Industry updates | July 2022
Please take note of the following industry updates that may be relevant to you and your business.
COMPLIANCE AND ADMINISTRATION
Due dates for reporting and payments- July 2022:
TAX ADMINISTRATION
1. 2022 Tax Filing Season- DUE DATES:
2. Tax directive issues with SARS:
The submission of the EMP501s in instances where a directive was issued on eFiling and the directive is validated, there are examples where – even though the date on IRP5 is the same as the date of the letter of directive – an error message is given which states “Employment Taxes failed validation file: Invalid directive date issued”.
SARS has advised that this error can be ignored. It should be noted that this impacts a very limited number of submissions.
3. ‘Old’ Notices of Assessment being reissued – glitch
In the past week, SAIT has received several queries regarding the issuance of ‘old’ notices of assessments on eFiling.
In respect of the cases investigated, it was determined that the assessments issued by SARS, mostly additional assessments, were in fact previously issued in February and March 2022, and no new adjustments were made to the assessments issued in May 2022.
It is advisable that, where members have received these ‘old’ assessments, they ought to check whether any new adjustments have been made. If not, the assessments may be ignored.
4. Determination of Medical tax Credits
The guide issued by SARS provides general guidelines regarding the medical scheme fees tax credit (MTC) and additional medical expenses tax credit (AMTC) for income tax purposes. The guide includes the amendments effected by section 3 of the Rates and Monetary Amounts and Amendment of Revenue Laws Act No. 19 of 2021, promulgated on 19 January 2022, and applies from years of assessment commencing on or after 1 March 2021.
Only contributions that were paid to a registered medical scheme, and that can be proven to have been paid by a taxpayer, either directly or indirectly, will qualify in determining the MTC under section 6A of the Income Tax Act, No. 58 of 1962 (the Act).
The MTC is set at a fixed amount per month. Taxpayers can also claim an AMTC under section 6B, to the extent that the qualifying medical expenses can be considered in the calculation of the AMTC.
Expenditure prescribed by the Commissioner, and which is necessarily incurred and paid for by the taxpayer in consequence of a disability, also qualifies for an AMTC. These expenses are set out in the List of Qualifying Physical Impairment or Disability Expenditure which was revised on 29 October 2021 and published with effect from 1 March 2020.
Taxpayers are also permitted to claim qualifying medical expenses for a physical impairment in calculating the AMTC. Qualifying medical expenses can only be claimed in the year of assessment during which they are actually paid.
- Domonique Ramos | 04 July 2022