The 2016 tax season opens on Friday 1 July. The South African Revenue Service (SARS) stated: “During Tax Season, you need to submit your income tax return (ITR12) so we can reconcile the tax on your income and the tax-deductible expenses for the year of assessment (1 March 2015 - 29 February 2016). This may, in some cases, result in a refund.”
The following dates for filing of tax returns are important to remember:
- 25 November 2016 - At a SARS branch (non-provisional)
- 25 November 2016 - eFiling (non-provisional)
- 31 January 2017 - Provisional taxpayers via eFiling
The South African Institute of Professional Accountants (SAIPA) has advised taxpayers to submit their 2016 tax returns as soon as possible. “Taxes have to be paid - it’s effort well spent to get the submission right and on time,” said Ettiene Retief, chairperson of the National Tax and SARS Stakeholders Committees at SAIPA.
What you need to submit your tax return
In order to submit your tax return, SARS highlights that the below supporting documents will be required. However, it notes that it is not necessary to submit all of these documents with your tax return, but it is important to keep them for a period of five years should SARS need them in future.
- IRP5/IT3(a) certificate(s) from your employer or pension fund
- IT3(b) certificates for investment returns
- Financial statements, if applicable e.g. business income
- Medical aid contribution certificates and receipts
- Retirement annuity fund certificates
- Certificates you received for local interest income earned
- Logbook and other documents in support of business travel expenses
- Completed confirmation of diagnosis of disability form (ITR-DD), if applicable
- Any other relevant income and deduction information.
- Bank account details
Tips to get your tax return submitted quickly and easily
Submitting a tax return is something that many people dread mainly because of the perceived complexity of the forms. Retief offers some tips to help taxpayers streamline their tax submission process and avoid unnecessary stress.
- Confirm accuracy of documentation
“Most income is now recorded on tax certificates issued by employers, banks or investment houses. Salary payments, deductions and benefits are found on the IRP5 issued by the employer, while other income earned (such as interest and dividends) is reflected on various ITC3 certificates. The only difference is that no employees’ tax deductions are made for income reflected in an ITC3,” explained SAIPA.
Retief emphasises the importance of ensuring that all information is correct in the documentation, and that all income is disclosed. For example, Retief notes that a common mistake is not recognising the small interest income that may be earned on a medical aid savings account.
“The amount of such interest might be too small to be material, but the point is that SARS gets the information reflected on these certificates and its system will compare the income you have disclosed and what it expects. Even a small discrepancy could cause the system to flag a mismatch,” notes Retief.
In addition to confirming that the information on the certificates is correct, it is also important to check that SARS has the right information pertaining to your bank account.
- Compare this year’s return with last year’s
Retief advises using last year’s tax return as a guide for this year. By doing this you will be aware of any changes that may have taken place, as well as any omissions that may have been made. It also helps to ensure continuity across the various tax return submissions.
For example, if you include your vehicle details in your tax return, then the closing odometer reading for the previous year and the opening odometer reading for the current year should be the same.
“Consider whether you had any additional sources of income or capital gain over the past tax year. These might include rental income, the sale of property or the sale of shares in a business, being mindful of when the income has accrued to you and not only when received,” adds SAIPA.
- Allocation of expenses
When looking at expenses that will be claimed for, it is important that these are allocated accurately. For example, Retief notes that a self-employed person cannot claim all phone costs as a business expense if they were not all business calls. Only those calls pertaining to business can be claimed.
“The same is true of mortgage repayments on a rental property: the capital repayment portion is not a claimable expense, while the interest and fees may be,” stated Retief.
The same attention must be paid to your vehicle logbook. If you receive a travel allowance or use a company car, a logbook must be kept. This must include all information relating to business travelling, including: date, destination, reason for travel and kilometres travelled (including start and finish odometer readings).
- Keep paperwork
Any information or paperwork related to your tax return should be kept in the event that SARS requires it in the future. “Scanning and storing it as a matter of routine is highly recommended, as it needs to be retained for a minimum of five years,” advised SAIPA.
- Ask for help
Submitting a tax return can be complex. If you have a dispute or your tax return is complex, seek professional assistance. “Don’t just submit a return if you are uncertain about something or file an objection if you have a dispute without the required grounds or knowing the procedural rules,” suggests Retief.
If you are submitting your tax return via e-filing, SAIPA point out that the system will not accept files larger than 2MB, however, you can file multi files. “The file that you upload on SARS e-filing cannot have restrictions, such as requiring a password to open the file. It’s also important to be sure that all documents are uploaded before submitting as the system does not permit forgotten files to be loaded later,” adds SAIPA.
