The SA Revenue Service (Sars) says many taxpayers have incorrectly interpreted the criteria for taxpayers who may not be required to file an income tax return. On Sunday, it issued this clarification:
1. What tax filing season is - and isn’t - about. Tax season is about filing an income tax return to ensure that an individual taxpayer’s tax affairs are in order.
Most salaried taxpayers have already paid tax through Pay As You Earn (PAYE), which is deducted from their salary by an employer, which pays the deduction over to Sars.
If these taxpayers are required to file a return - such as those who earn above R500 000 a year - they are generally required to confirm what Sars already knows about their income and financial status.
Taxpayers who earn below the filing threshold may have to file a return, because they need to declare other sources of income, such as rental income or business income, or to claim tax-related deductions such as medical expenses not covered by their medical scheme, retirement annuity contributions and travel expenses.
Sars reconciles what was paid over by the employer with what the taxpayer declares on their income tax return.
After this reconciliation, the assessment or tax calculation may result in the taxpayer having to pay additional tax to Sars, or be due a refund, or neither.
Tax season is not about refunds and filing a tax return does not guarantee that you will receive a refund.
2.The threshold of R500 000 and the criteria for those not required to file. The threshold refers to those who are not required to file a tax return; it does not refer to who do not have to pay tax.
The filing threshold is not the same as the tax threshold to pay tax or have PAYE deducted. You have already paid tax through the PAYE deducted from your salary if you earn more than R79 000 a year for those under 65 years for the 2020 tax year.
The threshold of R500 000 is not the only condition. All the following conditions must also apply before you can cross yourself out for filing a tax return:
* Your remuneration is paid from one employer or one source (you must file if you changed jobs during the tax year, or have more than one employer or income source).
* You have no car or travel allowance, or company car fringe benefit, which is considered additional income.
* You do not have any other form of income, such as interest, rental income or extra money from a side business.
* PAYE has been deducted or withheld.
3. Sars tax calculations. Sars will perform a tax calculation for those taxpayers not required to file as though they did file. This will provide the taxpayer with written confirmation that they are in good standing with Sars.
4. Tax filing dates.
* eFiling opens on July 1 and closes on December 4.
* Branch filing opens on August 1 and closes on October 31.
* Provisional taxpayers have until January 31, 2020 to file via eFiling.