Tips for Employees to Remain Tax Compliant
24 August 2016
By Keelen Snyders, Tax Trainee at BDO South Africa
The 2016 income tax filing season for individuals opened on 1 July 2016 and will close in November 2016. Employees are advised to complete and submit income tax returns accurately and timeously to avoid penalties and interest arising from late submission. Filing income tax returns timeously also ensures that there is sufficient time to make corrections if required. However, if too many corrections are made an income tax audit is likely to result.
Employees whose earnings consist solely of “remuneration” as defined in the Fourth Schedule to the Income Tax Act from one single source are not required to submit an income tax return for the 2016 year of assessment (1 March 2015 – 29 February 2016) provided that:
- The remuneration did not exceed R350 000 during the period;
- The remuneration did not include taxable allowances or advances; and
- PAYE was withheld on the remuneration.
Taxpayers should submit all documents required by SARS to support their income tax return as this enables the smooth and accurate processing of income tax assessments. The following documents required by SARS are especially important:
- IRP5 tax certificates provided by employers to employees;
- Documents relating to non-remuneration income received or accrued, such as interest or dividends (IT3’s);
- Details of medical expenses and contributions to medical aid schemes;
- Certificates reflecting retirement annuity fund contributions made; and
- Logbooks and other relevant documents that support expenses relating to business motor vehicle travel.
Supporting documents that are required to be submitted with an income tax return should be retained for a period of five years after submission of the return. IRP5 tax certificates issued by employers should be checked by employees for accuracy prior to submission. If an employee does not agree with the IRP5 tax certificate, the employer should be requested to make corrections. Employees can choose to submit their income tax returns manually or via SARS e-filing. The due date for filing an income tax return manually at a SARS branch is 23 September 2016. If e-filed the due date for non-provisional taxpayers is 25 November 2016 and for provisional taxpayers who e-files the due date is 31 January 2017. If an income tax return is submitted manually, proof of receipt of the documents should be obtained and stamped by SARS. To speed up the assessment process and make use of the system-generated checks and validations, it is advisable to complete and submit income tax returns via e-filing. Tax practitioners can assist taxpayers to complete and file an income tax returns and assist with deductions and allowances that are available. Irrespective of who files the income tax
return, the taxpayer remains responsible for the accuracy thereof. Employees may refer to the SARS website (www.sars.gov.za) for further guidance on how to prepare and submit income tax returns.
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