RETURNS TO BE SUBMITTED BY A PERSON IN TERMS OF SECTION 25 OF THE TAX ADMINISTRATION ACT, 2011 (ACT NO. 28 OF 2011)

Gazette Number 43495 dated 03 July 2020 was published by the Commissioner of the South African Revenue Service (SARS) and is an update to the requirements for submitting / not-submitting tax returns for the 2020 year of assessment.

Firstly, let’s deal with the requirements when a return is NOT essential. Do not be misled by reading the criteria singularly; by reading and interpreting all the qualifying criteria you will realise that there is very little leeway given to permit a person not to submit a tax return.

Persons not required to submit an income tax return

1.) A natural person or estate of a deceased person is not required to submit an income tax return in terms of paragraph 2(f)(vii) or (2)(g) if the gross income of the person during the 2020 year of assessment consisted solely of gross income described in one or more of the following:

(a) Remuneration paid or payable from one single source, which does not exceed R500 000 and employees’ tax has been deducted or withheld in terms of the deduction tables prescribed by the Commissioner;

  • Interest (other than interest from a tax free investment) from a source in the Republic not exceeding—
  • R23 800 in the case of a natural person below the age of 65 years at the end of the year of assessment;
  • R34 500 in the case of a natural person aged 65 years or older at the end of the year of assessment; or
  • R23 800 in the case of the estate of a deceased person;

(c) Dividends and the natural person was a non-resident throughout the 2020 year of assessment; and

(d) Amounts received or accrued from a tax-free investment

2.) Subparagraph (1) does not apply to a natural person:

(a) who was paid or granted an allowance or advance as described in section 8(1)(a)(i) of the Income Tax Act other than an amount reimbursed or advanced as described in section 8(1)(a)(ii) or an allowance or advance referred to in section 8(1)(b)(iii) that does not exceed the amount determined by applying the rate per kilometre for the simplified method in the notice fixing the rate per kilometre under section 8(1)(b)(ii) and (iii) to the actual distance travelled;

(b) who was granted a taxable benefit described in paragraph 7 of the Seventh Schedule to the Income Tax Act; or

(c) who received any amount or to whom any amount accrued in respect of services rendered outside the Republic.

3.) A natural person is not required to submit an income tax return in terms of paragraph 2(f)(vii) if:

(a) the person is notified by the Commissioner in writing that he or she is eligible for automatic assessment; and

(b) the person’s gross income, exemptions, deductions and rebates reflected in the records of the Commissioner are complete and correct as at the date:

  • of accepting automatic assessment; or
  • specified in paragraph 4(b)(iii), irrespective of whether the return relates to a provisional taxpayer, if he or she does not respond to the notification by this date.

Once you have read all of the above criteria, which in itself is difficult to follow, you will notice that in almost all circumstances you would need to submit a tax return in any event.

Now let’s deal with the Persons who MUST submit an income tax return

In reading these requirements you will notice that submitting a return applies to almost all persons anyhow.

The following persons must submit an income tax return:

(a) Every company or other juristic person, which was a resident during the 2020 year of assessment that:

  • derived gross income of more than R1 000;
  • held assets with a cost of more than R1 000 or had liabilities of more than R1 000 at any time;
  • derived any capital gain or capital loss of more than R1 000 from the disposal of an asset to which the Eighth Schedule of the Income Tax Act applies; or
  • had taxable income, taxable turnover, an assessed loss or an assessed capital loss;

(b) Every trust that was a resident during the 2020 year of assessment;

(c) Every company, trust or other juristic person, which was not a resident during the 2020 year of assessment, that:

  • carried on a trade through a permanent establishment in the Republic;
  • derived income from a source in the Republic; or
  • derived any capital gain or capital loss from the disposal of an asset to which the Eighth Schedule to the Income Tax Act applies;


(d) Every company incorporated, established or formed in the Republic, but that was not a resident as a result of the application of any agreement entered into with the Government of any other country for the avoidance of double taxation during the 2020 year of assessment;

(e) Every natural person who during the 2020 year of assessment:

  • was a resident and carried on any trade (other than solely in his or her capacity as an employee); or
  • was not a resident and carried on any trade (other than solely in his or her capacity as an employee) in the Republic;

(f) Every natural person who during the 2020 year of assessment—

  • was a resident and had capital gains or capital losses exceeding R40 000;
  • was not a resident and had capital gains or capital losses from the disposal of an asset to which the Eighth Schedule to the Income Tax Act applies;
  • was a resident and held any funds in foreign currency or owned any assets outside the Republic, if the total value of those funds and assets exceeded R225 000 at any stage
  • during the 2020 year of assessment;
  • was a resident and to whom any income or capital gains from funds in foreign currency or assets outside the Republic was attributed in terms of the Income Tax Act;
  • was a resident and held any participation rights, as referred to in section 72A of the Income Tax Act, in a controlled foreign company;
  • was a resident and had taxable turnover; or
  • subject to the provisions of paragraph 3, at the end of the 2020 year of assessment—
  • (aa) was under the age of 65 and whose gross income exceeded R79 000;
  • (bb) was 65 years or older (but under the age of 75) and whose gross income exceeded R122 300; or(cc) was 75 years or older and whose gross income exceeded R136 750;

(g) Subject to the provisions of paragraph 3, every estate of a deceased person that had gross income during the 2020 year of assessment;

(h) Every non-resident whose gross income during the 2020 year of assessment included interest from a source in the Republic to which the provisions of section 10(1)(h) of the Income Tax Act do not apply; and

  • Every person that is issued an income tax return form or who is requested by the Commissioner in writing to furnish a return, irrespective of the amount of income or nature of receipts or accruals of the person;
  • Every representative taxpayer of any person referred to in subparagraphs (a) to (i) above.

Again, after reading the exhaustive list of criteria above you would realise that submitting a tax return is the preferred route and the services of suitably qualified Tax Professionals is essential.

Author Craig Tonkin

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