Finance

These taxpayers don’t have to submit a tax return this year

Luke Fraser

 ·28 Jun 2023

The South African Revenue Service (SARS) will soon open the 2023 tax season for taxpayers to submit their income tax returns for the 2023 year of assessment; however, not all taxpayers have to do so.

Tax season for income tax starts on 7 July 2023 and will last until 23 October for individual taxpayers and until 24 January 2024 for provisional taxpayers:

• Individual taxpayers (non-provisional): 7 July 2023 @ 20:00 to 23 October 2023
• Provisional taxpayers: 7 July 2023 @ 20:00 to 24 January 2024

Tax season can be an incredibly stressful time for individuals and businesses, with taxpayers who fail to submit their returns on time facing penalties.

However, not all taxpayers have to submit an income tax return, with PwC providing a detailed breakdown of those who do and those who don’t.

Taxpayers who don’t need to submit a return

A natural person – or estate of a deceased person – is not always required to submit an income tax return if their gross income consists of one of the following:

• Remuneration not exceeding R500,000 from a single source and employees’ tax has been withheld in respect of that remuneration;
• Interest income from a South African source (excluding a tax-free investment) not exceeding:
  • R23,800 for a person younger than 65;
  • R34,500 for a person who is 65 years
    or older; or
  • R23,800 for a deceased person’s estate;
• Dividends where the individual was a non-resident throughout the year of assessment;
• Amounts received or accrued from tax-free investments
• A single lump sum received from a pension fund, provident fund, pension preservation fund, provident preservation fund or retirement annuity fund and tax has been deducted in terms of a tax directive.

However, these exemptions do not apply to those in the following circumstances, for example, if a person is:

• paid or granted certain allowances/advances relating to business travel, accommodation or subsistence;
• granted taxable benefits relating to the use of a motor vehicle; or
• any amount was received by or accrued regarding services rendered outside South Africa.

Auto assessments

SARS has noted that a natural person is not required to submit an income tax return if they are notified by that they are eligible for auto assessment.

No action is required if the taxpayer’s gross income, exemptions, deductions and rebates, as auto-assessed, are complete and correct.

Auto assessments are expected to start rolling out on 30 June 2023.

If taxpayers do not accept the auto assessment, they will then be required to file a tax return. SARS is giving until the due date of 23 October 2023 to do so.

Taxpayers who need to submit a tax return

However, many taxpayers in South Africa will still have to submit their tax returns – these are the criteria:

• Every resident company or resident juristic person who, during the year of assessment:
  • had gross income of more than R1,000;
  • held assets with a cost of more than R1,000 or liabilities of more than R1,000 at any time;
  • derived any capital gain or loss exceeding R1,000 from the disposal of an asset; or
  • had taxable income, taxable turnover, an assessed loss or an assessed capital loss.

• Every non-resident company, trust or other juristic person that:
  • carried on a trade through a permanent establishment in South Africa;
  • derived South African sourced income; or
  • derived any capital gain or loss from a disposal of an asset.

• Every South African incorporated/established company that is, as a result of an applicable double taxation agreement, not a resident in South Africa.

• Every resident trust.

• Every individual who:
  • was a resident and carried on any trade (other than solely as an employee);
  • was not a resident and carried on a trade in South Africa (other than solely as an employee);
  • was a resident and had capital gains or losses exceeding R40,000;
  • was not a resident and had capital gains or losses from the disposal of any asset;
  • was a resident and held foreign currency or owned assets outside of South Africa which had a total value of more than R250,000 at any stage during the year;
  • was a resident to whom any income or capital gains was attributed;
  • was a resident and held any participation rights in a controlled foreign company;
  • was a resident and had taxable turnover; or
  • at the end of the tax year:
    • was under the age of 65 and had gross income exceeding R91,250;
    • was 65 years or older (but under the age of 75) and had gross income exceeding R141,250;
    • was 75 years or older and had gross income exceeding R157,900

• Estates of deceased persons which had gross income.

• Every non-resident with South African sourced interest income if:
  • the person is an individual who was present in South Africa for 183 days in total in the 12 months before receipt or accrual of the interest;
    or
  • the debt from which the interest arises is connected to a permanent establishment of the person in South Africa.

• Every person who is requested by SARS in writing to file a return (irrespective of income/nature of receipts/accruals of the person).

• Any representative taxpayer of any person listed above.

PwC said that taxpayers must ensure that they pay attention to the deadlines stipulated by SARS to avoid any penalties.

In addition, PwC said that anyone in the auto-assessment population must ensure that they pay attention to the auto-assessment process and determine if they need to file a return.

Read: SARS is fining expats even if they don’t owe tax – here’s what to do