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2024 Legal and Policy

Legal and Policy - 5 September 2024

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SARS

  • 29 August 2024- The South African Revenue Service (SARS) notes with concern the article carried by the Sunday Times (25 August 2024) regarding the hijacking of taxpayers’ profiles.

Under normal circumstances, SARS is prohibited by Chapter 6 of the Tax Administration Act 28 of 2011 from divulging confidential taxpayer information. However, since the taxpayer has authorised that its information be published in the article, SARS will clarify the matter.

SARS has extensively investigated the alleged crime with the sole purpose of uncovering any internal irregularities or alleged complicity by SARS staff that may have compromised the systems of the organisation.

SARS has over the years built internationally recognised and user-friendly systems to make it easy and simple for taxpayers to comply with their legal obligations. These systems include built-in oversight of each transaction to safeguard taxpayer information and ensure internal accountability.

See the full media release here.

  • 29 August 2024 – General
  • 30 August 2024 – As you are aware SARS has been making system enhancements to the Tax Directives process to accommodate the Two-Pot Retirement Scheme. While trade testing had already commenced on 1 July 2024, it should be noted that the trade testing has been extended to 30 August 2024 to allow for the testing of the latest changes that had been incorporated into IBIR-006 Tax Directives interim Interface Specification Version 6.706. These updates include:
  • Form A&D and Form C validations, regarding the 1/3 allowable lump sum.

The current trade testing link will remain active for trade testing and the NCTS mailbox will remain open until 30 August 2024.

All submissions for trade testers and ISVs to SARS must be concluded by 15h00 on 30 August 2024 and will be processed as normal. Any submission received after this cut off time will be rejected. Please note all ISV submissions to SARS henceforth must be based on the IBIR-006 Tax Directives interim Interface Specification Version 6.706 requirements. The steps for submitting test files remains the same as previously communicated.

For trade testing queries please email ncts@sars.gov.za.

  • 30 August 2024 – South Africa recorded a preliminary trade balance surplus of R17.6 billion in July 2024 attributable to exports of R175.0 billion and imports of R157.4 billion.

The year-to-date (01 January to 31 July 2024) preliminary trade balance surplus of R85.3 billion was an improvement from the R30.3 billion trade balance surplus for the comparable period in 2023. On a year-on-year basis, export flows for July 2024 (R175.0 billion) were 1.9% higher compared to R171.8 billion recorded in July 2023. Import flows were higher by 1.1%, having increased from R155.7 billion in July 2023 to R157.4 billion in the current period.

See the full Media Release here.

Or visit the Trade Statistics webpage.

  • 30 August 2024 – Customs and Excise Act, 1964: Rule amendment notice R5158, as published in Government Gazette 51131 of 30 August 2024, to effect miscellaneous amendments to rules under sections 21 49F 49G 59A and 120 (DAR258)
  • 30 August 2024 – Tax Administration Act, 2011
  • 30 August 2024 – Tax Administration Act, 2011
  • 30 August 2024 – Income Tax Act, 1962

Due date for comment: 30 September 2024

  • 2 September 2024 – The state provides state warehouses for the safekeeping of goods. These are managed by Customs. The purpose of this list of unentered goods is to notify the importer, exporter and any other person that has interest in the goods that the goods have been taken up into the State warehouse and if they remain unentered they will be disposed in accordance with the provisions of the Customs & Excise Act.

See the latest Customs Weekly List of Unentered Goods here.

  • 2 September 2024 – From 1 September 2024, members of pension funds, provident funds, pension preservation funds, provident preservation funds, and retirement annuity funds (collectively referred to as ‘the Funds’) will be able to access a portion of their retirement savings in the member’s retirement fund as a cash payment while still a member of that fund. Retirement funds will now be split into the following:
  • Vested Component:
    • This is the total value of the member’s interest as at 31 August 2024, less 10% of that value, capped at R30 000 to be allocated to the Savings Component as seed capital.
    • The payment of the remaining balance in the Vested Component as a lump sum benefit, before retirement, will not be impacted by the two-pot retirement system.
  • Savings Component:
    • One-third of the members retirement fund contributions, will be allocated to the Savings Component. This is in addition to the seed capital amount, which is 10% of the Vested Component, capped at R30,000, whichever is lower.
    • The member can withdraw a minimum of R2000, up to the maximum value available in the member’s Savings Component once every tax year. These withdrawals from the Savings Component are called Savings Withdrawal Benefits.
    • At retirement, the remaining balance in the Savings Component (if applicable) the member can elect to add this to their retirement fund lump sum to be taken in cash.
  • Retirement Component:
  • Two-thirds of the members retirement fund contributions will be allocated to the Retirement Component. This component will be used to pay the member a pension or purchase an annuity upon retirement, subject to certain exceptions.
  • This amount cannot be taken as a lump sum if the member terminates membership in the fund before retirement as a result of resignation, dismissal, withdrawal or retrenchment and must be transferred to another fund.

A member, who has already reached the normal retirement age but has not elected to retire, may transfer their retirement fund to another approved pension fund / provident fund when the employer, for example, establishes a new approved pension or provident fund without incurring any tax liability.

The tax directive system and application forms have been enhanced to accommodate requests for the Savings Withdrawal Benefit and for transfers of the Vested Component, Savings Component, and Retirement Component to another fund.

For an overall view, see the new Two-pot retirement system webpage, with FAQs for taxpayers and the Funds, as well as:

Updated forms for the enhanced Tax Directives process:

    • Will now allow for the Savings Withdrawal Benefit to be paid out to a member of the Fund
    • The Savings Withdrawal Benefit will be taxed using the annual payment/bonus tax calculation based on the taxpayer’s marginal rate of tax. No retirement rates, allowable deductions, exemptions or tax-free amounts will be used in this calculation. Therefore, it is mandatory for the taxpayer to be registered for income tax and can provide the fund with a Tax Reference number (TRN).
    • The IT88L stop order will be attached to the tax directive where the taxpayer has outstanding taxes to be paid over to SARS. The types of outstanding taxes can include Assessed Tax, Provisional Tax and Administrative Penalties.
    • A new Reason ‘Involuntary transfer before Retirement [Par 2(1)(c)]’ has been introduced on Form A&D for involuntary transfers to pension or provident funds in addition to the existing reason ‘Voluntary transfer before Retirement [Par 2(1)(c)]’.
    • The Vested Component, Savings Component and the Retirement Component fields have been added to the form to allow for transfers to another fund when these two reasons are selected.

The following three new tax directive reasons have been added for transfers on or after 1 September 2024:

    • Two Pot-Transfer: All Components Inter-Fund Transfer
    • Two Pot-Divorce Transfer: All Components (Inter-Fund Transfer)
    • Two Pot-Par (eA) Transfer/ Payment: All Components (Inter-Fund Transfer).

The following two new tax directive reasons have been added for transfers on or after 1 September 2024:

    • Two Pot-Transfer Prior to Retirement: All Components (Inter-Fund Transfer); and
    • Two Pot-Divorce Transfer: All Components (Inter-Fund Transfer).
  • Recognition of Transfer between Approval Funds (Form ROT01):
    • The ROT01 form has been updated to accommodate the new two-pot transfer reasons. The receiving fund will now be able to confirm the receipt of the different components that have been transferred.
    • Handling Discrepancies in Transferred Amounts: If the amount transferred to the receiving fund differs from the amount received for all the components transferred, and the reason for the discrepancy is the same for all components, the fund can provide a single reason for the variance and indicate that it applies to all components.
  • Application by Non-Residents for a Directive for Relief from SA Tax for Pension and SWB (RST01Form):
    • An interim process has been introduced to accommodate non-residents wishing to confirm the application of a Double Taxation Agreement (DTA) on the Savings Withdrawal Benefit income.
    • An individual who is not a tax resident of South Africa and receives income from a South African source may apply for a directive for relief from South African tax on the Savings Withdrawal Benefit. The request should be made under the DTA in place between South Africa and the non-resident’s country of residence.
    • The RST01 – ‘Application by Non-Resident for a Directive for Relief from South African Tax for Pension, Annuities and ‘Savings Withdrawal Benefit’ form has been enhanced to allow non-residents to request relief from South African tax on the payment of the Savings withdrawal Benefit.
    • Once the DTA tax directive has been issued and it is determined that the Savings Withdrawal Benefit is either subject to tax in South Africa or partially subject to tax:
        • The taxpayer must provide the DTA tax directive to their Retirement Fund.
        • The fund administrator must submit a manual IRP3(a) form requesting SARS to issue a manual tax directive (IRP3(e)) giving effect to the DTA tax directive issued.
    • SARS must issue a manual IRP3(e) showing a nil tax amount if the income is not subject to tax in South Africa or a manual IRP3(e) showing the tax amount to be withheld where the income is partially taxable in South Africa.
    • A non-resident who does not qualify for relief from South African tax must follow the standard process, where the Retirement Fund applies for the Savings Withdrawal Benefit on their behalf using the electronic IRP3(a) form available on eFiling or via Independent Software Vendors (ISV).

Updated Guides for the enhanced process:

ATAF

NATIONAL TREASURY

AuthorLegal and Policy
DivisionTax
Keywords
Legal and Policy
5 September 2024
Categories
Legal and Policy
Date5 September 2024