SARS announces 2024 tax changes
The South African Revenue Service (SARS) has announced a host of tax changes and document updates as the next phase of the 2024 tax season kicks off.
16 September 2024 marks the opening of tax season for trusts in South Africa. The filing window is open until 20 January 2025, the same end date as provisional taxpayers.
The 2024 tax season marks the first time trusts have their own filing window, largely due to the changes that came into effect in 2023 and 2024, which give the revenue service room to delve deeper into their tax affairs.
SARS has made it clear that trusts and their beneficial owners are key targets as it tries to meet its collection targets and curb non-compliance.
In 2023, it expanded its third-party reporting standards to include trusts – local and foreign, where applicable – which are required to submit returns containing third-party information as specified by SARS.
Significant amendments were made to the trust income tax return, with these changes continuing in the 2024 tax season.
| Tax Season 2024 | Start date | End date |
| Individual Taxpayers (Non-Provisional) | 15 July 2024 | 21 October 2024 |
| Provisional Taxpayers | 15 July 2024 | 20 January 2025 |
| Trusts | 16 September 2024 | 20 January 2025 |
SARS reminded trusts that the deadline for IT3(t) third-party data returns is 30 September 2024.
The IT3(t) shows all amounts vested to the beneficiaries of the trust for a specific year of assessment.
“These amounts are not limited to income, but also include capital gains and other capital amounts such as repayment of contributions. Trustees must submit the IT3(t) return,” SARS said.
Although the trustees may delegate this duty to a representative or tax practitioner, the trustees are still liable for the prompt and accurate submission of the IT3(t) return.
Given the wider changes for trusts, they must now provide more detailed information in several key areas, including:
Beneficial Ownership
One major change is the requirement for the detailed disclosure of the beneficial ownership of the trust. Trusts must now provide comprehensive information about individuals, including beneficiaries identified as beneficial owners.
Accurate reporting of this information is crucial for compliance.
Income and Activities
Trusts are now required to disclose detailed information about their income and activities. This includes comprehensive reporting on all income sources, the nature of the trust’s activities, and how these activities align with the trust’s objectives.
This helps SARS verify that trusts are used appropriately and transparently.
IT3(t) Reporting
In line with its modernisation efforts, SARS is expanding third-party data information requirements. Trusts must now declare distributions to beneficiaries annually through IT3(t) reporting.
Compulsory Upload of Supporting Documents
Sufficient documentation is required to support the information disclosed in the trust income tax return.
Especially since all trust taxpayers are now subject to a compulsory upload of supporting documents upon filing their tax return, trusts must maintain accurate and complete supporting documents to demonstrate compliance.
This includes trust financial statements, resolutions, and any other relevant documentation verifying the trust’s financial activities.
On top of the changes outlined above, SARS has made changes to the forms that need to be submitted in the filing process. These include:
- Enhanced deductions for certain items used in renewable energy production to increase the appeal of the tax incentive and encourage greater private investment in renewable energy.
- Extending the Urban Development Zone tax incentive by two years, from 31 March 2023 to 31 March 2025.
- Clarifications on loans, advances, or credit granted to Trusts by connected persons
- Donation questions have been updated to allow the taxpayer to enter up to 20 approved organisations.
- A new feature has been introduced to manage requests for reduced assessments for companies. Taxpayers must complete the Request for Reduced Assessment (RRA02) form, which will generate a case to determine whether they qualify for a reduced assessment.
- The Beneficial Ownership section has been updated with clarifications to assist in completing information for unnamed beneficiaries.
SARS said it is also in the process of enhancing the letters it issues to taxpayers regarding the specific supporting documents required when they have been selected for verification.
Corporate tax changes
SARS has also implemented other tax changes for Corporate Income Tax.
As with the changes for trusts, these relate mostly to clarifications and enhancements on SARS’ documentation to make it easier for these taxpayers to comply.
Many of the changes are also reflected in the changes for trusts.
Changes include:
- Tax treatment of an asset acquired as a government grant in kind: If a taxpayer acquires an asset as or with a government grant, wear and tear cannot be claimed on the asset. This also means that even if the taxpayer uses the grant to buy another asset, that something cannot be depreciated either (for tax purposes).
- Credit Agreements and Debtors Allowance: A new field for “Credit agreement and debtors’ allowance (lay-by) (s24)” will be added to the ITR14 return. This is an allowance that can be claimed in the current year, but it needs to be reversed in the following year.
- Additional deduction in respect of learnership agreements: A deduction for learnership agreements can only be allowed if the agreement was entered into before 1 April 2024 and therefore a new validation question will be added to the ITR14 return asking the taxpayer to declare that the agreement was entered into before 1 April 2024.
- Refinements to the Research and Development Tax Incentive: Together with the name change to “Department of Science and Innovation”, a new qualification question will be added to the “Tax Allowances / Limitations” container to allow taxpayers to indicate that their incentive approval was not withdrawn.
- Expenses incurred in the production of interest: In terms of s11G, taxpayers must limit interest expenses to non-trading interest income. An adjustment field will be added to the tax computations for all company types, thereby allowing taxpayers to add back non-allowable interest.
- Enhanced Deduction in respect to certain machinery, plant, implements, utensils, and articles used in the production of renewable energy: The ITR14 will be updated to allow taxpayers to claim an s12BA allowance. A container will be created for deduction details and qualifying questions. A validation will ensure that the taxpayers claim their 125% deduction.
- Extension of the Urban Development Zone (UDZ) Tax Incentive sunset date: The UDZ tax incentive sunset date is extended by another period of two years from 31 March 2023 to 31 March 2025.
- Request for Reduced Assessment (RRA02): New functionality has been introduced to manage requests for reduced assessments for companies under s93 of the Tax Administration Act (TAA). Taxpayers are required to complete the Request for Reduced Assessment (RRA02) form. A case will then be created to assess whether the taxpayer qualifies for a reduced assessment.
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