SARS introduced some changes to the automatic assessment process this year to make it easier for taxpayers to file tax returns, says Joon Chong, a partner at Webber Wentzel.
A self-assessment is based on data received from employers, medical aids, banks, retirement annuity funds, etc. the eFiling website or the SARS MobiApp.
Taxpayers can view third-party data that was used to pre-populate the return to verify that the data is correct.
If the taxpayer is satisfied that the self-assessment is correct and contains all relevant information, and a refund is due, they do not need to take any action to “submit” the assessment.
If they are satisfied that this is correct, but they must make a payment to SARS, they must do so before the payment due date shown on the Notice of Assessment (ITA34).
“However, if a taxpayer believes that the auto-assessment is incorrect or does not contain information about all sources of income (e.g., rental) or allowable deductions, they should access and complete their tax return and file within 40 business days,” Chong said.
“If this is not possible, they may request an extension via eFiling or SARS MobiApp before the end of the 40 days or within 21 business days of the 40 days based on reasonable grounds. Extensions beyond 21 days working days will only be granted for exceptional reasons, which may be difficult to justify.
Chong said there are administrative penalties for filing a tax return late.
Previously, penalties only applied when two or more tax returns were overdue. However, as of December 2021, SARS will impose administrative penalties when more than one tax return is overdue.
These penalties are based on taxable income and can range from R250 to R16,000 for each month the return is unpaid. These penalties start accumulating from the first day the declaration is late.
How to prepare
Chong outlined the top 10 things you can do to prepare for the 2022 filing season:
- Sign up for eFiling or SARS MobiApp and skip those queues.
- Check that your bank details are correct and if necessary correct or verify them especially if you are expecting a refund from SARS.
- Gather supporting documents to complete your tax return if you have other sources of income, or if you are claiming medical expenses.
- Check if you are a provisional taxpayer. Provisional taxpayers must file their returns by January 23, 2023, but non-provisional taxpayers have earlier filing dates.
- If you only receive salary and interest of less than R23,800 (under 65) or less than R34,500 (65 and over), and no other source of income, you are probably not a taxpayer provisional. You will need to file your returns by October 24, 2022 (unless you are self-assessed.)
- If you are not a provisional taxpayer and only receive salary and interest from a bank, you can be self-assessed and receive an assessment by SARS pre-populated with third-party data. Look for the text or email from SARS that your self-assessment in the form of an assessment is on eFiling or MobiApp, ready to view.
- Once you have received the SARS self-assessment text or email, log into eFiling and verify the assessment and third-party data used to calculate the tax or refund due. If you are satisfied with the review, you do not need to “submit” the review. (This is different from the 2021 filing season which required you to submit the estimated appraisal.) If you are owed a refund, the SARS website states that the refund process takes approximately 72 hours from the date you the assessment has been issued to you. If you owe SARS tax, you will have to pay before the assessment due date, otherwise there will be interest.
- If you are not satisfied with the assessment, you must obtain and file an eFiling tax return within 40 business days of the date the assessment was issued. (However, if you are not satisfied with the third-party data used, you will first need to have the data corrected with the relevant third party.) The obligation to obtain and complete a declaration within 40 working days is something new this filing season. . For example, if you are self-assessed and you are not satisfied with this assessment that was issued on July 1, 2022, you will need to obtain and complete a tax return by August 29, 2022 (i.e. say 40 business days after July 1, 2022).
- What if you are unhappy with your self-assessment assessment and need more time to complete the tax return? SARS may grant you an extension to file the report if a request with reasonable grounds is made preferably within 40 business days of the date your assessment was issued to you. If you are late, you can always request an extension with reasonable grounds within 21 business days of 40 business days from the date the assessment was issued to you.
- Beware of administrative penalties – and here there is a little uncertainty about due dates for taxpayers who are self-assessed but want to file tax returns and those who are not self-assessed and want file tax returns. It appears (although not 100% clear) that your due date for filing the completed return may be earlier than October 24, 2022 if you are automatically assessed but wish to file a return. If you are subject to automatic assessment and you have an extension to file the return, we suggest that you file the return before the date on which your extension allows you to do so, even if this date is before October 24 2022.
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