Tax season 2023 is here – dates, changes and everything you need to know
Tax season 2023 officially kicks off this Friday (7 July), but the South African Revenue Service (SARS) has already got the ball rolling with taxpayers getting their auto-assessment notices from the start of the month.
As the season gets set to kick into full swing, individuals and businesses must be ready to comply with new regulations and rules.
“While complying with SARS’ guidelines may sometimes feel like a burden, it really is necessary to avoid potential penalties or complications,” say Danielle Luwes, a tax manager at tax specialist firm Hobbs Sinclair.
“Familiarising yourself with SARS’ requirements, such as submission deadlines, payment due dates and specific fields for accurate income declaration, will help ensure a smooth tax filing process.”
The tax submission deadlines for the 2023 tax season are as follows:
- Non-provisional taxpayers filing via the eFiling platform or manually:
- Opening: 7 July 2023 @ 20h00
- Closing: 23 October 2023
- Provisional taxpayers filing electronically:
- Opening: 7 July 2023 @ 20h00
- Closing: 24 January 2024
- Provisional Trusts and other juristic persons (such as boards or bodies):
- Opening: 7 July 2023 @ 20h00
- Closing: 24 January 2024
- Company tax returns:
- 12 months from year-end
For non-provisional eFilers, payment due dates have been adjusted as follows:
- Taxpayers who are not in the auto-assessment population: Payment is due 30 days after a notice of assessment has been issued.
- Taxpayers who are auto-assessed: Payment is due 30 days after the filing season 2023 closing date.
Non-provisional taxpayers in South Africa have straightforward tax affairs coming from a standard monthly salary and do not need to make provisional tax payments.
Provisional taxpayers (such as freelancers), on the other hand, have more complex tax situations and must make estimated tax payments during the tax year, usually due to their taxable income not being derived solely from one source of employment.
Luwes stressed the importance of adhering to the above deadlines and regulations, stating: “It is essential for taxpayers to be aware of the submission deadlines to ensure timely and accurate filing of their tax returns. Failure to comply with these deadlines may result in penalties imposed by SARS.”
How to register
To best ensure compliance with income tax laws, SARS says that a taxpayer must first be registered for income tax.
South Africans can be registered automatically for personal income tax when they attempt to register for SARS eFiling, the online platform where people can complete tax-related processes.
A person wishing to register can also register through their employer via SARS eFiling, wherein an employee has a tax reference number provided to them. Furthermore, a person can approach a physical branch to consult a service assistant.
If you are unsure you are already registered, SARS said you can ask your employer, use the SARS online Query function or call our SARS Contact Centre on 080 000 7277.
You can also send a query to SARS requesting a notice of registration (IT150) that would reflect your tax reference number, said SARS.
Submission
Following registration, taxpayers are required to submit an annual income tax return to SARS based on the Gazette.
“Every year, SARS announces its Tax Season, a period during which you are required to complete and submit your annual income tax return. The income tax return which should be completed by individuals is known as the ITR12 (Personal Income Tax Return),” said SARS.
SARS’ full list of tax rates can be accessed here.
Starting from 7 July 2023 at 20h00, taxpayers can access their tax returns through eFiling or the SARS MobiApp to complete and file them online.
Those unable to file online must schedule an appointment to visit a branch. It is important to have all necessary tax certificates, such as IRP5/IT3(a), medical aid, and retirement annuity fund, to accurately determine tax obligations.
It is important, however, to address whether you have already been auto-assessed by SARS before you fill out and submit an ITR12 (example document attached at the bottom of this article).
Auto Assessment
Auto Assessments are a newly introduced procedure from SARS whereby a person is not required to submit an income tax return if they are notified that they are eligible for the assessment.
Taxpayers do not need to take any action if their auto-assessed gross income, exemptions, deductions, and rebates are accurate. Auto assessments will begin on 30 June 2023.
“If any corrections are necessary, it is essential to submit a request for correction within the stipulated 40 business days timeframe. Failure to do so may result in the auto assessment becoming final,” said Luwes.
Things that may be different from before
According to Hobbs Sinclair, provisional taxpayers with business interests must declare their assets and liabilities based on cost.
“Taxpayers falling into this category with assets exceeding R50 million are required to declare specified assets at market values on their 2023 tax returns,” said Luwes.
Furthermore, people must now accurately disclose their foreign income. SARS has placed increased effort on cracking down on funds abroad. Luwes said that the tax authority had added three new fields to accurately declare foreign employment services income subject to tax outside South Africa.
For taxpayers married in a community of property, half of their interest, dividends, rental income and capital gains are subject to taxation.
“SARS has collaborated with the Department of Home Affairs to confirm the marital status and retrieve the ‘Married in Community of Property’ status from previous declarations. In cases where both spouses are successfully matched and have interest investments, SARS will replicate the interest investment certificate on both spouses’ returns, ensuring a fair assessment of 50% taxation,” said Luwes.
Taxpayers who don’t need to submit a return
Financial services firm PwC, in its latest Tax report, listed a handful of instances wherein a taxpayer does not need to submit a tax return.
The group said that 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 received by or accrued regarding services rendered outside South Africa.
ITR12
See an example of the form to fill in for personal income tax:
Read: Lifeline for taxpayers in South Africa – tax experts say you should grab it
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