A Directors PAYE and UIF deductions
Posted 14 June 2017
As a Director of a Company, your salary is subject to monthly PAYE and UIF deductions. Many small business owners don’t realise that if they operate their business through a company (Pty), the company needs to be registered as an employer with SARS.
This means, the company needs to deduct employee’s tax (PAYE) from the amounts paid to Directors. It’s also required to make monthly EMP201 submissions (this is the PAYE, UIF and SDL return) to SARS. The same applies even in the case of “owner managed” businesses -where there’s only one director and no employees...
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The low-down on Financial Statements for companies
Posted 20 April 2017
With the launch of the Corporate Income Tax Return service for SME’s recently, there are questions around the requirement for companies to produce financial statements once they have filed their return. In particular, small business owners have been asking whether they need to engage an expensive professional to prepare them, or if can they be drafted and signed internally by their accountant/bookkeeper. There also seems to exist some confusion around the requirement for an audit versus an internal review. Below, we try and clear up some of the confusion around this topic. ...
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Which dividends are exempt from Dividend Withholding Tax?
Posted 20 April 2017
There are certain dividends, which don’t attract dividends tax, provided some conditions are met. However, lets first take a step back and clarify what dividends tax is, and how it is calculated.
Dividends tax is a withholding tax, which is levied at 20% on dividend distributions. It is the obligation of the company paying the dividend to withhold the tax and pay it over to SARS.
Depending on the nature or status of the dividend recipient (i.e. the party who receiv...
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Alert: Change to Provisional Taxpayer Rules
Posted 23 March 2017
Currently, there is a legal obligation for South African resident employers to register with SARS for employee’s tax (PAYE) so they can withhold tax on a monthly basis from their employees’ salaries, and pay this over to SARS. However, the situation is different for foreign companies who employ South African residents. If these companies don’t have an office or a branch or some other legal representation in South Africa, they don’t have an obligation to register with SARS for PAYE...
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Unpacking the Budget Speech: proposed changes to foreign employment
Posted 10 March 2017
Since the announcement of the 2017/2018 budget, TaxTim has been asked many times about the changes to the foreign employment income exemptions rules which could have a very negative effect on taxpayers working overseas.
Currently, if a South African resident works for a foreign employer and is out of the country for 183 days or more, within a 12 month period, and they fulfil various other conditions, their foreign employment income may be exempt from South African Income tax. Please ...
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Penalty FAQs
Posted 6 March 2017
What is a recurring penalty? OR What are recurring SARS penalties? OR What does it mean to receive a penalty?
This is a penalty for non-submission of your returns in previous years. You need to see which returns you have not submitted and submit them ASAP. You also need to make payment to SARS for this penalty, but you would have to call them on 0800 00 7277 or log onto SARS eFiling to get a current statement of account and know exactly what they want from you.
Rental Income FAQs
Posted 6 March 2017
Should interest on your home loan be deducted from your rental income?
Yes, it does, the interest would go under the finance costs, the actual bond repayments are not deductible for tax purposes.
Should my rent which is paid by my boss, reflect on my payslip?
Yes, this would be fully taxable at the same rate as your salary. It can reflect as 'other allowances - taxable" and can reflect under source code 3713 on your IRP5.
Is there a VAT payment on maintenance expenses for my car? ...
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Contract Workers FAQs
Posted 6 March 2017
Contracting Benefits vs Salary?
You will still be able to claim deductions for medical, travel and RA directly regardless of how you are earning income.
Contract worker and the tax effects?
Contractors are taxed if they earn above the threshold. This is the same as a full time employee.
Tax Thresholds?
For the 2018 tax year, anyone under 65 years of age earning above R75 750 will not pay tax.
Rebate FAQs
Posted 22 February 2017
What is a rebate?
A rebate is an amount by which SARS takes off the actual taxes owing to them. SARS will calculate the amount of tax that you owe to them, based on your income and expenses throughout the year, then if certain conditions apply, they’ll reduce the amount due.
What does a negative tax refund amount mean?
This means SARS owes you money
What do I do if my refund was paid into the wrong bank account? ...
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Audit FAQs
Posted 22 February 2017
What is the meaning of an audit? What is an audit from SARS? SARS audit What is a SARS audit?
Being audited just means that SARS could be doing a random selection and checking that all the information submitted is the same as they have.
How long does it take for SARS to pay me after an audit? OR Payment pending an audit, how long is that? OR Payment still pending due to audit.
It can take anywhere from 24 hours to a few months. You will receive a letter of completion once the audit has been verified indicating if any changes have been made. You just have to sit tight and be patient....
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Donations FAQs
Posted 22 February 2017
Are donations to political parties’ tax deductible?
They are deductible if the political party is a registered Public Benefit Organisation/Not-For-Profit and is registered with SARS.
Are church donations deductible?
The church should give you a receipt with a PBO/NPO/NPC number, if they don't have a number then you cannot claim the deduction. The number needs to start with a 9. It should be either 9 or 10 digits.
Foreign gift in the form of donation OR Donation from overseas OR Informing SARS of inheritance OR Donations received from overseas...
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2017/2018 Budget - The rich are going to pay more, but what does that mean for the rest of us?
Posted 22 February 2017
Personal Tax Rates (rates below)
Individuals across the country, those qualifying above the new tax threshold of R75 750 (previously R75 000) will be paying increased taxes of R16.5bn (previously R5.65bn in actual tax increase) for the next tax year, most of this will be for high income earners, however. Taxpayers generally across the board will be earning the tiniest bit more money each year as their tax brackets...
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Depreciation FAQs
Posted 17 February 2017
What constitutes wear and tear? What is depreciation? What is the depreciation limit?
Wear and Tear or Depreciation is the decrease in value of an asset. SARS allows you to deduct this decrease each year based on the tables. See here for the latest
Depreciation Calculator Can I claim depreciation for my car as a sole proprietor if I have a log book by using the tax table?
You would be able to depreciate your car over 5 years, but you need to then apportion it for the use of business travel based on the logbook...
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6 Reasons Accounting Records Are Critical to Your Small Business
Posted 18 October 2016
You’re an entrepreneur. A wildly innovative individual. An ideas person. A make-things-happen person. A real go-getter. Passionate about your business and pursuing your dreams. And brilliant at keeping your accounting records up to date. Chances are that last one doesn’t ring true, does it? Don’t feel alone, financial record-keeping is the bane of existence for most small business owners and managers.
When you’re in the throes of building your empire from the gr...
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Special Stopper at SARS: What We Know For Sure
Posted 22 September 2016
Over the last few weeks, our helpdesk has received an alarming number of queries from taxpayers asking what they can do as their refunds are being held back by SARS due to a special stopper being placed on their account. It’s a complex situation and the only advice we've been able to provide has been for the individual to make contact with SARS directly to try resolve the matter.
The South African Institute of Tax Professionals (SAIT) issued a statement on Tuesday 20 September 2016 advising that they’re looking into the issue after numerous complaints had been raised...
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5 Great Reasons to File Your Tax Return Early This Year
Posted 24 May 2016
Are you the type of person dashing into the store to grab a birthday gift en route to a party? Or perhaps you’ve found yourself scratching through your craft box at 11pm the night before to make a ‘World Book Day’ outfit for your son? Or possibly you’re one of the hundreds of thousands of South Africans who waits until the last week of November to file your tax return?
While I’m not suggesting that every minute of your life needs to be pre-planned and organised, there are certainly a number of benefits to getting your tax done early...
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The Smart Way to Save Tax when Renting out a Property
Posted 8 April 2016
Taxpayers who earn rental income from a second property of theirs often don’t know what they need to do when it comes to declaring this income to SARS. Sometimes taxpayers think that they don’t have to declare this extra income, or can hide it from SARS by not entering it on their tax return form - a big mistake!
The truth is that extra income earned from rental is taxable, and SARS needs to know about it. In some cases - if the amount earned (profit) outside of a sala...
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2016 Budget Speech: Welcome Back, Minister! You Couldn't Have Returned Just for the Free Lunch?
Posted 25 February 2016
The 24th of February 2016 was supposed to be a watershed moment for the Economy of South Africa. The old-new Minister of Finance, Pravin Gordhan, was to deliver his budget for the 2016/2017 tax year and save South Africa from a financial pit-fall in the form of an International Ratings Agency downgrade. The jury is still out on whether or not this is possible. Immediately after the budget was revealed the Rand tumbled 2%, which doesn’t bode well for market sentiment. However, ...
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2016/2017 Tax Tables
Posted 24 February 2016
Income Tax Tables for the 2017 Tax Year - 1 March 2016 to 28 February 2017
Income Tax Thresholds
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What You Need to Know About Changes to the Tax Clearance System
Posted 23 February 2016
Tax compliance makes its way into many aspects of life and business. Perhaps you’re considering applying for a tender, or for a foreign investment allowance to move funds offshore, or even looking to emigrate and leave our shores. These are just a few examples of instances where you may be asked by a third party to provide a Tax Clearance Certificate.
And until now, the course of action to obtain your certificate has been a tedious one.
Upon request, SARS would check its records and verify that the taxpayer had filed all required tax returns, paid all taxes, penalties and interest due, before releasing a Tax Clearance Certificate confirming a good standing...
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Retirement Funds Tax Laws Effective 1 March 2016 - How SARS' New Changes Affect You!
Posted 10 February 2016
If you’re diligently putting money away for your retirement in the form of a pension, provident fund or retirement annuity, you may be curious – perhaps even a touch concerned – about the changes SARS has made to the retirement fund tax laws, which come into effect on 1 March 2016.
If you missed the news, here's a quick overview.
SARS have changed how contributions to retirement funds are treated from a tax perspective, as well as how your funds are managed when you retire...
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Swear an affidavit for SARS
Posted 7 August 2015
Has SARS asked you for documents that you can't produce, such as an old IRP5 from a prior year that your employer doesn't have, or that simply doesn't exist?
To prove to SARS that you cannot produce the document they want, you will need to produce what is called a sworn affidavit.
This is basically a letter that you must write, that you then take to your nearest police station to get signed and stamped.
Items to include:
1. Your name, ID number and contact details...
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SARS isn't paying my refund, they want my old returns!!!!
Posted 3 August 2015
Taxpayers this year are facing a new gripe with SARS when it comes to receiving those well-earned refunds. The current two scenarios are:
- NO AUDIT: A taxpayer files a tax return, gets their ITA34 and does not need to submit supporting documents; or
- AUDIT: A taxpayer files a return and in their ITA34 is requested to submit supporting documents, after which they receives a Completion Letter stating "no adjustment made".
In both these cases a refund should be paid out a few days later (if the taxpayer is due one), however thousands of taxpayers still have not been paid their refund. Here’s why!...
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SARS Tax Tables 2015
Posted 26 February 2015
Tax Thresholds:
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Thank you Minister - we expected worse! 2015 Budget
Posted 25 February 2015
New Finance Minister Nene delivers his first budget with some “better than expected” tax increases. The fight against corruption was highlighted with the minster announcing a series of reforms and procedures to be introduced both to curb corruption and make doing business with the state easier. The minister announced that R25bn would be saved in expenditure over the next two years, but R16.8bn is to be raised this year via tax increases and a remarkably large rise in the fuel and road accident fund levies. To be honest, we expected greater tax increases from the minister, thankfully he spared us some of the pain! ...
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