Latest Posts in Tax Q&A

Income tax on drop-shipping



I am currently doing drop-shipping, the products which come from over sea, so I would like to know what income tax would I need to pay. What do I need to know about this if I am doing it for the first time? Could you kindly share tax material with me which I can use to also work my way through this.

Individual Tax Consultation



In January 2018 I stopped working as a full time employee and for the 2018/2019 tax year I did various things (including foreign travel and work) and earned different kinds of incomes. I did not register as a provisional taxpayer as at that stage I really did not know how the year was going to pan out and if I was going back into full time employment again. I would like to settle any tax I may owe for the 2018/2019 year, however with my different incomes, working out the country for more than 18...

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Tax Certificate Needed



I am newly registered business owner and I registered just before the lockdown took place and I did not receive my tax certificate. I do have my registration number. Please advise on what I should in order to get my tax certificate. This is new to me and I am confused.

What is a tax residence?



What is a residence tax number for South African citizen? I would like to get some more clarification on this because I am not certain whether I am a tax resident in South Africa or whether I am not such.

What is cut-off date for tax return submissions?



What is the cut-off date for submitting a tax return this year? I am struggling to get a hold of my IRP5 from my previous employer and I am therefore concerned that I will miss the submissions cut off date.

Shareholder Loan and own company



I have a loan with my company (payable from the company). I would like to know what the effects are that we need to consider regarding interest-free loans? I am aware that we can create a tax deduction for the company and I will have the interest exemption, but I feel there is something I'm missing?

Also if the shareholder already exceeded his R23k exemption, will it be fine if we do not levy any interest on this loan? Will there be any unknown tax consequences for that?

Is VAT on commission subjected to income tax?



If an an individual who is a registered as VAT vendor acts as an Agent and earns commission ad obviously charges output tax and declare it to SARS.

I.e. Someone who has invoiced out R100.00 and declared an output tax of R13.04 to SARS, when the time comes to file their personal income tax does the person have to declare the same amount being R86.96 excluding VAT as their commission income and do they have to pay income tax on the above amount?

Will that not be double taxa...

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When can I submit my tax return?



When can I submit my tax return for the 2020 tax season? Are the filing dates still the same as those of the previous year?

Tax deductions exceeds the tax paid



What happens if my Allowable Tax Deductions exceeds the tax paid in the same year. Logically I should only be able to claim back the actual tax paid? It will be Additional allowable Medical claims which will not be covered by the medical aid. These amounts plus smaller deductions will push the claims to over and above the tax payable amount.

Freelancer and Tax payments



I am currently working as a freelance artist who just started earning money from the work which I do, but at the moment I earn approximately R600.00 a month. I also have not been working for a long time before I begun with the freelance job, it has been just over 7 months. Do I still need to pay my taxes even though my income isn't fixed and stable? If that is the case I need help in knowing how I can calculate how much of the tax I would need to pay.

First business tax submission date?



I have a Pty Ltd that was registered in February, the Provisional Tax payments must be made in April and October. SARS says I must make tax payments from the 2021 period. The date of liability for provisional tax: 2020/05. When, according to that, is the first time I have to submit tax reports, was it this past April 2020 already? Also, when is the "major" tax submission due, not the provisional one, but the annual one? I would like to do it with TaxTim as my company is small.

I was...

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How to check available funds at SARS



If you have never filed for a tax return before, how do you go about checking if there are funds owed to you at SARS? I would like to start filing my tax return for this year as I have been unemployed for a long period, but now I am back in the workforce.

Learning disablity claimable from SARS



I pay for a scriber to assist my daughter that has a learning disability, I would like to know whether I will be able to claim this expense from SARS. I did not register my daughter with SARS or SASSA. So, I do not know what process to follow regarding this matter would be.

Voluntary sequestration and eFiling profile



I just had my voluntary sequestration of estate approved by the high court on the 24th of March 2020 and I now need a new tax number. SARS say I can do that through SARS eFiling and I would like to know how I can do this? The problem I have experienced with trying to register a new SARS eFiling profile is that after I input my name and ID number the system tells me to login with my existing profile number.

TaxTim Filing before tax season



I have registered on TaxTim and have also granted you permission to get my information from SARS. Should I wait till tax season begins before I complete all the questions on TaxTim? I am however still waiting for my IRP5 from my employer. I also have property that I am renting out and have a logbook. Please advise.

Contract worker and Tax



I was retrenched at the end of 2017. My last Tax Return was done in the year 2018. Since April 2019 I have been receiving income for work done on a contract basis and the company indicated that I need to see to my own tax affairs. How do I go about filing my tax return for 2020? Your assistance is highly appreciated.

Retirement lump sum calculator



The TaxTim lump sum tax calculator provides for BEFORE and AFTER retirement, retrenchment or death - with a marked difference between the BEFORE and AFTER options. I would just like to make sure that this is correct, as I am being told by my fund that withdrawing retirement funds (post retrenchment - but before retirement age) does not have the same rate. I have been forced to withdraw from my pension fund because of retrenchment due to "redundancy because of a general reduction in personnel" (a cost to company reduction)...

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Register as a Sole Proprietor



Can TaxTim help me register as a Sole Proprietor and assist me with my accounting?

Drop-shipping and taxes



I am currently running a drop-shipping business on Shopify which makes around R83 000 in sales (that's about R45000 profit) per year. As it is a small amount of money at this moment, do I still need to register my business at this stage and start paying taxes? Also, I am ordering small products from China and sending them to customers all around the world. I am not sure how i should go about the taxes in this case. Could you assist me with that?

IRP5s and companies paying RA for employees



If a company is paying into a Retirement Annuity (RA) for employees when preparing an IRP5, using source code 3828 as income, would we then need to use source code 4006 for the same amount? In other words, source code 3828 for the amount paid by company on behalf of employee (this amount will be added to the income total) and code 4475 for the same amount. If an employee has not contributed anything code 4006 will be 0, but will still have to appear on the IRP5?

Financial Emigration



I have recently moved to the United States. I am now living and working there. I would like to financially emigrate. However, I also still have to file taxes for the year 2019, but as soon as this has been finalised I would like to become a non-tax resident in South Africa. Would TaxTim be able to assist me with this process or would you please be able to recommend some avenues I could utilise to complete financial emigration process, as soon as possible?

Foreign Employment and Tax Implications



I am a South African resident currently employed full time. I earn a monthly salary of R23000 (before tax). I have recently started consulting part time for a foreign company that will pay me in dollars. On average $2000 every 3 months.

Provisional Tax and Rental Income



I have filed and completed the 2017 personal income tax for myself. I started receiving rental income from my property in March 2017. Where do I declare this income? Is it part of provisional tax and will I pay penalties for late submission?

Also,
1. The property is owned by myself and my wife. Will we both need to file tax returns for this Rental Income?
2. Does this mean a whole new tax return must be submitted, or is it only necessary to complete the IRP6?

Company Income Tax Due date



My company was registered in April 2019 with a year end in July 2019. I submitted a provisional tax return in August 2019. When is the Company Income Tax tax return due? I have checked my tax compliance and it says that my 1901 tax submission is not compliant but my understanding is that my company wasn't registered then. So, should I submit a zero provisional tax return for 1901?

Outstanding Provisional Tax



I think I needed to submit my last tax return for year ending 29 Feb 2020 as a provisional taxpayer. I have now unfortunately missed the two provisional opportunity windows, but am hoping I can submit and if I need to, pay all the money/penalties owed in the third and final window. Will I be able to do so even though the time has passed? And if yes, would there be any other information which I would need to know before I begin with my filing process?
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