The ‘Big Three’ Tax Worries (Part 2): Shares
In the second part of this series, we focus on shares. If claiming against our car allowances is the number one thing that keeps us awake at night as taxpayers, then the fear of SARS lying in wait to lay their grubby paws on the slightest gain that we make on our share investments must […]
How SARS Holds Individuals Accountable with Lifestyle Audits
When it comes to tracking down tax-dodgers, SARS has the tools, the people, and the will. Tax evasion and illicit financial flows are two areas that have long undermined economic growth in South Africa and public trust in governance. To counter these challenges, SARS has increasingly leaned on a controversial but effective tool—the lifestyle audit. […]
Understanding Residency in Terms of Tax
When earning an income in South Africa, you are probably paying tax. The Income Tax Act 58 of 1962 (“the Act”) describes gross income as: “(i) in the case of any resident, the total amount, in cash or otherwise, received by or accrued to or in favour of such resident; or (ii) in the case […]
Declaring Too Much Income to SARS?
It sounds crazy, but it happens more often than one would think… Many a taxpayer has experienced the wrath of SARS when failing to declare all of their income. The penalties for non-declaration of income are severe—up to 200% of the tax evaded as a consequence of not declaring an amount that is taxable. But […]
What’s In a Name?
The differences between an allowance, an advance, and a reimbursement are critical when it comes to tax. What’s the difference between an allowance, an advance, and a reimbursement? To many people, these are different terms for the same thing, but to SARS, the category that a payment falls into is critical when it comes to […]
Understanding Your Rights as a Taxpayer: Tax Assessments and the Promotion of Administrative Justice Act (PAJA)
We all pay taxes in one way or another, but as a taxpayer, it is important to understand your rights when dealing with tax authorities, the laws applicable, and whether your constitutional rights might be affected. One of the most common taxes paid is personal income tax. A critical aspect thereof is tax assessments, which […]
Claiming Foreign Tax Credits
Back in the day when I was still running my tax practice full-time, I was called upon by a client to assist with the tax and accounting treatment of taxes withheld by a foreign country from income earned in that country—in this particular case, Botswana. The client’s query centred on the following two issues: Claiming […]
Mastering Record Keeping: How to Meet SARS’s Electronic Documentation Standards
Too often, taxpayers seem to forget that the most important aspect of dealing with SARS is to ensure that they can discharge their burden of proof. As a taxpayer, it is on you to provide SARS with the relevant material that, on a balance of probabilities, supports your position. Taxpayers are required to retain relevant […]
Non-dependent medical expenses
Can you claim medical expenses for someone not a member of your medical scheme? You can, but there are many boxes to tick. Medical scheme membership is normally offered to individuals and their immediate dependents, who would usually be their spouses and children under 18 (unless they are in full-time education, in which case they […]
The new SARS solar energy tax credit
The tax credit for individuals installing solar panels is here, for a limited time only. The proposed new law regarding the tax credit available to individuals who install solar panels has been announced. The system will be introduced in the form of a tax credit, as opposed to a tax deduction. This is good news, […]