In May, the South African Revenue Service (SARS) announced that tax season 2021 would kick off on 1 July 2021. If you’re an individual taxpayer, you have until 23 November 2021 to eFile your taxes via SARS eFiling or the SARS MobiApp. The tax season start date remains the same if you’re a provisional taxpayer or are filing returns for a trust, however you’ll have until 31 January 2022 to submit your paperwork.
If you’re unable to make use of eFiling, you may visit your nearest SARS branch. Be sure to book an appointment, as capacity may be constrained due to staff working from home or branches being temporarily closed due to the COVID-19 pandemic.
Who should file taxes?
If you earned an income between 1 March 2020 and the end of February 2021, you will be taxed on that income and must accordingly submit your returns before the tax season deadline. Failure to do so by the deadline if you have not requested an extension could result in a penalty from SARS.
You will be exempted from paying tax if you do not meet certain tax thresholds. No tax is payable by you if:
- You are younger than 65, and earned less than R83 100 or R6 925 per month during the 2021 tax period
- You are older than 65 but younger than 75, and earned less than R128 650 or R10 721 per month during the 2021 tax period
- You are older than 75, and earned less than R143 850 or R11 988 per month during the 2021 tax period.
However, you also need to ensure none of the following apply to you:
- You must not have derived income from a business, whether your business is located in South Africa or abroad
- You must not have sold assets, such as a property, and derived a capital gain of more than R40 000 for the tax year
- You must not have owned assets in a foreign country or foreign currency to the value of more than R250 000 at any point between 1 March 2020 and 28 February 2021.
When do you not need to file a tax return?
Even if you earned above the thresholds above, you may not need to submit a tax return, provided that you did not earn a gross salary of more than R500 000 between 1 March 2020 and 28 February 2021, and:
- You earned an income from one employer during this time
- Your employer withheld employees’ tax
- You are not claiming any deductions such as, for example, working out of your home office
- You do not earn an extra commission-based, rental or interest income
- You do not have a car allowance, company car or travel allowance
- You must meet all of the above criteria in order to be exempted from filing a tax return.
Certificates related to your medical aid, pension fund or retirement and IRP5 or IT3(a) will go a long way, and cover most of what you require. However, you should also have the following paperwork handy, depending on your circumstances:
- Certificates for dividends or interest earned
- Certificates relating to offshore investments
- Proof of any medical aid expenses not covered by your scheme but qualifying as an ‘expense’ for tax purposes
- Statements and documents detailing capital gains anywhere in the world, commission-based income and rental income
- Proof of any expenses you may be claiming deductions for
- A logbook in the case of claiming expenses in connection with work-related travel and transport.
SARS estimates that approximately 3 million taxpayers will be auto-assessed during this tax filing season. You may not be aware that you have been auto-assessed until you log in to SARS eFiling. It is done to speed up the national tax season 2021 filing process.
This means that you will find yourself ‘pre-assessed’ with everything already in order without having submitted your tax returns, or you could be eligible for a refund or, conversely, a penalty that is payable. The auto-assessment will be pre-loaded and await your acceptance.
It is always a good idea to consult a tax professional to ensure that all information pertaining to you, especially from third parties, did pull through accurately. You would not want to be inadvertently forfeiting a refund to which you are entitled.
A quick note on offshore investments
Some taxpayers are unaware of the risks of not declaring offshore investments. The Common Reporting Standards (CRS) agreement is there to facilitate the reporting and exchange of information to SARS even if you’re working abroad and earning an income, or hold off-shore investments.
It is best to ensure you don’t fall foul of your tax-paying obligations by consulting (tax)-seasoned professionals who can help you submit the most accurate tax returns and help you maximise on any returns or deductions by deftly navigating the applicable tax laws, rules and regulations.