Recent college graduates, first job employees and, new business owners all have one thing in common: Tax. With this year’s tax filing season drawing to a close, we’ve compiled a list of need-to-know information for those new to the tax-paying scene, or in need of a refresher course.
What is a tax return?
A tax return is a form you need to file with SARS which allows them to work out how much tax you are liable for based on your declared income. Tax-deductible expenses are also declared during the assessment and may even result in a refund.
Should you file taxes?
South African residents who earn an income above the tax threshold need to file a tax return. This applies when you had more than one employer or income source, or if you received a taxable allowance or advances from their employer.
You will also need to file a tax return if any of the following applies to you as an individual South African tax resident:
- You operate a business with the goal of making a profit in or outside of South Africa.
- You had capital gains or losses worth more than R40 000 for the tax year.
- You owned foreign currency or foreign assets and the total value was more than R250 000 at any time during the tax year.
- You earned a foreign salary outside of South Africa.
- You earned income or capital gains outside of South Africa that are attributed to you.
- SARS sent you a tax return and requested that you complete it.
You can click here to find out if you need to file a tax return.
How does an auto-assessment work?
To make taxation easier, SARS auto-assess a significant number of taxpayers based on data provided by employers, financial institutions, medical schemes et cetera.
If you are selected to be auto-assessed, you will receive an SMS with a link to eFiling or to the SARS MobiApp to view your return. If you accept the auto-assessment results, you do not have to complete a tax return yourself as SARS would have done that automatically. Refunds will also be done automatically if SARS has your correct banking details
Note that if you owe SARS money, you can make your payment as per the normal process on eFiling, via EFT or using the SARS MobiApp.
As individual tax filing for most taxpayers closes on 23 November 2021, we urge you to contact us if you have any more questions around tax.