The 2018 tax season is almost upon us.
Important dates to remember
1 July: Filing season opens
21 September: Deadline for manual returns (ie not returns via eFiling)
31 October: Deadline for non -provisional tax payers via eFiling or electronic filing at SARS.
31 January (2019): Deadline for provisional tax payers via eFiling.
Note that the previous end November deadline for non -provisional tax payers submitting via eFiling has been brought forward a month. This is still a proposal at this stage subject to final notice.
Who needs to file a tax return?
Let’s put it this way: You do not have to file a return if:
- Your total gross employment income (to end February 2018) did not exceed R350 000
- Your income was received from one employer.
- You have no other form of income (eg car allowance, business income, taxable interest, rental income, or income from another job.
- You do not intend claiming any additional tax related deductions – eg medical expenses, retirement annuity contributions or travel expenses etc.
Everyone else is required to submit a tax return.
What are the tax thresholds for the 2018 tax year?
- R75 750 if you are younger than 65
- R117 300 if you are 65 or older
- R131 150 if you are 75 or older
For the 2019 tax year these thresholds have been increased to : R78 150, R121 000, & R 135 300 respectively.
When does Provisional Tax apply?
This is important as SARS will apply penalties and interest if it is deemed that you are, or should be, a provisional taxpayer and haven’t applied to be one.
If, for example, in addition to your normal salary which is subject to PAYE, you rent out a property or you run a small business or you earn an income from freelance work, it may be necessary for you to apply to become a provisional taxpayer. This also applies to investment income you receive which exceeds the annual exemption of R23 800 for under 65 year olds and R34 500 for those over 65.
Provisional Taxpayers are required to submit separate returns (IRP6) with an estimate of taxable income twice a year on 30 August and 28 February.
Working abroad and SA tax
An amendment to the Income Tax Act specifically dealing with foreign income and forming part of the Taxation Laws Amendment Bill of 2017 has been inacted.
The new law will come into effect on 1 March 2020 and requires all South African Tax residents to pay tax on their foreign employment income where such income exceeds the threshold of R1m.
The threshold of R1m sounds generous but the definition of income here includes allowances and fringe benefits which might include for example housing, security and flights in addition to salary. Considering the cost of living in most foreign countries – particularly when converted to rands – the threshold can quite easily be exceeded.
Reaction to this has been mixed with some expatriates starting to wrap up their offshore work and returning to SA. Others are considering official emigration through SARS and the SA Reserve Bank. Once completed this process will end tax ties with South Africa.
We think that there will be quite a bit of further discussion on this.
Finally on the issue of tax – well in this case, customs – SARS have issued a media release on:
Customs Requirements for South African Travellers
SA Residents travelling abroad are not required to declare their personal effects when leaving the country, nor upon return. “Personal effects” includes such items as personal laptops, IPads, cell phones, golf clubs, cameras and other “high value” items forming part of the travellers possessions when leaving the country.
All very reasonable except that a further provision indicates that upon return to SA, a traveller may be required by a Customs Officer to produce proof of purchase.
Good news and perhaps not such good news. We await further clarification.
For more information, please contact us.