Legal and Policy - 22 June 2023

Legal and Policy

SARS:

• 21 June 2023 – Customs Weekly List of Unentered Goods
• 21 June 2023 – Achieving our Vision 2024 of a smart, modern SARS with unquestionable integrity that is trusted and admired is of paramount importance. Pivotal to the delivery of our vision are our digital platforms & technology infrastructure. In order to provide clarity & certainty, make it easy for taxpayers & traders to comply with their obligations and building public trust and confidence, our technology assets have to demonstrate the highest levels of availability, robustness and security.

Pursuant to our Vision and Strategic Objectives, which include modernising our systems to provide Digital and Streamlined online services, we are hard at work ensuring that our digital platforms & technology infrastructure are available, robust & secure, by performing regular upgrades, enhancements, and maintenance.

• In light of the above, a SARS Systems upgrade is scheduled for Friday, 23 June from 18:00 to 23:00. During this time, you may experience intermittent service interruption on the eFiling platform.
• 21 June 2023 – Value-Added Tax Act, 1991

Binding General Ruling 64 – Temporary application of new dwellings for exempt supplies simultaneously held by developers for taxable purposes

• 20 June 2023 – Tax workshop schedules for Gauteng province during July 2023 are now available.
• 20 June 2023 – Pop up branch schedule for Musgrave Shopping centre in KwaZulu-Natal – 29 and 30 June 2023
• 20 June 2023 – The Government Gazette No. 48791 prohibiting the export of waste and scrap metal for ferrous metal and copper (HS codes 72.04 & HS codes 7404.00 and their sub-categories) was published.

The additional six months prohibition is to ensure the Phase 2 Actions of the policy gazetted in 2022 can be fulfilled accordingly. This includes the publishing of updated Regulations of the Second Hand Goods Act, implementation of a metal trading system, updating of systems and other further actions as identified.

• 20 June 2023 – The following form and system changes will be introduced for Trust Filing Season.

The filing period for Trusts that are non-provisional taxpayers opens on 7 July and closes on 24 October 2023, and for Trusts that are registered for provisional tax, it opens from 7 July 2023 and closes on 24 January 2024. In addition, the beneficiaries, and donors (where deeming provisions apply) of a Trust must declare their income that was vested in a beneficiary by the Trust during the year of assessment in their income tax returns.

SARS continues to improve its service offerings, systems and processes related to the filing of income tax returns for Trusts (ITR12T). We believe that these changes will provide taxpayers with the clarity and certainty they require to meet their tax obligations, making it easier for them to comply.

The annual notice, issued by the Commissioner, requires of ALL Trusts to submit a Trust return. It is thus imperative that all representative taxpayers of Trusts (trustees) ensure compliance in this regard.

With effect from 23 June 2023, SARS will introduce changes to the Income Tax Return for Trusts (ITR12T), eFiling enhancements, i.e., additional questions to the Income Tax Return Wizard to be completed, and mandatory supporting documents that must accompany the return.

The changes being introduced include, amongst others:

• Updates to the wizard on the Trust return
• Additional Questions to determine if any Local or Foreign amount(s) were vested in the Trust as a beneficiary of another Trust or deemed to have accrued in terms of s7 during this year of assessment; and the number of Trusts from where these amounts were received.
• A Simplified Return for Passive Trusts
• To provide for a less cumbersome return, where limited Trust specific activities occurred during the year of assessment. The wizard and guide will provide guidance in this regard. The taxpayer must ensure that the correct “type” of return is selected on the first page of the tax return (Income Tax Return Wizard).
• Other enhancements to the Trust Return (ITR12T)
• A new field for credit agreements and debtors’ allowance “Lay Byes” (S24) has been added under both sides of Special Allowances not claimed in the Income Statement and Allowances/Deductions.
• Beneficial Ownership Declaration page to record all beneficial owners and those who may gain financially from the proceeds of the Taxpayer.
• Based on the wizard question above (relating to distributions received from other Trusts), the required number of containers for these distributions will be opened in the return. This will allow taxpayers to provide the detail of the distributions received from other Trusts into the individual containers (e.g. distributions received from 5 other Trusts, 5 containers will automatically be opened).
• Supporting documents to be submitted with the ITR12T
• All mandatory supporting documents must be uploaded and submitted with the Trust return. This includes, amongst others, the Trust instrument, Annual Financial Statements and resolutions/minutes of trustee meetings. The requirements will vary according to the Trust type. (Use the drop-down menu to check the required supporting documents).
• Enhancements to eFiling
• A pop-up notification when the return type is selected. Should the taxpayer select an incorrect tax type based on their registration, this pop-up notification will alert the taxpayer to select the correct return.

Managing Tax Compliance Matters

Trusts are included in the definition of a “person” in terms of the Income Tax Act, 1962 (ITA), and as such, the representative taxpayer (trustee/s) has a responsibility to register all Trusts for income tax purposes.

Note that the representative taxpayer (the trustee/s of a Trust) or the appointed tax practitioner MUST file an income tax return for the Trust on an annual basis in terms of the annual notice and during the Trust return filing period.

We have made it easier for you:

• The quick and convenient way to obtain and file a Trust Return (ITR12T) is to register as an eFiler on SARS eFiling, request the return, and then customise it by completing the questions on the first page (wizard) of the return.

• To register a new Trust for income tax and submit supporting documents, use our online platforms on the SARS website at sars.gov.za in the SARS Online Trust Registration link.

• 20 June 2023 – What are the changes this year? SARS has made the following updates for the upcoming Personal Income Tax (PIT) Filing Season:

Aligning the 40 Business Days Rule to the Filing Season End Date

Last year, when the rule was first introduced, those in the auto-assessment population were granted 40 business days from the issue date of the auto-assessment to revise their return if they needed to amend their auto-assessment.

This year, we are extending the 40 business days to coincide with the normal filing due date for non-provisional taxpayers, which is 23 October 2023. This will give those in the auto-assessment population more time to file a return if they wish to edit their auto-assessments.

Payment Due Dates

This year, the payment due date for non-provisional eFilers will be adjusted as follows:

• For taxpayers who are not in the auto-assessment population, payment due date will be 30 days after a notice of assessment has been issued,

• For taxpayers who are auto-assessed, payment due date will be 30 days post Filing Season 2023 closing date.

Statement of Assets and Liabilities

Provisional taxpayers with business interests are required to declare their assets and liabilities (based on cost) in their tax returns each year. Taxpayers who fall within this category, and with assets above R50 million, are required to declare specified assets at market values on their 2023 tax returns.

Foreign Income Disclosure

SARS introduced a Foreign Income container on the return for taxpayers who must declare worldwide foreign income, however it was noted that taxpayers who must declare income sourced from a foreign employer while working in South Africa and/or abroad do not have an appropriate source code to declare remuneration for foreign service rendered income. The following three new fields will now apply.

• New field “Income received from foreign employment services not reflected on a South African IRP5/IT3(a) certificate, subject to tax outside RSA and the s10(1)(o)(ii) exemption does not apply”.

• New field “Income received from foreign employment services not reflected on a South African IRP5/IT3(a) certificate, subject to tax outside RSA and the s10(1)(o)(i) exemption applies.”

• New field “Income received from foreign employment services not reflected on a South African IRP5/IT3(a) certificate, subject to tax outside RSA and the s10(1)(o)(i) exemption does not apply.”.

Spouses Married in Community of Property Assessment

Taxpayers who are married in community of property are taxed on half of their interest, dividends, rental income, and capital gains. This Filing Season SARS has retrieved “Married in community of property” status from taxpayer’s previous declaration and collaborated with the Department of Home affairs to confirm marital status. Where the spouses are successfully matched and have interest investments, SARS will replicate the interest investment certificate on both spouses’ return where they will be taxed 50% upon assessment.

Section 93 Reduced Assessment

SARS has automated the process of requesting Reduced Assessment in terms of section 93 of the Tax Administration Act. The process will use a form called RRA01 where taxpayer will be able to complete it on eFiling. This will enable efficiency and reduce costs for taxpayers.

Keep an eye on the Filing Season 2023 webpage.

• 20 June 2023 – During the month of June 2021, SARS introduced the PAYE Admin Penalty solution. The implemented interim solution provided SARS with the ability to impose PAYE administrative penalties, which meant charging admin penalties for the failure to submit EMP501 reconciliations on time.

PAYE admin penalty was divided into 3 phases with the first 2 phases having already being implemented as follows.

• Phase 1 was implemented in June 2021; and

• Phase 2 was implemented in April 2022

SARS is currently in the process of implementing phase 3, on 23 June 2023, which aims to incorporate the legal changes that were effected on the 19th June 2022. The PAYE Admin Penalty Phase 3 will include:

• Admin Penalty Imposition – “Para 14(7) If the total amount of employees’ tax deducted or withheld, or which should have been deducted or withheld for the period described in subparagraph (3), is unknown, the Commissioner may estimate the total amount based on information readily available and impose the penalty under subparagraph (6) on the amount so estimated”;

• Admin Penalty Adjustment – “Para 14(8) Where, upon determining the actual employees’ tax of the person in respect of whom the penalty was imposed under subparagraph (7), it appears that the total amount of employees’ tax was incorrectly estimated under subparagraph (7), the penalty must be adjusted in accordance with the correct amount of employees’ tax with effect from the date of the imposition of the penalty under subparagraph (6) read”

It is important to note that the effective date of the enhancement to the admin penalty process (imposition and adjustment) will only be from the date of promulgation (19 January 2022). The legal changes to the admin penalty imposition and adjustment rules may not be applicable to any recon period prior to 19 January 2022, which means that this takes effect for recon period 202202 and onwards.

• 15 June 2023 – Tax workshop schedules for Mpumalanga province during the last two weeks of June are now available.
• 15 June 2023 – RFP07/2023

Provision of armed response security and alarm monitoring services

• 15 June 2023 – Binding Private Rulings

• Binding Private Ruling 394 – Instalment sale agreements and their sale to a non resident
• Binding Private Ruling 393 – Income tax consequences resulting from consecutive asset-for-share transactions
• Binding Private Ruling 392 – Sale of shares in a controlled foreign company (CFC)
• Binding Private Ruling 391 – Tax consequences of the termination of an en commandite partnership
• Binding Private Ruling 390 – Disposal in anticipation of liquidation
• 15 June 2023 – Tax Administration Act, 2011

SARSTC IT 24502 (ADM) [2023] ZATC 7 CPT (2 June 2023)

An opposed interlocutory application in terms of rule 51 (2) of the tax court rules for ‘a legality review in limine as part of’ the appellant’s pending tax appeal.

• 15 June 2023 – General

Draft Guide – Tax Treatment of the Net-billing Tariff System for Excess Power Generated

Due date for comment: 30 June 2023

• 15 June 2023 – RFP05/2023: Appointment of a service provider for integrated pest control management services

More information is now available in the following document:

• Questions and answers

NATIONAL TREASURY:

• Media Advisory: SA-TIED Policy Debate – 21 June 2023
• Media Statement: SEADsa Launch – 20 June 2023
• Speech by Minister of Finance Enoch Godongwana, MP, at the Launch of the (SEAD-SA): South Africa Launch – 19 June 2023

OECD:

• Continued progress on countering harmful tax practices as jurisdictions bring their preferential regimes in line with international standards - 21 June 2023