Shorter deadlines for filing 2022 tax returns

The 2022 tax filing season opens on 1 July. Taxpayers should take note that the deadlines to submit their tax returns are about a month earlier than they were last year.

The South African Revenue Service (Sars) published a notice on 3 June specifying the taxpayers that do and do not have to file income tax returns for the 2022 year of assessment, as well as the periods within which the returns must be submitted.

The deadlines for natural persons, trusts and juristic persons other than companies are:

Monday, 24 October 2022

• Non-provisional taxpayers who file via eFiling;
• Taxpayers (non-provisional or provisional) who file their returns in person at a Sars branch; or
• Taxpayers (non-provisional or provisional) who file their returns with the assistance of a Sars official at a Sars branch.

Monday, 23 January 2023

• Provisional taxpayers, including trusts, who file via eFiling.

Joon Chong, a partner at Webber Wentzel, said taxpayers should take note of the shortened time frames and prepare their submissions sooner rather than later.

A company must submit its income tax return within 12 months from the date on which its financial year ends.

Where accounts are accepted by Sars in terms of section 66(13A) of the Income Tax Act (that is, in circumstances where Sars is satisfied that a taxpayer’s income cannot be conveniently returned for the year of assessment), and the accounts are drawn after 28 February 2022 but on or before 30 September 2022, within six months from the date to which the accounts are drawn.

Auto-assessments

Sars will continue to auto-assess individuals in the auto-assessment population based on third-party data received from employers, financial institutions, medical schemes and retirement fund administrators, Chong said.

These taxpayers will receive an SMS from Sars that they have a pre-populated return on eFiling or the MobiApp. They need to “accept” or “edit” and submit the auto-assessments by 24 October if they are individual non-provisional taxpayers.

If they do not accept, edit or submit their auto-assessments, they receive an estimated assessment that is not subject to objection and appeal, Chong said.

“We expect that the same penalty rules for auto-assessments in the 2021 filing season should apply for the 2022 filing season. An individual who does not agree with the estimated assessment can file an accurate ITR12 tax return within 40 business days of the date of the estimated assessment. This return will be late and subject to normal late submission admin penalties and interest.”

The late submission admin penalty is imposed monthly up to 35 months (if Sars has the address of the taxpayer). The monthly penalty ranges from R250 to R16 000, depending on the assessed loss or the taxable income for the year prior to the year being assessed, she said.

Last year, more than three million taxpayers were auto-assessed. More than 2.2 million accepted the auto assessment, with more than 1.5 million accepting without any changes. This represented a 74% acceptance rate of the new service, Sars said.

However, more than 630 000 taxpayers neither accepted nor edited their returns, and these taxpayers received estimated assessments.

Who must submit an income tax return?

Every individual (natural person) who:

• Was a resident and carried on any trade (other than solely as an employee);
• Was not a resident and carried on a trade in South Africa (other than solely as an employee);
• Was a resident and had capital gains or losses exceeding R40 000;
• Was not a resident and derived any capital gain or loss from the disposal of any Eighth Schedule asset*;
• Was a resident and held foreign currency or owned assets outside of South Africa that had a total value of more than R250 000 at any stage during the year;
• Was a resident to whom any income or capital gains could be attributed due to fluctuations in the value of the rand relative to any foreign currency;
• Was a resident and held any participation rights in a controlled foreign company;
• Was a resident and had taxable turnover; or
• At the end of the tax year:
• was under the age of 65 and had gross income exceeding R87 300;
• was between 65 and 74 and had gross income exceeding R135 150;
• was 75 years or older and had gross income exceeding R151 100; or
• Is issued with a tax return or is requested by Sars in writing to file a return (irrespective of income).

The estates of deceased persons that had gross income during the 2022 year of assessment.

Every non-resident with South African-sourced interest income if:

• The person is an individual who was present for 183 days in total in the 12 months before receipt or accrual of the interest; or
• The debt from which the interest arises is connected to a permanent establishment of the person in South Africa.

Any representative taxpayer of any person listed above.

*An Eighth Schedule asset includes:

• Property of whatever nature, whether movable or immovable, corporeal or incorporeal, excluding any currency, but including any coin made mainly from gold or platinum; and
• A right or interest of whatever nature to or in such property.

The following juristic persons must submit a return:

• Every trust that was a resident during the 2022 year of assessment.
• Every company or other juristic person that was not a resident during the 2022 year of assessment and that:
• carried on a trade through a permanent establishment in South Africa;
• derived income from a source in South Africa; or
• derived any capital gain or loss from a disposal of an asset to which the Eighth Schedule of the Income Tax Act applies.
• Every South African-incorporated company that, as a result of a double taxation agreement, is not a resident in South Africa.
• Every resident company or other resident juristic person that, during the year of assessment:
• had gross income that exceeded R1 000;
• had assets with a cost of more than R1 000 or liabilities of more than R1 000 at any time;
• derived any capital gain or loss exceeding R1 000 from a disposal of an Eighth Schedule asset; or
• had taxable income, taxable turnover, an assessed loss or an assessed capital loss.

Individuals who don’t have to submit a return

A natural person or the estate of a deceased person is not required to submit an income tax return if their gross income during the 2022 year of assessment consisted solely of gross income from one or more of the following:

• Remuneration that does not exceed R500 000, with no additional benefits or claimable allowances, and employees’ tax has been deducted or withheld;
• Interest (excluding interest from a tax-free investment) from a source in South Africa not exceeding:
  • R23 800 for a natural person younger than 65 years at the end of the year of assessment;
  • R34 500 for a natural person aged 65 years or older at the end of the year of assessment; or
  • R23 800 in the case of the estate of a deceased person;
  • Dividends where the natural person was a non-resident throughout the 2022 year of assessment; and
• Amounts received or accrued from a tax-free investment.

The above exemption does not apply to individuals if:

• They were paid or granted certain allowances/advances relating to business travel, accommodation or subsistence;
• They were granted certain taxable benefits or advantages derived by reason of employment or the holding of any office; or
• They received or accrued any amount in respect of foreign services rendered.

How tax returns must be submitted

Income tax returns

Unless otherwise agreed with Sars:

• Individuals and trusts must submit their returns electronically, either via eFiling or by visiting a Sars branch for assistance.
• Companies must submit their returns via eFiling.

Institutions, boards or bodies may:

• Submit returns using electronically, either via eFiling or by visiting a Sars branch for assistance;
• Post the return to Sars; or
• Deliver the return to a Sars branch, other than an office that deals solely with matters relating to customs and excise.

Returns for turnover tax

Unless otherwise agreed with Sars, the return must be posted to Sars or delivered to a Sars branch, other than an office that deals solely with matters relating to customs and excise.