A Corporate Tax Checklist for Business Owners
Submitting your company income tax return (ITR14) to the South African Revenue Service (SARS) involves far more than simply sending your trial balance to your accountant. Unlike individual tax submissions, corporate returns require detailed reconciliation across multiple operational tax types, including Value Added Tax (VAT), Pay-As-You-Earn (PAYE), and Provisional Tax. Missing key schedules or failing […]
Claiming Medical Scheme Tax Credits
Belonging to a registered medical scheme doesn’t just protect your health. It also comes with a built-in tax benefit. SARS refunds part of what you pay in medical scheme contributions through a system of tax credits, lowering your overall tax bill simply for staying covered. Do you know how it works, and if you qualify, […]
Tax Rules You May Not Agree With, But Need to Plan For
Do you ever get the sense that SARS sometimes wants to have their cake and eat it? By this, I’m talking about situations where it appears that having already extracted tax on a particular amount received, SARS takes a second bite at the cherry. And on the fact of it, that’s not fair! I often […]
Understanding Residency in Terms of Tax
When earning an income in South Africa, you are probably paying tax. The Income Tax Act 58 of 1962 (“the Act”) describes gross income as: “(i) in the case of any resident, the total amount, in cash or otherwise, received by or accrued to or in favour of such resident; or (ii) in the case […]
Understanding Your Rights as a Taxpayer: Tax Assessments and the Promotion of Administrative Justice Act (PAJA)
We all pay taxes in one way or another, but as a taxpayer, it is important to understand your rights when dealing with tax authorities, the laws applicable, and whether your constitutional rights might be affected. One of the most common taxes paid is personal income tax. A critical aspect thereof is tax assessments, which […]
Declaring Too Much Income to SARS?
It sounds crazy, but it happens more often than one would think… Many a taxpayer has experienced the wrath of SARS when failing to declare all of their income. The penalties for non-declaration of income are severe—up to 200% of the tax evaded as a consequence of not declaring an amount that is taxable. But […]
When SARS Says ‘No’, They Must Tell You Why
Taxpayers have the right to obtain reasons for decisions by SARS. When I was about three years old, my mother admonished me not to play with matches, and like the precocious brat I was, I demanded to know “why”. Many a parent, faced with similar demands from their offspring, would be tempted to exert parental […]
Long-term goals, or short-term gains?
More than a million applications have already been lodged with the South African Revenue Service (SARS) to pull funds out of their savings. Given that this amounts to R21.4 billion, that’s a frightening amount of money for a country that doesn’t have a savings culture. What with more people withdrawing cash under the Two Pot […]
Expenses must be intended to produce taxable income
To successfully deduct an expense, there must be a link to earning taxable income. Section 11(a) of the Income Tax Act, the so-called ‘general deduction formula’, seems to have produced more court cases than virtually any other Section of the Act. And each time, the courts tell us the same thing: In order for you […]
The costs of deceased estates explained
An important function of an executor, the person who is appointed by the Master of the High Court to administer a deceased estate, is to account for the liabilities in the estate of the deceased. Keep in mind that only once the liabilities in the estate have been discharged can the heirs receive their inheritances. […]