WORDS Rene Klein, tax practitioner at Sanlam Private Wealth
Depending on your individual financial situation, the process of completing your annual tax return may be a complicated one.
It’s advisable to obtain professional assistance to ensure you’ve covered all the bases and prepared your return correctly. We’ve put together a handy checklist of questions to discuss with your tax practitioner before you submit your 2022 return.
By when should I file my tax return?
The tax return filing season is relatively short this year. For non-provisional taxpayers, it opened on 1 July 2022 and effectively ends on 24 October 2022. Provisional taxpayers may file returns until 23 January 2023.
Why is it important to update my details with SARS?
If the South African Revenue Service (SARS) doesn’t have your latest contact, address or banking details – either as an individual or as the registered representative of a trust – you may not be able to access your e-filing profile or receive refund payments which may be due to you.
What are the tax implications of donations, as well as medical expenses?
Many taxpayers are not familiar with the process of donating to Section 18A-approved organisations, which could potentially entitle you to an income tax deduction of up to 10% of your taxable income in a given assessment year.
Your tax practitioner may also request evidence of medical expenses paid out of pocket during the year of assessment, in addition to your monthly medical aid contributions.
What about taxes such as estate duty?
It’s important to draw up a comprehensive estate plan with a fiduciary specialist – encompassing both your local and offshore assets and taking into account taxes and duties to be paid both in South Africa and elsewhere. This will ensure that the proceeds of your estate are distributed to your loved ones in the most cost-effective way possible. Read more about estate planning and securing your legacy here.
What happens if I am emigrating and wish to cease tax residency with SARS?
It is crucial to inform SARS of your decision in writing. The date of cessation will also have to be included on your latest tax return submission, and all e-filing details updated, since the e-filing profile is the mechanism used to apply for your tax emigration clearance.
What are the possible consequences of non-compliance by taxpayers?
SARS can impose severe penalties for non-compliance, which can include non-submission or late submission of income tax returns, submission of incomplete returns, or non-disclosure of income. SARS can impose penalties of up to 200% for understatement of income from both local and foreign sources.
Tax compliance plays a major role should you wish to apply for a foreign investment allowance or a tax clearance certificate.
For an annual fee, our tax compliance team will provide an end-to-end, all-inclusive tax administration and compliance service for private wealth clients, deceased estates and trusts. Please contact Rene Klein on +27 (0)11 778 6662 or at renek@privatewealth.sanlam.co.za.
