July 1, 2024 marks the commencement of the 2024 tax season as well as the date that that the South African Revenue Services (Sars) starts with tax auto-assessments.
Taxpayers need to take note of the following important dates:
- Auto-assessments: July 1-14, 2024;
- Individual Taxpayers (Non-Provisional): July 15, 2024 to October 21, 2024;
- Provisional Taxpayers: July 15, 2024 to January 20, 2025; and
- Trusts: September 19, 2024 to January 20, 2025.
What is tax auto-assessments?
According to Tax Consulting SA, tax auto-assessment is when Sars receives data from third-party providers such as employers, medical schemes and retirement annuity funds. This information from the third-party providers is then pre-populated on the taxpayer’s tax return.
However, information like additional income will not be included.
Then Sars will issue the taxpayer with an auto estimated assessment based on the data.
Kabelo Moutloatse, Tax Accounting Specialist at Latita Africa sharess three things you need to know about the tax auto-assessment process:
Notifications
Sars will inform taxpayers via an SMS or email that they have been selected for the tax auto-assessment. The notifications will be sent from July, 1-14 2024 while the deadline for auto-assessed taxpayers is October 21, 2024.
If a taxpayer’s details have not been updated or the notification from Sars is sent to an unattended inbox, then the taxpayer will not have the opportunity to be alerted about their auto-assessment beforehand so they can verify the accuracy of the assessment.
Due to this reason, taxpayers are advised to check their e-Filing profiles during the tax filing season.
Take a moment to review or update your details on SARS eFiling. From your address, bank details, email address to security details. Ensure everything is meticulous and stay ready to receive all communication from SARS. https://t.co/Kj2W3lEGww pic.twitter.com/iCeyrip34h
Accuracy
Taxpayers need to remember that they will be assessed by Sars based on the information that has been made available to the taxman.
Auto-assessments may not take into consideration all potential deductions and credits available to the taxpayer.
There may also have been events during the tax year that were not captured correctly by the third-party data providers such as the employer, medical aid scheme or financial institution.
For example, resident employees working outside South Africa are eligible for a R1.25 million exemption on their foreign income. However, if this is not reflected on their tax certificate, Sars will tax them on their full income.
If you earned other income that has not been taken into account in the auto-assessment and take no action, then the resulting tax shortfall may not only result in additional tax, penalties and interest imposed by Sars but also criminal implications for the taxpayer.
Corrections
If any taxpayer disagrees with SARS’ assessment, they must file a tax return correcting the auto-assessment. Taxpayers will have until October 21, 2024 to correct the auto-assessment.
According to Sars website, if an auto-assessment was issued after October 21, 2024, then the taxpayer will need to file a correction within 40 business days after the notice of assessment.
If a correction is filed after that date, the taxpayer could pay penalties and interest.
Taxpayers need to provide Sars with a valid reason for the delay in submission. The tax agency has the discretion to accept or reject the late submission based on the reasons provided.
If the corrected return is not accepted by Sars, the taxpayer can object to the assessment. If the objection is denied, the taxpayer has the right to appeal the decision.
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