An IRP5 is the employee's tax certificate that is issued to him/her at the end of each tax year detailing all employer/employee related incomes, deductions and related taxes. It is used by the employee specifically to complete his/her income tax return for a specific year.
An IT3b is a Tax Certificate received from an institution such as a bank or financial services offerer which will be a summary of any interest and dividends both local and foreign that you would have earned by having money invested with one or more of these places.
An IT3c is a Tax Certificate received from an institution such as a bank or financial services offerer which will be a summary of any disposals you may have made related to the holding of investments with any of these places.
SARS eFiling is a free online process for submitting your tax returns to SARS and replaces physical tax return submissions done manually. This free service allows individual taxpayers, tax practitioners and businesses to register for free and submit tax returns, make payments and perform a number of other interactions with SARS in a secure online environment. The website is accessible at www.sarsefiling.co.za.
Provisional taxpayers are people who earn income other than a salary / remuneration. If you get income such as rental income from a property, interest income from investments or other income from a trade, you will always be a provisional taxpayer, even if you also earn a salary. However exceptions can apply, see the thresholds below. If you just earn a salary then you are a regular taxpayer and don't have to worry about filing provisional tax returns.
Regular taxpayers make their tax contributions to SARS via PAYE deducted off their paycheck and submit one tax return every year in February - an ITR12. Since provisional taxpayers earn money from other sources, they have to make payments to SARS manually and describe these payments in an IRP6 tax return. SARS wants provisional taxpayers to avoid paying one large chunk of tax in February, so two (or optionally three) payments are made during the year in August and February, with an IRP6 for each one. Provisional taxpayers also need to fill in an ITR12 tax return once during tax season (July - November), just like regular taxpayers do.
If you earn income from other sources, but the below exemptions apply, you are NOT a provisional taxpayer:
If you are UNDER 65 years old and you earn taxable income from Interest, Dividends and Rental less than R20 000 for the tax year;
If you are UNDER 65 years old and your taxable income does not exceed the taxable threshold which is currently at R67 111 for the tax year; and
If you are OVER 65 years old and you only earn income from Interest, Dividends and Rental which is below R120 000 for the tax year.
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 below, which you can then use towards replacing those assets if you wish. For example if your car cost R50,000 in the 2007 tax year, you can depreciate the car by R10,000 each year until 2011 and claim the R10,000 as a deduction, therefore paying less tax!
Use the calculator below to calculate your depreciation:
Base cost of the asset (in Rands): R
Date you got it: Month Year
Type of asset:
You are unable to perform certain functions in your daily life and this has been confirmed by a doctor. This
means a moderate to severe limitation of a person's ability to function or perform daily activities as a result of a physical, sensory, communication, intellectual or mental impairment, if the limitation -
has lasted or has a prognosis of lasting more than a year; and
is diagnosed by a duly registered medical practitioner in accordance with criteria prescribed by the Commissioner.
Generally this is an organisation that does not work for profit and does not pay tax in or out of South Africa. The organisation is most likely involved with charitable work.
which is -
a non-profit company as defined in section 1 of the Companies Act, 2008 (Act No. 71 of 2008), or a trust or an association of persons that has been incorporated, formed or established in the Republic; or
any branch within the Republic of any company, association or trust incorporated, formed or established in any country other than the Republic that is exempt from tax on income in that other country;
of which the sole or principal object is carrying on one or more public benefit activities, where -
all such activities are carried on in a non-profit manner and with an altruistic or philanthropic intent;
no such activity is intended to directly or indirectly promote the economic self-interest of any fiduciary or employee of the organisation, otherwise than by way of reasonable remuneration payable to that fiduciary or employee; and
each such activity carried on by that organisation is for the benefit of, or is widely accessible to, the general public at large, including any sector thereof (other than small and exclusive groups);
Procceeds received for an asset is generally the amount, whether in money or some other form, that the taxpayer received.
the proceeds from the disposal of an asset by a person are equal to the amount received by or accrued to, or which is treated as having been received by, or accrued to or in favour of, that person in respect of that disposal, and includes -
the amount by which any debt owed by that person has been reduced or discharged; and
any amount received by or accrued to a lessee from the lessor of property for improvements effected to that property.
A partnership is an association between 2 - 20 people who are contractually bound to one another in order to operate a joint, profit-making business together. Each member of the partnership contributes their money, goods or services to a shared fund, agreeing that any profits made will be shared between the partners as per a contract between them. A partnership does not have to be registered with the companies registrar CIPC. Partners in a partnership are taxed on their percentage of the taxable income of the partnership. This income needs to be disclosed to SARS.
Base cost means the cost of an asset against which any proceeds (the price) upon disposal (sale) are compared in order to determine whether a capital gain (a profit) or loss has been realised.
Base cost includes those costs actually incurred in acquiring, enhancing or disposing of a capital asset that are not allowable as a deduction from income.
The following are included in the base cost of an asset: Acquisition cost, Incidental costs of acquisition and disposal, Capital costs of maintaining title or right to an asset and/or Cost of improvements or enhancements. See the SARS definition for more detail.
A source code is a four digit identifier / number that SARS uses to capture information on the income tax return. It will usually appear alongside the amount it relates to. Source codes that might appear on your IRP5 are listed below. For business source codes please click here.
3605 - Annual payment 3611 - Purchased annuity 3615 - Director's remuneration 3701 - Travel allowance 3704 - Subsistence local 3713 - Other allowances 3717 - BBEE share plan 3802 - Use of car 3901 - Gratuities 3908 - Surplus apportionments 3920 - Lump sum benefit 4002 - Arrear pension 4006 - Current RAF 4024 - Other medical costs 4474 - Employer medical aid
3601 - Income or salary 3606 - Commission 3613 - Restraint of trade 3616 - Independent contractors 3702 - Reimbursive travel>8000km 3707 - Share options 3714 - Non-taxable allowances 3718 - Vesting instruments 3810 - Medical aid 3906 - Special lump sums 3909 - Unclaimed benefits 3921 - Living annuity, s15C 4003 - Provident fund 4007 - Arrear RAF 4026 - NSF pension 4493 - No 7th schedule medical
3602 - Non-taxable income 3608 - Arbitration award 3614 - Other retirement lump sums 3617 - Labour brokers 3703 - Reimbursive travel<8000km 3708 - Public office 3715 - Subsistence foreign 3801 - General benefits 3813 - Other medical costs 3907 - Other lump sums 3915 - Retirement lump sum 4001 - Current pension 4005 - Medical aid 4018 - Income protection 4030 - Donations
the President, Deputy President, a Minister, Deputy Minister, a member of the National Assembly, a permanent delegate to the National Council of Provinces, a Premier, a member of an Executive Council or a member of a provincial legislature;
any member of a municipal council, a traditional leader, a member of a provincial House of Traditional Leaders and a member of the Council of Traditional Leaders; and
a person occupying the office of president, chairman or chief executive officer of any non-profitmaking organization which is organized on a national or regional basis to represent persons with common interests and the funds of which are derived wholly or mainly from subscriptions of members or donations from the general public.
Tax season is the period in which taxpayers must file their tax returns. The South African Revenue Service begins tax season for individuals on the 1 July each year with tax season usually closing the last Friday of November of the same year.
The medical tax credit, brought in from the 2013 tax year provides for a monthly credit against your tax owing to SARS. If you and/or your dependents belong to a medical aid then you will receive a R242 medical tax credit per month for the first two members and a further R162 per month for every other member or dependent on the same policy. The credit will be deducted automatically off your tax payable. This is different to the previous system where medical aid contributions were deducted against income.
Any income earned as a result of working outside of SA for longer than 183 days in a single calendar year is exempt from tax for the period worked outside the country. However for this to apply, at least 60 of those days must have been continuous (no trips home), and you must have been employed under an employment contract.
Your business activity can be described by a particular source code. To find the relevant code, please select your business sector below and choose the appropriate source code for whether your business made a profit or loss (different codes).