This past week SARS announced that if you earn less than a prescribed minimum of R500, 000 in a year from one employer, and fulfil a series of complicated criteria, you may not have to file a tax return in 2019. However, we would like to advise our clients otherwise, and encourage all taxpayers to submit their returns as there may still be a chance you can qualify for a tax refund…
Although individuals might earn less than R500,000 a year, you still need to take into account your retirement annuity fund contributions and allowances (received from an employer), as these usually result in additional deductions to be claimed upon, resulting in a possible tax refund.
According to SARS, the new threshold laws only apply to citizens if they meet the following set of criteria:
You must receive income from one employer only
You must have no other form of income, such as a car allowance, business income, taxable income or money made from renting
You must have no additional deductible allowances, such as medical expenses, travel expenses or retirement annuities
These criteria are especially important for someone who was not employed for part of the tax year to file a return. This is because employees are taxed on an annualised basis through Pay As You Earn (PAYE). In effect, the employee would have been taxed for 12 months of the year, and not as many months they actually worked, which means that more tax would have been paid to SARS than necessary and a refund would probably be due to them! Therefore we would like to reiterate that if you make medical aid contributions, retirement annuity contributions or earn any other forms of income like rental income, it would be in your interest to submit a tax return.
Taxpayers should exercise caution before deciding not to submit a return and when uncertain, it’s better to play it safe and and get guidance/assistance from a tax practitioner, especially where your circumstances are more complex. It is also important to note that these new criteria do not apply to expatriates working outside SA. As long as you are tax resident you must still file a tax return and claim a tax exemption!
So why let SARS keep your money if you are due a refund? Capta FS now has a dedicated in-house tax practitioner who is able to offer efficient and effective assistance in the calculation and filing of your income tax return, provisional income tax returns or any tax related issues. We are also able to assist clients who are South Africans working abroad, as well as foreign nationals rendering services in South Africa.
Tax filing season starts for all taxpayers in less than a month meaning you can start filing your returns from as early as July 1, 2019. For more information about the tax services we are able to offer or to speak to our in-house tax practitioner email Bronson@captafs.co.za or Don@captafs.co.za today!