You need to file a tax return if…

Being in the midst of the 2021/22 tax year has led many individuals to wonder whether or not they are required to submit an income tax return. For better clarification and guidance, SARS (South African Revenue Services) has released information detailing who must submit these returns.
income tax
Who is not required to submit a tax return?

A notice released by SARS concisely details circumstances in which individuals are not required to submit a tax return. Taxpayers will not be required to submit a return if their gross income consists of the following:

  • Remuneration that does not exceed R500 000 for the tax year, where PAYE has been correctly deducted. This is most likely suitable for individuals with only one form of income.
  • Interest gained from a South African source that does not exceed R23 800 if you are below the age of 65, and R34 500 for those older than 65.
  • Dividends that were gained when the individual was a non-resident within the 2021 assessment period.
  • Any monetary value incurred from tax-free investments.

It is important to note that these exemptions may not apply to taxpayers who have received a travel, subsistence or office bearer allowance from their employer, unless these allowances have aligned with rates prescribed by SARS.

The exemption from tax return submissions is also not applicable to remuneration that includes fringe benefits or for services rendered outside of the country.

Who is required to submit a tax return?

Individuals who do not fit the requirements outlined for tax return exemptions should assume that they must do so. These individuals can be classified as follows:

  • Resident and non-resident taxpayers who have carried on a trade outside of their capacity as an employee.
  • Taxpayers who have had a total of R40 000 or more in capital gains or losses for the 2021 tax assessment.
  • Non-resident taxpayers with a capital gain or loss that is subject to capital gains tax.
  • Resident taxpayers who hold funds or assets in foreign currency outside of South Africa that exceeds R250 000 during the year of assessment.
  • Resident taxpayers that receive an income from capital gains in a foreign currency or from foreign assets.
  • Resident taxpayers who hold at least 10% of participation rights within a controlled foreign company.
  • Non-resident taxpayers with a gross income including interest from a South African source that is not exempt under section 10(1)(h) of the Income Tax Act.
  • When a taxpayer’s gross income does not meet the exemption requirements and exceeds the tax threshold. The need to submit a return does not apply in this situation if the taxpayer is eligible for an automatic assessment. However, this is also subject to the acceptance of a complete and correct automated assessment.

Individuals who are required to submit a tax return should do so via eFiling on or before the 23rd of November 2021 unless you are a provisional taxpayer. Provisional taxpayers are expected to submit on or before the 31st of January 2022.

If you require assistance or clarity in the return process, feel free to contact the tax specialists at MMS Cloud Accounting to ensure that your income tax return is done efficiently and accurately to avoid non-compliance.
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