur die SAID geoudit word nie. Wanneer die SAID stawende dokumente aanvra, doen hulle gewoonlik ‘n verifiëring van die belastingbetaler se belastingopgawe om te bevestig dat die ingediende opgawe met die stawende dokumente ooreenstem. Na voltooiing van die verifiëringsproses mag die SAID besluit om ‘n belasting-oudit te doen. Die verifiëringsproses en ‘n oudit is twee verskillende prosesse.

Wanneer die belastingbetaler vir ‘n oudit geselekteer word, beteken dit nie dat hy/sy wel enige wette oortree het nie. Die SAID selekteer soms belastingbetalers vir ‘n belastingoudit wat nie noodwendig op die oog af enige wette oortree het nie, maar wie se gedrag aandui dat hy/sy moontlik een of meer belastingwette kon oortree het.

Watter belastingaftrekkings mag lei tot versoeke vanaf die SAID vir stawende dokumente?

Die SAID is geneig om stawende dokumente aan te vra vir sekere belastingaftrekbare uitgawes wat maklik is om kunsmatig te verhoog.

  • Herstelwerk en instandhouding geëis teen huurinkomste

Waar ‘n belastingbetaler herstelwerk- en instandhoudingsuitgawes teen huurinkomste eis, mag die SAID stawende dokumente vereis. Die SAID kan selfs so ver gaan as om perseelinspeksies van die huureiendom uit te voer om te bevestig dat die herstel- en instandhoudingswerk werklik aan die huureiendom gedoen is en nie aan die eiendom van die eienaar van die huureiendom nie.

  • Eise vir tuiskantoor uitgawes

Die SAID benodig bewyse van uitgawes wat geëis is, byvoorbeeld munisipale rekeninge, skoonmaakkoste en versekering. Die tuiskantoor en kantoortoerusting moet uitsluitlik vir besigheidsdoeleindes gebruik word voordat tuiskantoor uitgawes afgetrek kan word. Die SAID is bekend daarvoor dat hulle perseelinspeksies uitvoer om die uitsluitlike gebruik van ‘n tuiskantoor vir besigheidsdoeleindes te bevestig.

  • Aftrekkings teen byvoordele soos reistoelae en maatskappymotors

Die belastingbetaler moet ‘n logboek indien waarin die kilometers wat vir besigheidsdoeleindes gereis is, aangeteken is voordat die SAID enige aftrekking vir belastingdoeleindes sal toelaat.

  • Eise vir mediese uitgawes

Die SAID benodig bewyse van betaling van kwalifiserende mediese uitgawes wat uit die belastingbetaler se eie sak betaal is tydens die jaar van aanslag wat ondersoek word. ‘n Mediese faktuur moet ingedien word saam met een of ander betalingsbewys voordat die SAID die aftrekking sal goedkeur.

Wat gebeur as ek nie stawende dokumente kan voorlê wanneer die SAID dit versoek nie?

Indien ‘n belastingbetaler nie die relevante stawende dokumente kan voorlê nie, sal die SAID nie die eise op die belastingbetaler se belastingopgawe kan verifieer nie en die aftrekkings sal dus nie toegelaat word nie.

Wanneer mag die SAID besluit om my te oudit?

Redes waarom die SAID mag besluit om ‘n belastingbetaler se belastingsake te oudit, sluit in:

  • Die belastingbetaler se gedrag in die verlede rakende sy/haar belastingsake.
  • Die kompleksiteit van ‘n belastingbetaler se belastingsake.
  • Die SAID het wesenlike teenstrydighede en onreëlmatighede gevind terwyl hulle ‘n belastingopgawe met die stawende dokumente geverifieer het.

‘n Oudit is ‘n meer diepgaande proses as verifiëring en behels ‘n evaluering (teenoor verifiëring soos in die geval waar stawende dokumente versoek word) van die inligting wat in ‘n belastingopgawe ingedien is.

Om die SAID van stawende dokumente te voorsien wanneer dit vereis word, plaas ‘n addisionele administratiewe las op die belastingbetaler. Versoeke vanaf die SAID vir stawende dokumente beskerm egter die eerlike belastingbetaler deur te verseker dat meer belastingpligtiges hul deel bydra deur belasting te betaal.

Hierdie artikel bevat slegs algemene inligting en moenie gebruik of beskou word as professionele raad nie. Geen aanspreeklikheid word aanvaar vir enige foute of weglatings of vir enige verlies of skade weens vertroue op hierdie inligting nie. Raadpleeg altyd u finansiële raadgewer vir spesifieke  en gedetailleerde advies.

Verwysingslys:

Hierdie artikel is ‘n algemene inligtingstuk en moet nie gebruik of staatgemaak word op as professionele advies nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of vir enige verlies of skade wat voortspruit uit vertroue op enige inligting hierin nie. Kontak atyd jou finansiële adviseur vir spesifieke en gedetailleerde advies.