New Tax Law
When you can go to jail for tax mistakes – 20 Jan 2021
- Proving negligence, where you had knowledge of the transgression but ignored to apply the knowledge.
- Intent, where you chose intentionally ignore application of the law.
- Provide clarity and certainty to taxpayers about their tax obligations.
- Make it easy to fulfil their tax obligations.
- If SARS detects non-compliance, for any reason, whether it is negligent or with intent, it will respond using all instruments in law.
- Offences that require wilfulness, where the heavier burden of proof falls on SARS.
- Offences in respect of which “negligence” will suffice to trigger potential criminal liability.
11 offences which could give rise to criminal liability, only if the taxpayer committed them with intent
- Submitting a false certificate or statement in relation to returns, records and reportable arrangements
- Issuing an erroneous, incomplete or false document
- Failure to reply to or answer truly and fully any questions put to the person by a SARS official
- Obstructing or hindering a SARS official in the discharge of duties.
- Refusal to give assistance during an audit or criminal investigation.
- Holding oneself out as a SARS official
- Dissipating assets or assisting another person to dissipate assets in order to impede the collection of tax.
- Using any amounts deducted by way of employees’ tax for purposes other than paying it to SARS
- Issuing documents purporting to be employees’ tax certificates if not an employer or authorised to issue
- Declaring that the price chargeable in respect of supplies is subject to VAT, where in fact no VAT is payable or charging VAT in excess of
- the VAT properly leviable
- Issuing more than one tax invoice, credit note or debit note in respect of a VAT supply
17 offences which could give rise to criminal liability, even if the taxpayer committed them without intent
- Failure to register for tax or to notify SARS of a change in registered particulars
- Failure to appoint a representative taxpayer or to notify SARS a change in representative taxpayer
- Failure to register as a tax practitioner if required to do so.
- Failure to submit a return or document to SARS or the failure to issue a document to a person as required under a tax Act
- Failure to retain records as required
- Failure to furnish information or documents requested, excluding information requested for revenue estimations.
- Failure to give evidence when required.
- Failure to comply with a SARS directive.
- Failure to disclose to SARS material facts required.
- Failure to comply with tax payments including third party payments.
- Failure to comply with withholding tax obligations when required.
- Failure to issue any employees’ tax certificates or to notify SARS of having ceased to be a registered employer.
- Failure by an employer to deliver to any employee or former employee any employees’ tax certificate or notify SARS of having ceased to be a registered employer
- Failure to submit provisional tax estimates.
- Failure to comply with the payment of VAT on imported services and otherwise. Failure to submit VAT returns and special records.
- Failure to include VAT in the advertised or quoted price or failure to separately indicate the VAT exclusive price and the VAT inclusive price.
- Failure to keep sufficient records as required.
New Tax Law
10 key changes taxpayers need to take note of
The President has given effect to the 2020 tax proposals by signing three tax Acts into law that will introduce several big new changes for South African taxpayers:
· The Rates and Monetary Amounts and Amendment of Revenue Laws Act No. 22 of 2020:
· The Taxation Laws Amendment Act No. 23 of 2020; and
· The Tax Administration Laws Amendment Act No. 24 of 2020.
Jean du Toit, Head of Tax Technical at Tax Consulting SA highlights 10 key changes taxpayers need to know:
1. Withdrawal of retirement funds upon emigration
From 1 March 2021, taxpayers will no longer be able to access their retirement benefits upon completion of the emigration process through the South African Reserve Bank, commonly referred to as “financial emigration”.
2. Anti-avoidance rules bolstered for trusts.
The anti-avoidance rules aimed at curbing tax-free transfers of wealth to trusts have been strengthened to prevent persisting loopholes.
3. Reimbursing employees for business travel expenses
Employees are not subject to tax on an amount paid by their employer as an advance or reimbursement in respect of meals and incidental costs where the employee is obliged to spend a night away from home for business purposes, provided it does not exceed the amount published in the Government Gazette.
4. Relief for expats confirmed
Due to the travel restrictions under the Covid-19 pandemic, the days requirement for the foreign employment exemption has been reduced from 183 days in aggregate to 117 days.
5. Employer provided bursaries
The Income Tax Act makes provision for the exemption of bona fide bursaries or scholarships granted by employers to employees or their relatives.
6. Tax treatment of doubtful debts
The doubtful debt allowance provision has been amended to bring parity between taxpayers that apply IFRS 9 and those who do not.
7. Roll-over amounts claimable under the ETI
The Employment Tax Incentive Act has been amended to encourage tax compliance.
8. Estimated assessments
The terms under which SARS may issue an assessment based on an estimate has been expanded.
9. SARS can withhold your refund if you are under criminal investigation
In terms of the Tax Administration Act, SARS is entitled to withhold refunds owed to taxpayers in certain circumstances.
10. Criminal sanctions for minor tax offences
Previously, a taxpayer would only be guilty of a criminal offence for non-compliance under the Tax Administration Act if they “wilfully” failed to comply with their tax obligations. With the new amendments, non-compliance will constitute a criminal offence where it is as a result of the taxpayer’s negligence. In other words, intent is no longer required; where you are non-compliant as a result of ignorance of your obligations, you may be found guilty of a criminal offence. These offences are subject to a fine or imprisonment of up to two years.
Click here to read the detail of the key changes. In September 2020, South African Revenue Service Commissioner Edward Kieswetter allayed fears that taxpayers will be imprisoned for minor mistakes on their tax returns. According to Kieswetter criminal prosecution is the last resort when it comes to tax non-compliance as SARS has a few other steps in place before resorting to court action. I suppose the proof will be in the pudding. Best advice: rather be safe than sorry.
Bookkeeping & Tips
Business owners have the option to subcontract their complete bookkeeping function to us, or to let us handle only certain areas of their books or to let us fine-tune the accounts/financial information they produce themselves. We do all data capturing, in your office or ours. We can help you set up a filing system – making an audit a walk in the park. Data Capturing of, Suppliers and Customers, Sending Statements, Stock List Control etc.
Accurate record keeping and bookkeeping is the groundwork for accounting and proper reporting. The better you keep your books, the more consequential and relevant the information and reports you will receive.
This service includes the following:
Capturing of cashbooks and doing the bank reconciliations
- Capturing of cashbooks and doing the bank reconciliations
- Capturing of invoices
- Reconciling debtor accounts
- Producing debtor age analysis
- Preparing monthly statements
- We strongly suggest procedures that will decrease the risk of non paying clients
- Capture of supplier invoices
- Reconcile your supplier ledger to supplier statements
- Producing remittance advices.
- We strongly suggest procedures that will reduce the risk of overpaying suppliers
- Setting up the general ledger accounts for meaningful and relevant information
- We uphold your general ledger accounts and reconcile all accounts
- Weekly Wage Payslips
- Monthly Salary payslips
- Monthly EMP201 returns
- Generate the IRP5’s and do the 2 half yearly IRP5 reconciliations
- Do all your VAT returns and reconcile the Vat control account
- We will also inform you if your supplier invoices do not comply with the Vat Act and handle any audits from SARS
- We specialise in providing accounting services, tax returns, payroll, bookkeeping, tax planning and tax advice, to all businesses including Sole Traders, Partnerships, Close Corporations and Individual Taxpayers
- We offer the best at affordable rates. We provide excellent service to all our clients in ensuring every effort is made to get the job done correctly and timeously
The tax situation is shifting all the time. To keep up with all these changes can be time consuming and costly.
SARS are setting there focal point on auditing and not administrative work. Did you notice that the capturing of VAT, TAX, PAYE, UIF, Income TAX and other return are now the responsibility of the business owner/employees? The SARS E-filing system was created for the TAX Payer. The possibility that your business will be audited in the near future by SARS is much higher than in the past. Getting the necessary TAX advice is very important.
Certain areas in your financial statements are immediately attracting the awareness of SARS. These are identifiable and we can help you to recognize the problem areas and make sure you comply to the law so that you can correct these areas. You necessitate to make sure that your business will survive a tax audit. We can assist you in this by steering you in the right direction or by handling your tax affairs all together.
This service includes the following:
Who needs to Register for VAT
Personal Tax Returns
We help you sort out your personal tax issues. Show you how to set up a simple spreadsheet to make filing your TAX easy. Need a TAX Directive, we do it for you. Yearly TAX Filing on E-Filing
Company Tax Returns
Need a TAX clearance certificate? Don’t let TAX become a nightmare, we can help you get your personal or company tax under controll
Trust Tax Returns
Provisional Tax Returns
Company, Trust and Individuals
Do your workers pay towards this fund? Not registered yet? We can do it for you!
Your business is growing and you need to register for VAT. To become a VAT vendor you have to qualify. We know how to help you and we deal with the frustrations. VAT is payable every second month
PAYE & SDL Returns
PAYE needs to be filed twice yearly as from 2010. Need someone to reconcile and file it for you, we have the knowledge. Remember PAYE needs to be paid on the 7th of each month. SDL (Skills development levies) – Help your business grow and develop your staff. You can claim back from this fund to help pay for training.
Workman Compensation Returns
Your Idea is great and you want to start ASAP. But, before you do, make sure that you know the advantages and disadvantages of the different structures whether as a sole proprietor, partnership, close corporation, trust or private company. Make sure you know how income tax laws will affect each business structure. Tax rates vary for the different structures and special tax allowance and rates are available to certain business structures.
Registrations of Business
- Registration of new Businesses
- Registration for Provisional Tax (as tax payer with SARS)
- Registration for Vat
- Registration for PAYE/SDL/UIF
- Registration for Workman compensation
- Appointing a Public Officer
- Members Certificates
- Any other Registration/Deregistration on request
Starting your Business
All Statutory Registrations
New Business Service
Your success is very important to us. We do not want to loose clients therefore we give you the very best and will help you succeed. We want you to be accounting smart and grow a strong business.
SARS are shifting their focus and expect more work from the employer. The reconciliation process of the IRP5’s is proof of this. You, as the company, have the accountability to ensure that the information on the IRP5 is correct. More and more businesses are outsourcing their payroll functions.
Payroll Outsource Functions
- Processing of Monthly and Weekly payroll
- Calculating allowances, deductions and other company contributions
- Producing and printing of payslips
- Processing and printing of all monthly & variance reports
- Generating and Printing IRP5’s and IT3 (a) certificates. (Twice yearly)
Benefits of Oursourcing your Payroll
- Remove time consuming payroll data capturing
- Take the stress of IRP5’s out of your hands
- Full compliance to current tax legislation
- Minimize fraud risks
- Professionalism and efficiency will minimize payroll queries
- Prevent SARS late penalties
- Solutions for all companies
- Guaranteed confidentiality