4 August 2010 | Category: Tax
While SARS’ online tax submission system – SARS e-filing – has made tax submissions a whole lot simpler, business owners and large investors need to ensure that the more complex focus areas of their activities are appropriately addressed when submitting returns online.
“The implications of submitting the more multifaceted tax items incorrectly can be detrimental to taxpayers, with inflated amounts inaccurately being paid to SARS,” says Neville Sweidan, a tax partner at Grant Thornton Johannesburg.
The 2010 tax filing season officially opened on 1 July 2010. The deadline for electronic submissions on e-filing is 26 November 2010 as opposed to the postal submissions deadline which is 30 September 2010. The deadline for people or trusts which are classified as provisional tax payers is extended to 31 January 2011.
“Company tax returns differ significantly, however, from those applicable to individuals with the submission deadline only 12 months after the company’s financial year end,” adds Sweidan. He warns that details relating to foreign income, capital gains or losses, local farming, non-taxable considerations or local business, trade and professional income can become complicated issues to submit correctly online.
In terms of income earned outside of South Africa’s borders, often a withholding tax has been deducted by the foreign institution. “In certain circumstances, the withholding tax is deductable from SA taxes payable – which could result in a significant saving for the taxpayer,” says Sweidan.
Capital gains and losses is also a complex section of the tax legislation and it’s important to have all the necessary information at hand in order to claim the appropriate base cost or exclusions. “Skilled tax advisers can assist particularly with complicated capital gains issues and final submissions to SARS,” he adds.
Another tax complication can arise when individual taxpayers experience a sudden increase or decrease in net assets, which is reflected in statements of assets and liabilities arising from non-taxable receipts or losses. “It is very important to explain the reasons for the increase or loss to SARS appropriately,” warns Sweidan. “Failure to do so can result in exasperating queries and delays in receiving correct assesments.”
SARS is very strict on deadlines as well as whether an individual’s personal particulars on record are accurate. Sweidan warns that penalties for inaccurate personal details or late submissions can range from R250 to R16,000 a month, depending on the category of the taxpayer which is determined by the individual’s taxable income.
“Using SARS e-filing to submit your company and personal tax returns on time and accurately is certainly a whole lot more efficient, but it may require some careful preparation and research beforehand, to confirm all data is correct, thus limiting the need for amendments later on,” concludes Sweidan.
Notes to editors
You may quote freely from this publication, provided you acknowledge the source. This publication is an outline for information purposes and should not be relied upon for detailed planning. Readers are advised to consult professional advisors for guidance relating to new or existing legislation which might affect their business and personal decisions.
About Grant Thornton South Africa
Grant Thornton South Africa is a member firm of Grant Thornton International Ltd (Grant Thornton International). Grant Thornton South Africa was founded in 1920 (previously Kessel Feinstein). We are leaders in our chosen market, providing assurance, tax and specialist business advice to dynamic organisations – listed companies, large privately held businesses and private equity backed organisations.
We employ 673 people in South Africa with 76 partners and directors. Grant Thornton has a national presence with offices in Bloemfontein, Cape Town, Durban, Johannesburg, Nelspruit, Port Elizabeth, Pretoria and Rustenburg. South Africa is a major force in Africa, alongside 18 member firms on the continent. We operate in Algeria, Botswana, Egypt, Gabon, Guinea, Ivory Coast, Kenya, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Senegal, Togo, Tunisia, Uganda, Zambia and Zimbabwe and are ideally positioned to facilitate clients’ expansion plans in these countries.
About Grant Thornton International Ltd
Grant Thornton is one of the world's leading organisations of independent assurance, tax and advisory firms. These firms help dynamic organisations unlock their potential for growth by providing meaningful, actionable advice through a broad range of services. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to solve complex issues for privately owned, publicly listed and public sector clients.
Over 35,000 Grant Thornton people, across more than 100 countries, are focused on making a difference to clients, colleagues and the communities in which we live and work.
Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered independently by member firms, which are not responsible for the services or activities of one another. Grant Thornton International does not provide services to clients.
Grant Thornton International is the fastest growing global accountancy network and has recently been awarded 2013 'Network of the year’ by The International Accounting Bulletin (IAB). The International Accounting Bulletin awards are designed to celebrate accounting achievements over the past year by emphasising the individuals and businesses that have moved the industry forward. To win the ‘Network of the Year’ award, firms had to demonstrate strength across a number of key areas which included evidence of top-level network-wide audit quality, a strengthened position in strategically important markets and a strong industry leadership.