’Tis the season to be eFiling
Sars announces dates and changes for returns, including tax on crypto-currency, which is deemed an asset
Tax season and the chore of filing your return may elicit groans but Sars has introduced new measures to make the return process and eFiling easier for you this year.
The 2018/2019 tax season opens on July 1 for those who will file an electronic tax return.
Marc Sevitz, a director at TaxTim, says Sars has changed the layout and look of the tax return, but for regular users of the internet, these changes should be easy to navigate. In the past, some eFiling users struggled to upload supporting documents but these issues should now be resolved.
At a media briefing on June 4 about the opening of tax filing season, Sars commissioner Edward Kieswetter also said Sars has improved online filing to make it simpler and more convenient to file an income tax return. eFiling has been enhanced with better browser compatibility, he said. It is easier to navigate and file a return, submit supporting documents and to make payments.
This year, Sars will be proactive and issue customised notices indicating specific documents required in the event that you are selected for a verification or audit. In the past, you were simply advised to provide supporting documentation without any details of what Sars was looking for.
Sevitz says that in addition to the revamped form there are four amendments that should provide clarity on certain issues affecting taxpayers.
Until now, taxpayers have been confused about whether they should be declaring and paying tax on income and profits from crypto-currencies, Sevitz says. However, there is a nudge from Sars in the new form. In the section where you are asked whether you are a director of a company or if you own your own business, you are required to provide a list of assets and liabilities and Sars specifically mentions crypto-currencies as an example of an asset.
Sevitz explains that, like shares, the profits from buying and selling crypto-currencies are taxable. Whether you pay capital gains tax or income tax on them will depend on whether you occasionally buy and sell or whether you are actively trading crypto-currencies on a regular basis. An occasional profit will be taxed as a capital gain while regular trading will be regarded as a side business and you will pay income tax on the money you earn from the trades.
Either way, Sevitz says, Sars now expects you to declare your earnings from crypto-currencies in the new tax return.
Di Seccombe, head of taxation at Mazars, recently said that regardless of how long you hold a crypto-currency, Sars will consider you a trader in crypto-currencies.
Interest paid by Sars
If you are a provisional taxpayer and made provisional tax payments that are more than the actual tax due, Sars pays you interest on the amount by which you over-paid. This year, the form requires that you fill in the amount of interest Sars paid to you.
A big change introduced into the new tax return is declaring foreign withholding taxes. This will affect you only if are a South African and earn an income in SA from a foreign business, in which case that foreign company is required to deduct and withhold taxes on your behalf.
Sevitz says that previously, taxpayers in this situation would struggle to make Sars aware of taxes withheld in other countries that would result in a lot of additional admin for the taxpayer. The change makes declaring these taxes a lot easier and will reduce any worry about paying double taxes.
Medical scheme subsidies to retired taxpayers
Some South Africans continue to have their medical scheme contributions paid by their former employers after they retire. On the old tax form, there was no provision to declare this which often resulted in an inaccurate calculation of tax and led to taxpayers being audited by Sars, according to Sevitz.
This year, Sars has added a new line to the form where the value of medical scheme contributions paid by a former employer can be given.
Taxpayers should be able to find their way around the new form with relative ease, Sevitz says. If the screen seems to have frozen, use the scrollbar at the side of your computer screen to navigate to the top of the page, as that is where any warning messages will be displayed.
Important dates for filing tax returns for the 2018/2019 tax year:
- Branch filing: August 1 to October 31 2019 for taxpayers registered for provisional tax, as well as those who are not registered for provisional tax.
- eFiling and cellphone filing on the Sars MobiApp: July 1 to December 4 2019 for taxpayers who are not registered for provisional tax.
- eFiling by provisional taxpayers: July 1 to January 31 2020.