The South African Revenue Service (SARS) has confirmed that the 2023 tax season will commence as follows:

• Individual taxpayers (non-provisional): 7 July 2023 to 23 October 2023
• Provisional taxpayers: 7 July 2023 to 24 January 2024

SARS has also announced many changes to this upcoming filing season and has already begun auto-assessing taxpayers from 1 July 2023. These changes must be clearly understood by taxpayers, so they can compliantly navigate this year’s filing season. 

Termination of the 40 Business Days Rule

During the 2022 tax season, taxpayers were surprised by the change to a 40-business day limitation on amending the SARS auto-assessments issued. This gave taxpayers and tax professionals alike the grief of special applications to extend corrections on these auto-assessments. 

This has ultimately left them feeling that the auto-assessment process is now much more burdensome. 

As such, this was raised by the professional institutions with SARS and the changes for 2023 indicate that SARS has kindly heard these requests and thankfully extended the period for correction on auto-assessments to align with the filing season. This breathes a sigh of relief for many auto-assessed taxpayers to allow for time on correction steps where appropriate. 

Stern Eye to Foreign Income Disclosure

In line with promises for more stringent verifications on South Africans working abroad, SARS has noted there were discrepancies in the 2022 year of assessment of declarations. They have acknowledged that although implementations were made for the 2022 year, fields were missing to allow for accurate declarations on foreign services rendered. 

SARS has therefore introduced three new fields of declarations for South Africans working either for a foreign employer whilst in SA: 

• Income received from foreign employment services not reflected on a South African IRP5/IT3(a) certificate, subject to tax outside RSA, and the s10(1)(o)(ii) exemption does not apply.
• Income received from foreign employment services not reflected on a South African IRP5/IT3(a) certificate, subject to tax outside RSA, and the s10(1)(o)(i) exemption applies.
• Income received from foreign employment services not reflected on a South African IRP5/IT3(a) certificate, subject to tax outside RSA, and the s10(1)(o)(i) exemption does not apply.

Promise to Ease the Burden – Automated Section 93 Reduced Assessment

A taxpayer who is aggrieved by an assessment has the right to dispute the assessment. Section 93(1)(d) of the Tax Administration Act introduces a less formal process to request the correction of an assessment. This process is generally manually undertaken by taxpayers and tax professionals; however, SARS has promised an automating of the process whereby taxpayers can complete the RRA01 form via eFiling. This provides an alternative for taxpayers to the formal dispute resolution process, which is typically quite burdensome and often requires professional assistance. 

Home Affairs and SARS Working Together

SARS has confirmed collaboration with the Department of Home Affairs to verify whether marital statuses have been accurately declared within taxpayers' registered details. This further indicates the striving by SARS to give full verification using 3rd party information to ensure taxpayers are making accurate declarations and no ill declarations are made.

The benefit for those taxpayers married in a community of property is that SARS will use this to prepopulate each spouse's return with their respective shared investment income, thereby enabling auto-assessments and an easier submission process for these taxpayers.  

Risk and Burden of Proof Remain with the Taxpayer

It is important to remember that accepting and not amending an automated assessment where appropriate carries risks, as automated assessments may be erroneous and by accepting it, could result in a taxpayer paying the incorrect tax obligation. 

Thus, whether you are or are not auto-assessed the burden of proof always remains on the taxpayer and they should ensure accurate completion of their ITR12 are recorded with SARS. 

With these changes in mind, it is imperative to understand that SARS is on a compliance drive, with the Commissioner of SARS saying, on multiple occasions that SARS will make non-compliance “hard and costly.” 

Whether you are a South African working abroad or a taxpayer with multiple revenue streams and complexities in your affairs, it is prudent to use a qualified tax practitioner this season.

Written by Crystal Venter, Tax Consultant; and Monique Spray, Tax Consultant; Tax Consulting SA