FREQUENTLY ASKED QUESTION

What is a income tax year of assessment ?

The year of assessment for taxpayers covers a period of 12 months. For individuals and trusts, the commencement date of the year of assessment starts on 1 March and ends on the 28/29 February each year. For Companies and Close Corporations the year of assessment is the applicable financial year.

Income tax returns are available annually after the end of each year of assessment to registered taxpayers, and must be completed and submitted to SARS each year.

The assessment by SARS

From the information furnished in the income tax return, SARS will issue an assessment showing either tax due or refundable, if applicable.

If you earn a taxable income which is above the tax threshold, you must register as a taxpayer with SARS.

The Minister announced “as from September this year SARS will require all those receiving any form of employment income – including those below the tax threshold – to be registered with SARS to help reduce the scope for non-compliance.
Who needs to submit a completed and signed income tax return to SARS?
Where taxpayers receive remuneration less than R120 000, taxpayers may elect not to submit an income tax return, provided the following criteria are met:

  • Remuneration is from a single employer;
  • Remuneration is for a full year of assessment (1 March – 28/29 February); and
  • No allowance was paid, from which PAYE was not deducted in full with regards to travel allowance.

You are liable to pay income tax if you earn more than:

For the 2023 year of assessment (1 March 2022 – 28 February 2023)

  • R91 250 if you are younger than 65 years.
  • If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) is R141 250.
  • For taxpayers aged 75 years and older, this threshold is R157 900.

For the 2022 year of assessment (1 March 2021 – 28 February 2022)

  • R87 300 if you are younger than 65 years.
  • If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) is R135 150.
  • For taxpayers aged 75 years and older, this threshold is R151 100.

For the 2021 year of assessment (1 March 2020 – 28 February 2021)

  • R83 100 if you are younger than 65 years.
  • If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) is R128 650.
  • For taxpayers aged 75 years and older, this threshold is R143 850

The penalties for not submitting a tax return are set out in Chapter 15 of the Tax Administration Act. They differ according to behaviour of the taxpayer

Do I need to submit an Income tax return for the 2022 tax year ?

If you answer yes to any of the following questions you will be liable to submit an income tax return for the period 1 March 2021 to 28 February 2022.

  • Did you conduct any trade in South Africa?
  • If you are a South African tax resident, did you conduct any trade or employment outside South Africa?
  • Did you receive an allowance such as a travel, subsistence or office bearer allowance?  Check your IRP5/IT3(a) if unsure.
  • Did you hold any funds in foreign currency or assets outside South Africa that have a combined total value of more than R250 000 at any stage during the tax year?
  • Did you have Capital Gains or Capital Losses exceeding R40 000?
  • Was any income or a Capital Gain from funds in foreign currency or assets outside the Republic attributed to you?
  • Do you hold any participation rights in a Controlled Foreign Company?
  • Did you receive an Income Tax Return or were you asked to submit an Income Tax Return for the tax year

Filing season 2022 timelines

  • 1 July to 24 October 2022

Any person who receives income (or to whom income accrues) other than remuneration, is a provisional taxpayer.  Most salary earners are therefore not-provisional taxpayers, if they have no other sources of income. It is important to note that receiving exempt income, as follows, does not make you a provisional taxpayer:

  • If you receive interest of less than R23 800 if you are under 65; or
  • If you receive interest of less than R34 500 if you are 65 and older or;
  • You receive exempt amount from a tax free savings account.

A provisional taxpayer is defined in paragraph 1 of the Fourth Schedule of the Income Tax Act, No.58 of 1962, as any –

  • natural person who derives income, other than remuneration or an allowance or advance as mentioned in section 8(1) or who derives remuneration from an employer who is not registered for employees’ tax (for example, an embassy is not obligated to register as an employer for employees’ tax purposes)
  • company; or
  • person who is told by the Commissioner that he or she is a provisional taxpayer.

Excluded from being a provisional taxpayer as defined are any –

      • approved public benefit organisations or recreational clubs that have been approved by the Commissioner in terms of s30 or s30A;
      • body corporates, share block companies or certain associations of persons that are exempt from tax;
      • Non-resident owner or charterer of ships or aircraft;
      • Any natural person who does not earn any income from carrying on any business – provided that person’s taxable income will not be more than the tax threshold (for 2023 tax year: for taxpayers below age of 65 –
        R91 250; age 65 to below 75 – R141 250 and age 75 and over – R157 900); or the taxable income of that person (earned from interest, foreign dividends, rental from letting of fixed property and remuneration from unregistered employer) will not be more than R30 000;
      • A small business funding entity;
      • a deceased estate

  • An individual is not a provisional taxpayer if that individual does not carry on any business and the individual’s taxable income –
    • will not exceed the tax threshold for the tax year;
    • from interest, dividends, foreign dividends, rental from the letting of fixed property and remuneration from an unregistered employer will be R30 000 or less for the tax year.
  • The following persons are also not provisional taxpayers:
    • Deceased estates
    • Approved public benefit organisations
    • Approved recreational clubs
    • Body corporates and share block companies
    • Small business funding entity
    • Any entity as defined in section 30B that has been approved by the Commissioner in terms of section 30B (2)

There is no longer a registration or deregistration process to be a provision taxpayer.

The onus is on the taxpayer to determine of he or she is liable for provisional tax, and to request and submit an IRP6 return via eFiling.

  • The first provisional tax payment must be made within six months of the start of the year of assessment. For years of assessment starting March, this will be 31 August, if it is a business day, or the last business day before that date if it falls on a Saturday, Sunday or public holiday.
  • The second payment must be made no later than the last working day of the year of assessment. This will be last business day of February.
  • The third payment is voluntary and may be made:
    • for companies with a year end of the last day of February, and any other person (other than a company), the last business day of September;
    • in any other case, within six months of the end of the year of assessment

A capital gain arises when you dispose of an asset on or after 1 October 2001 for proceeds that exceed its base cost. The relevant legislation is contained in the Eighth Schedule to the Income Tax Act 58 of 1962. Capital gains are taxed at a lower effective tax rate than ordinary income

Capital gains tax (CGT) is not a separate tax but forms part of income tax. A capital gain arises when you dispose of an asset on or after 1 October 2001 for proceeds that exceed its base cost.

The relevant legislation is contained in the Eighth Schedule to the Income Tax Act 58 of 1962.

Capital gains are taxed at a lower effective tax rate than ordinary income. Pre- 1 October 2001 CGT capital gains and losses are not taken into account. Not all assets attract CGT and certain capital gains and losses are disregarded.

A withholding tax applies to non-resident sellers of immovable property (section 35A). The amount withheld by the buyer serves as an advance payment towards the seller’s final income tax liability

CGT applies to individuals, trusts and companies.

A resident, as defined in the Income Tax Act 58 of 1962, is liable for CGT on assets located both in and outside South Africa.

A non-resident is liable to CGT only on immovable property in South Africa or assets of a “permanent establishment” (branch) in South Africa. Certain indirect interests in immovable property such as shares in a property company are deemed to be immovable property.

Some persons such as retirement funds are fully exempt from CGT. Public benefit organisations may be fully or partially exempt