The first and very important note to make, in dealing with South African tax issues: tax year 2014 ends on the last day of FEBRUARY 2014. The South African tax year for most individuals, are 1 March until the last day of February in the next calendar year. Corporates can change their tax year-end to align with the last day of their financial year-end, yet Trusts partners in a JV or partnership, are obliged to file assuming a tax year-end on the last day of February, despite their financial year-end being the last day of another month.
Yes, sadly this date, Friday 28th 2014, is not even listed on the SARS webpage on important dates, yet is an extremely important tax deadline.
SARS has two webpages namely: www.sars.gov.za and www.sarsefiling.co.za.
The President’s State of the Nation Address will be delivered in Parliament on 13 February 2014, and 13 days later the Finance Minister Pravin Gordhan will present the budget speech to Parliament (26 February 2014, around 2 pm)
On 28 February 2014, the following tax compliance issue should have been dealt with:
1. Provisional tax return (IRP6) is due for filing and payment;
2. VAT return i.r.o. VAT period ending 31 January 2014, needs to be eFiled and paid.
3. Users of company cars and recipient of travel allowances, need to close of their logbooks and start a new logbook as of 1 March 2014.
4. Do a dry run IRP5 reconciliation, probably long before the last day as the employee’s tax certificates need to be issued soon and apply tax adjustments to be done before month end and be deducted from staff’s February payroll. The IRP5 is a certificate of employee income and is equivalent to the IRS Form W-2 and the P60 in UK and Ireland.
Other important tax dates in the 2014 calendar year:
5. On every 7th of the month, or the last business day on or before the 7th, pay over the pay roll taxes (PAYE) to SARS on form EMP201;
6. On the 25th of every month file VAT201 returns – for eFile clients there is a later date, being the last business dat of the month to file. Do note push through payments initiated on the last business will normally attract a falt 10% penalty as the process takes 24-48 hours to complete
7. 31 January 2014 – deadline iro 2013 tax returns (provisional) taxpayers are due to SARS
8. 31 May 2014 – Employer’s Tax Season Ends – IRP5 recon must now be filed and staff be issued their tax certificates
9. 1 July 2014 – Start of tax filing season 2014 (individuals) i.r.o. February 2014 tax year-end IT12 returns. FBAR and FATCA are expected to be big issues in this 2014 tax filing season as SARS is about to enter into a FATCA compliance agreement with the IRS.
10. 31 August 2014 – file and pay the first provisional tax return for tax year-end February 2015
11. 1 September until 31 October 2014 – filing of interim 2015 IRP5 recon filing (this is iro of 2015 tax year)
12. 27 September 2014 – End of Personal Income Tax – Manual Forms Submission i.e. taxpayers not using eFiling
13. 21 November 2014 – Deadline for eFiling tax filer iro February 2014 tax year-end, end of tax filing season
In terms of the Tax Administration Act, the following tax yes are administered and collected by SARS:
A. Income Tax – one annual form IT12 (for individuals on PIT system) and IT14 for companies (on CIT) are to be file, and two provisional tax returns (IRP6) are filed, one end August and one en February.
B: PAYE or Pay As Your Earn – it is part of the Income Tax Act (Schedule 4) yet administered as a separate tax unit, using form numbers commencing with EMP (as in EMPloyee) or IRP (Inland Revenue Person)
C: DWT or dividend withholding tax, currently 15% on all dividends to non-residents, SA resident individuals and much lower where there is treaty rules applicable.
D: VAT of value-added tax using form reference VAT.
E: Provisional Tax – part of the income tax system, iro tax to be collected where no PAYE or other withholding taxes were paid. The system operates on gross income basis where total tax due is reduced by PAYE credits, qualifying foreign tax credits and finally withholding tax credits.
Failing to file any of the above returns on the schedule dates, listed above, can result in SARS denying a tax good standing certificate. In South Africa tax practitioners can’t renew their annual registration with the submission of a tax good standing certificate. Corporates and Small Businesses alike, is not able to trade without the tax good standing certificate as most government and large corporate tender conditions includes a tax good standing certificates.
Said good standing certificates have recently lead to court battles in SA tax courts as SARS now has the ability to withdraw a tax good standing or tax clearance certificate.
Taking note of the above forms, the listed dates and taking care to file other related forms, such as UIF (to SARS) and workmen’s compensation fund to its Commissioner, is now part of the daily challenge doing business in SA.
Caveat: Very small business are exempt from provisional tax, VAT but not PAYE.