The South African Revenue Service (SARS) Tax Filing is the annual process by which individuals and entities in South Africa report their income, calculate their tax liability, and submit their tax returns to SARS. This process is crucial for ensuring that taxpayers meet their legal obligations and that the government collects the necessary revenues to fund public services and infrastructure.
The filing season for individual taxpayers is fast approaching, bringing with it several critical updates and changes that every taxpayer needs to be aware of. This year, SARS continues to streamline and modernize its processes to make tax compliance easier and more efficient for everyone. From auto-assessments for simpler tax affairs to new tax incentives for renewable energy investments, there are numerous updates that could impact how you file your return.
This article will walk you through the key dates, changes, and steps you need to take to ensure a hassle-free SARS eFiling experience. Whether you’re a non-provisional taxpayer, a provisional taxpayer, or managing the tax affairs of a trust, staying informed and prepared is crucial. Let’s delve into the specifics of what this filing season has in store and how you can navigate it successfully.
SARS Tax Filing
1. Income Reporting – Taxpayers must report all forms of income earned during the tax year. This includes salaries, wages, business income, investment income, rental income, and any other sources of earnings. Accurate reporting is essential to ensure correct tax calculations.
2. Deductions and Credits – Taxpayers can claim various deductions and credits to reduce their taxable income. These may include contributions to retirement funds, medical expenses, donations to approved organizations, and specific tax incentives like those for renewable energy investments.
3. Tax Calculation – Once income is reported and deductions are applied, the taxpayer’s liability is calculated based on the applicable tax rates. SARS provides tools and calculators to help taxpayers determine their tax liabilities accurately.
4. Submission of Tax Returns – Taxpayers must submit their tax returns to SARS by the specified deadlines. This can be done electronically via eFiling or the SARS MobiApp, or manually through paper submissions. Meeting the deadlines is crucial to avoid penalties and interest on late payments.
5. Assessment and Refunds – After submission, SARS assesses the tax returns to verify the accuracy of the reported information. If the taxpayer is due a refund, it will be processed and paid into their bank account. If additional tax is owed, the taxpayer must make the payment by the specified due date.
Filing Process for SARS Tax Returns
Providing accurate and complete information is essential to avoid issues with SARS. Double-check all entries and ensure supporting documents are available. Adhering to the filing deadlines is crucial to avoid penalties. Ensure you are aware of the specific deadlines for your taxpayer category. Stay informed about any changes in tax laws or filing requirements that may affect your return. SARS frequently updates its guidelines and procedures.
1. Registering for eFiling
Registering for SARS eFiling is the first step in the tax filing process for individuals and businesses in South Africa. This platform provides a convenient and efficient way to submit tax returns, make payments, and access various tax-related services.
- Visit the SARS eFiling Website: Go to the SARS eFiling website www.sarsefiling.co.za.
- Create an Account: Click on the “Register” button and follow the prompts to create a new account. You will need to provide your personal details, such as your ID number and contact information.
- Verify Your Identity: SARS will send a verification code to your email or mobile phone. Enter this code to verify your identity.
- Complete the Registration: Fill in any additional required information, including your tax reference number and banking details.
2. Gathering Documentation
Collecting all necessary documentation is crucial for accurately completing your tax return. This ensures you report all income and claim eligible deductions correctly.
- Income Statements: This includes payslips, IRP5/IT3(a) certificates from employers, and statements of other income such as rental, investment, and freelance income.
- Receipts for Deductions: Gather receipts for deductible expenses such as medical expenses, charitable donations, and retirement annuity contributions.
- Bank Statements: These can help verify income received and expenses incurred during the tax year.
- Investment Statements: If you have investments, you will need statements showing interest, dividends, and capital gains or losses.
- Business Records: Detailled business records, including income, expenses, and asset purchases, are necessary for self-employed individuals.
3. Completing the Tax Return
Filling out the tax return accurately is crucial for ensuring that you pay the correct amount of tax and avoid any penalties or issues with SARS.
- Log into eFiling or MobiApp: Use your registered account to log into the SARS eFiling platform or the SARS MobiApp.
- Access the ITR12 Form: For individual taxpayers, the ITR12 form is used. Ensure you are filling out the correct form relevant to your taxpayer category (e.g., individual, business, trust).
- Enter Personal Details: Fill in your personal information, including your contact details and banking information for refunds.
- Report Income: Accurately enter all sources of income, including employment income, investment income, rental income, and any other earnings.
- Claim Deductions: Enter details of deductible expenses and credits you are eligible for, such as medical expenses, retirement contributions, and donations.
- Review and Validate: Review the entered information for accuracy and completeness. Use the validation feature to check for any errors or missing information.
4. Submitting the Return
Once you have completed and reviewed your tax return, the next step is to submit it to SARS.
- Electronically via eFiling: The most efficient way to submit your return is electronically via the SARS eFiling platform. After validating your return, click on the “Submit” button.
- Using the SARS MobiApp: If you prefer to submit your return using your mobile device, you can use the SARS MobiApp.
- Manual Submission: Although less common, you can also submit a paper return at a SARS branch. Ensure you have booked an appointment if you choose this method.
5. Reviewing the Assessment
After submitting your return, SARS will process it and issue a Notice of Assessment (ITA34). It is important to review this assessment to ensure it matches your records.
- Log into eFiling or MobiApp: Access your account to view the assessment notice.
- Check for Accuracy: Compare the assessment details with your submitted return. Ensure all income and deductions are correctly reflected.
- Address Discrepancies: If there are discrepancies, you may need to file an objection or request a correction. Follow the SARS guidelines for this process.
- Confirm Refunds or Payments: If a refund is due, ensure your banking details are correct and monitor your account for the refund. If you owe taxes, make the payment by the due date specified on the ITA34.
What’s New This Year in SARS Tax Filing?
The 2024 SARS filing season introduces several key updates to simplify the tax filing process and encourage clean energy investments. Notable changes include a solar energy tax credit, allowing a 25% deduction (up to R15,000) for new and unused solar PV panels acquired between 1 March 2023 and 29 February 2024. Pro-rata adjustments will now apply to retirement fund contributions and tax-free investment limitations if the assessment year is less than 12 months.
The Urban Development Zones deduction has been extended to 31 March 2025, and a redesigned renewable energy tax incentive now permits businesses to deduct 125% of the cost of new assets used in electricity generation. The ITR12 form has been updated to simplify foreign employment income exemptions and include Beneficial Owner information.
Taxpayers are advised to be vigilant against scams and phishing attempts. SARS encourages the use of eFiling or the SARS MobiApp for managing tax matters, with additional support available through the Help-You-eFile service, tutorial videos on the SARS YouTube channel, and Mobile Tax Units. These updates aim to facilitate a smooth filing experience and maximize available tax incentives.
Important Dates for the SARS Tax Filing Season
| Auto-assessment notices | 1 July 2024 to 14 July 2024 |
| Individual taxpayers (non-provisional) | 15 July 2024 to 21 October 2024 |
| Provisional taxpayers | 15 July 2024 to 20 January 2025 |
| Trusts | 16 September 2024 to 20 January 2025 |