What is tax?
Income tax in South Africa is levied on all income and profit, it is the government's main source of income imposed by the Tax Act No 58 in 1962. It covers all income and profit, including individual, company and trusts. Before 2001 the South African tax system was ''source-based'', meaning that income was taxed in the country that it originated. In
2001 the tax system was changed to ''residence-based'', meaning that South African citizens are taxed on their income, no matter in which country it is generated, while non-citizens are only subject to domestic tax.
The South African Revenue Service (SARS) is responsible for collecting tax in South Africa.
SARS plays the following roles:
- They collect tax.
- They ensure that citizens are tax, customs and excise compliant.
- They provide a customs and excise service to facilitate legitimate trade, which protects our economy and society.
- They contribute directly to economic and social development by collecting money that government uses to deliver on promises.
How is tax collected?
Tax is assessed over a 12-month period starting from 1 March to 28 February the following year, for individuals and trusts, while for companies, the period of assessment is over the financial year the company is registered for.
Tax Made Easy – A Guide for Beginners
The simplest way for individuals to manage income tax matters is to register for SARS e-Filing. All of your relevant tax information is retrievable on your SARS e-Filing profile – your required income tax forms (ITR12 income tax returns), statements of accounts for both income tax as well as penalties, if you have any.
Simply visit www.sarsefiling.co.za to register:
- Select register before you select an individual.
You may have to upload the following documents:
- Your latest IRP5 income tax certificate – this must reflect your income tax reference number.
- Copy of your ID.
- Proof of your residential address.
- A bank statement that reflects the name of your bank, your name, account type and account number.
Please note that none of the documents may be older than three months.
Make sure that your e-Filing registration information, which you submit to SARS, is accurate and up to date.
Don't submit a tax return to SARS:
According to current SARS regulations, you do not need to submit a tax return if you are a normal employee, earning less than R 500 000 per tax year, and were employed by one employer for the full tax year.
You must submit an annual tax return to SARS:
- If you were not employed for a full tax year or changed employment during a tax year.
- If you receive any remuneration other than salary, e.g. a travelling allowance.
- If you have a medical aid or retirement annuity that were not administrated through your employer's payroll.
With Legal&Tax you're not alone
Our advisors are ready to assist you with your tax return submissions and SARS related queries. Contact us for more information.
Disclaimer: The content of this article was correct at the time of publishing, but the legislation or underlying information forming the basis of this article may have changed. You should always speak to a qualified Legal&Tax advisor before making any decisions.
