Industry updates | October 2023

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- October 2023:

TAX ADMINISTRATION

 1.      Deadline for submission of 2023 income tax return for non-provisional individual taxpayers:

Tax season for submission of the 2023 income tax return for non-provisional individual taxpayers is closing on the 23rd of October. Please ensure that your returns are submitted on time. Late submissions will result in penalties being levied on your SARS account.

2.     Official inclusion of IT3(t) & IT3(d) to the IT3 Third-Party Data reporting:

The third-party data reporting process requires the representative taxpayers or tax practitioners to report the required ITR12T information via the IT3-01 and IT3-02 forms.

The representative taxpayers or tax practitioners may view and correct the data or certificates that were submitted to SARS on request. SARS requests that Section 18A-approved entities, such as Government Institutions, Public Benefit Organisations (PBO), or United Nations Agencies, who received donations and issued tax deductible receipts, report those receipts to SARS. The relevant documents pertaining to these processes have been updated. Additionally, a new guide on how to manage the submission of IT3 third-party data has been developed.

3.     Home office expense –Deductibility of the interest on a bond:

SARS has reviewed the deductibility of interest on a bond as part of home office expenses for the 2023 year of assessment going forward.

The interest on a mortgage bond was previously allowed as a tax-deductible expense as part of the home office expenses. However, since the publication on 4 March 2022 of the updated Interpretation Note 28, dealing with deductions of home office expenses incurred by persons in employment or holding an office, it was clarified that with effect from the 2023 tax year, this expense is no longer deductible.

Therefore, if you are in employment or hold an office and you meet the requirements to claim home office expenses for the 2023 tax year, you are no longer allowed to claim interest on the mortgage bond.

4.     Outsourcing of overdue debt:

Beginning October 2023, SARS will outsource overdue debt that is older than five years to external third-party debt collectors, who will assist with overdue accounts where no active payment or attempts to make payment arrangements have been made.

The intervention will apply to taxpayers and traders who have been repeatedly contacted, been sent letters of demand outlining options for debt resolution, and still failed to settle their accounts or secure payment terms.

SARS will notify the affected taxpayers of its intention to hand them over while affording them the opportunity to regularise their tax affairs. The SARS debt management team will assign dedicated consultants to assist affected taxpayers with handover-related questions.

5.     SARS introduces document encryption to protect taxpayer confidentiality.

SARS is commencing the journey to protect documents with passwords so that only the intended recipient can access the information. The first document that will have this encryption applied is the Notice of Registration (IT150). Once a taxpayer receives this document from SARS, they will be required to use their ID/ Passport/ Permit number to open their Notice of Registration.

-       Domonique Ramos | 02 October 2023