Top Ten Tax Myths Dispelled
27 September 2016
By: Keelen Snyders, Tax Trainee at BDO South Africa
You submit taxes every year, but how informed are you when it comes to tax? We dispel some of the most common tax myths.
- Employees who are subject to PAYE do not have to submit income tax returns
Employees whose gross income consists only of remuneration from a single source do not need to submit an income tax return for the 2016 tax year, provided that:
- The remuneration does not exceed R350 000 for the tax year;
- No allowance or advance is included in the remuneration; and
- PAYE has been withheld on the remuneration.
- I’m too young to pay taxes
In South Africa the legal employment age is 15 years old. Thus, if an employee is 15 or older and earns more than R75 000 per year, the employer must withhold PAYE from the employee’s salary.
- Money made over the internet is tax free
Money made from a trade conducted over the internet must be included in a South African resident’s gross income and is taxable as ordinary income, provided that the amount is not of a capital nature.
- Once I receive my refund I may no longer be subject to audit
SARS may trigger an audit at any time to investigate any concerns it may have.
- SARS is legally obliged to refund taxes overpaid without delay
SARS will only refund an amount to a taxpayer if its system has not detected any flag for an audit or if an audit has been satisfactorily completed.
- Restaurant tips don't count as taxable income
Restaurant tips paid to a waitron constitute amounts received for services rendered. As such, they are specifically included in gross income.
- If you use e-filing you end up going into a SARS branch in any event
If an individual wishes to change bank details or other personal details, SARS generally requires the information to be presented in person at a SARS branch. However, if there is no change of information or any other unusual circumstance, a taxpayer may file a tax return via e-filing and would generally not be required to visit a SARS branch.
- Same-sex couples who have married may continue to file using the “single” status.
In the case of “Minister of Home Affairs and Another v Fourie and Another” it was held that the exclusion of same-sex couples from the common law definition of marriage constituted unfair discrimination. The definition of “spouse” in the Income Tax Act includes same-sex partners if the union is intended to be permanent.
- Benefits granted otherwise than in cash are not taxable
Shopping vouchers and other non-cash awards granted by an employer constitute taxable benefits.
- You can claim pets as dependants
SARS recognises the following as dependants: (i) a spouse; (ii) a child and the child of a spouse (with certain conditions); (iii) any other family members for whom you are liable for family care and support; and (iv) any other person who is recognised as a dependant in terms of the rules of a medical scheme or fund. As a result, it is not possible to claim pets as dependants.
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