The 2022 tax filing season opened on 1 July 2022.
The due dates for submitting your tax returns are:
- Taxpayers who submit manually: Before 24 October 2022;
- Individual non-provisional taxpayers: Before 24 October 2022;
- Provisional taxpayers who are individuals; Before 23 January 2023; and
- Companies, trusts and CC’s: Within 12 months from financial year-end.
Who is exempt from filing a tax return?
• Individuals receiving a total annual gross income of less than R500,000 from only one source with no other allowances or benefits, and from whom PAYE has been deducted as per the prescribed tax deduction tables.
• Individuals who are not claiming tax related deductions or rebates such as medical expenses, travel, and retirement annuity contributions other than pension contributions made by their employer.
• Individuals who only receive interest below the interest exemption thresholds; amounts from tax-free savings accounts; or dividends.
• Individuals who are non-residents throughout the year.
Even if you could be exempt at first glance you might still benefit from filing a return due to your particular circumstances. If there is any doubt, professional advice is essential.
Issues requiring special attention
• This year’s tax season is much shorter than last year’s for provisional, non-provisional, manual, and branch office submissions. Make sure you start collecting all relevant documentation now!
• Home office expenses remain in the spotlight, as SARS is reviewing this deduction in detail before it will be allowed on assessment. Therefore, please make sure you qualify for this deduction, and that it is correctly pro-rata calculated for allowable non-capital expenses such as rates and taxes, electricity, repairs, and insurance. Also, be sure to understand the potential capital gains tax impact when you sell your home for which the deduction was claimed. Professional advice is essential here.
Last year more than three million taxpayers were auto-assessed, and significantly more individual taxpayers will be auto-assessed this year. This entails that you do not have to submit an income tax return – instead SARS will directly issue a tax assessment based on information available to SARS and as received from financial institutions and medical aids.
If you are auto-assessed, SARS will send you an SMS that your tax return has been pre-populated by SARS on eFiling or the SARS MobiApp. Check with your accountant before making any decisions about your auto-assessment.
Be sure to check if your auto-assessment is correct as soon as you receive the SMS notification because this year there is no need to “accept” the assessment: SARS will regard it as accepted unless changes are made as detailed below before the 24 October deadline.
An example of information that SARS will not have and therefore not consider for the auto assessment is the medical costs paid by yourself which do not reflect on your medical aid certificate. This will then lead to your medical credit deduction being too low.
If you don’t agree with the automated assessment, an accurate ITR12 tax return can be filed within 40 business days of the date of the auto assessment. If this return is filed after 24 October, it will be subject to normal late submission admin penalties and interest. If SARS accepts the changes, a reduced or additional assessment will be issued. If not, the normal objection and appeal options are available.
If you accept the assessment and there is an amount due to SARS, the next step is simply to make the payment via eFiling or SARS MobiApp. If a refund is due to you, check that your banking details with SARS are correct and simply wait for the refund.
- SARS has indicated that Company Income Tax (CIT) filing compliance is currently a focus and urges companies to note that it is compulsory for registered companies that are required to file a return to do so on time and complete it in all respects.
- Non-compliance for all types of taxpayers is as expensive as ever, with the same penalty rules for auto-assessments expected to apply for the 2022 filing season. The late submission admin penalty ranges from R250 to R16,000 a month for up to 35 months, depending on the assessed loss or taxable income of the taxpayer for the year prior to the year being assessed.
- In addition, failure to submit the return(s) within the prescribed period could result in a summons and/or criminal prosecution, which upon conviction is subject to a fine or imprisonment for a period of up to two years.
Next steps to assist you in complying
- Get started immediately to avoid the last-minute rush, and to minimise the risk of errors and omissions. Diarise the key dates, allowing time to attend to any potential problems, such as finding documents, obtaining third-party information, or getting professional advice.
- Ensure all your information is correct. Update your personal information such as banking details, address, and contact details on eFiling or the SARS MobiApp, and make sure all information provided on the return is true. SARS has significantly improved its abilities to draw information from third parties, including employers, financial institutions, medical schemes, retirement annuity fund administrators, and other third-party data providers, making it easier than ever before for SARS to detect incorrect or undisclosed information.
- Check that you have received certificates and documents relevant to determining your tax obligations such as your IRP5/IT3(a)s and other tax certificates like medical certificates, retirement annuity fund certificates, and other 3rd party data. If not, immediately contact the 3rd party data provider.
- Keep accurate records of all the calculations and source documents used as SARS may ask for these documents to be verified and/or for the calculations to be justified.
- Consider professional assistance to ensure all exemptions, rebates, and deductions for businesses and individuals are included and that the many terms and conditions, dictating when and how these may be claimed, have been met.
- Plan ahead financially to meet the tax liability that will be due along with the submission deadline.