All companies, CC’s and trusts are by default deemed provisional taxpayers. 

Individuals with business, rental or investment income > R30 000 p.a. are also deemed provisional taxpayers by default. 

Not adhering to the requirements of provisional tax may lead to significant penalties.

If you only have salary income during a specific tax year, even if you previously qualified as a provisional taxpayer, you are still required to file a provisional return, until your annual return reflects that you are no longer earning non-PAYE income. 

 

SARS was in the past few years prone to withholding refunds, but have improved significantly.

The main provisions that allow SARS to legally withhold a refund, is their requirement to verify the information on a specific return – if there is a mismatch between the return and their previously received third party data, the SARS system flags a return for verification.

Once the verification process is initiated, the taxpayer has 21 working days to submit supporting documents as proof of the figures submitted on their return, after which SARS may ask for further information or conclude the verification – either on the substantiated figures or 3rd party figures.

From our experience, if the verification data is submitted shortly after they request is received, the process is concluded and refund paid out within 2 weeks.

If however there are large inconsistencies between SARS’s data and the return, the verification may be escalated to an audit, which could last up to 60 working days (3 months effectively).

Verification requests should be finalised within 21 working days from when the requested supporting documents are submitted to SARS … after which the SARS Service Monitoring Office (‘ SSMO’) can be approached in order to bring speedy closure to the case.

Audits should be concluded within 60 working days, after which the SSMO comes into play.

SARS verification and audit staff have rules that bind them to these deadlines, if they overstep and are reported via the SSMO, the relevant staff member receives a financial penalty … we think that is really fair!

Ideally you will need your most recent municipal invoice / account statement, but since not every taxpayer owns the property they live in, here is a list of documents that will serve as acceptable proof of residence:

The document must clearly show the taxpayers name (either initials and surname or first names(s) and surname) and the physical address.

 Document descriptionValidity period
1GENERAL ACCOUNTS: 
1.1Utility account i.e. rates and taxes, water or electricity account<3 months old
1.2Educational Institution account<3 months old
1.3Co-op statement (for farmers)<3 months old
1.4Medical aid statement<3 months old
1.5Mortgage statement from mortgage lender<6 months old
1.6Telephone account (All networks)<3 months old
1.7e-Toll account<3 months old
1.8SABC television licence<1 year old
1.9Retail accounts (e.g. Woolworths, Edgars, etc.)<3 months old
2GOVERNMENT ISSUED DOCUMENT: 
2.1Motor vehicle licence documents<1 year old
2.2Court order<3 months old
2.3Subpoena<3 months old
2.4Traffic fine<3 months old
2.5Documentation relating to UIF or pension pay-out<3 months old
3INSURANCE AND INVESTMENT DOCUMENT: 
3.1Life assurance document<1 year old
3.2Short-term insurance document< year old
3.3Health insurance document<1 year old
3.4Funeral policy document<1 year old
3.5Investment statement from share, portfolio or unit trust<1 year old
4LEASE/FRANCHISE AGREEMENT: 
4.1Current and valid agreement 

Below is the list of requirements according to the SARS website – please see our blog article for a more in-depth list of required information and documentation. 

  • IRP5: This is the employees’ tax certificate your employer issues to you. 
  • IT3(b): Certificates you received for local interest income earned (banks and investment managers).
  • IT3(c): Certificates reflecting capital gains, normally issued by your investment managers). 
  • Any other documentation relating to income received or accrued, such as remuneration that has not been reported to SARS by your employer, or business or investment income, etc.
  • Details of medical expenses paid and medical scheme contributions made.
  • IT3(s): Certificates for tax free investment contribution and earnings.
  • RA: The relevant certificates reflecting your retirement annuity fund contributions made.
  • A logbook and other documents in support of business travel expenses (if the travel allowance is part of your remuneration or if you have the right of use of a company car taxable benefit).
  • Any other documentation relating to the allowable deductions you wish to claim.
 
 

Our ethical code binds us to charge reasonable rates, which reflect the actual time and resources required to complete the service we render.

We are not allowed to charge a commission linked to the tax refund amount we are able to obtain, for obvious reasons.

We generally spend 4 years studying and 3 years as interns, after which we have to pass a entry exam before we receive our professional accreditation.

Every answer we give a client constitutes “professional advice” – and for that reason we have to charge clients when we provide them with answers, because we can be held liable in a court of law, based on that advice.

A few years ago SARS lost a significant amount of money when some Nigerian syndicates registered multiple entities for VAT and claimed refunds until verification requests or audits were lodged, after which our Nigerian friends vanished into thin air … 

Following that scandal, SARS increased their requirements for registration of all tax types, but placed a specific emphasis on the VAT registration process!

SARS verifies, with a high degree of detail, before any taxpayer is allowed to register for VAT:

  • Proof of address;
  • Banking details;
  • Sufficient turnover to qualify per the VAT Act;
  • The registering business entity’s directors / members / trustees / owners:
    • Identity,
    • Address and
    • Tax clearance of each … if any one of them is linked to another entity with a poor tax record, the registration is declined.
  • The existing information on the taxpayers’ profile; and
  • The authority of the applicant and the tax practitioner lodging the registration.

From experience we have learnt  that roughly 65% op applications require multiple SARS appointments to iron out the problems in the application’s paperwork, before a VAT number is finally issued.

It also doesn’t help that different SARS staff use different criteria, we are unfortunately not allowed to record our visits, which would have put more pressure on the SARS staff!!

To get to the point, it can take anywhere between 5 days and 2 months to obtain a VAT registration number for a new registrant.

Relevant SARS page