Johannesburg - SA
Revenue Service's online tax submission system, Sars e-filing,
has made tax submissions simpler, but business owners need
to take care when submitting returns online.
"The implications of submitting the more multifaceted tax items incorrectly
can be detrimental to taxpayers, with inflated amounts inaccurately
being paid to Sars," consultancy Grant Thornton said in
a statement on Wednesday.
While the 2010 tax filing season officially opened on July 1, the
deadline for electronic submissions on e-filing is November 26, 2010
as opposed to the postal submissions deadline which is September
The deadline for people or trusts which are classified as provisional
tax payers has been extended to January 31, 2011.
"Company tax returns differ significantly, however, from those applicable
to individuals with the submission deadline only 12 months
after the company's financial year end," tax partner Neville Sweidan
Details relating to foreign income, capital gains or losses, local
farming, non-taxable considerations or local business, trade and
professional income could become complicated issues to submit correctly
"In terms of income earned outside of South Africa's borders, often
a withholding tax has been deducted by the foreign institution."
Strict on deadlines
Sweidan said that in certain circumstances, the withholding tax was
deductible from South Africa taxes payable - which could result
in a significant saving for the taxpayer.
Capital gains and losses were also a complex section of the tax legislation
and it was important to have all the necessary information
at hand in order to claim the appropriate base cost or exclusions.
Another tax complication could arise when individual taxpayers experienced
a sudden increase or decrease in net assets, which was reflected
in statements of assets and liabilities arising from non-taxable
receipts or losses.
"It is very important to explain the reasons for the increase or loss
to Sars appropriately," Sweidan said.
"Failure to do so can result in exasperating queries and delays in
receiving correct assessments."
He said Sars was very strict on deadlines as well as whether an individual's
personal particulars on record were accurate.
"Penalties for inaccurate personal details or late submissions can
range from R250 to R16 000 a month, depending on the category of
the taxpayer which is determined by the individual's taxable income."
Sweidan said using e-filing to submit company and personal tax returns
on time and accurately was certainly a whole lot more efficient,
but it might require some careful preparation and research
beforehand, to confirm all data is correct, and so limiting the need for amendments later on.