Top seven tax myths dispelled

You submit taxes every year, but how informed are you when it comes to tax? We dispel some of the most common tax myths.

1. Employees who are subject to PAYE do not have to submit income tax returns

Employees whose gross income consists only of remuneration from a single source do not need to submit an income tax return for the 2016 tax year, provided that:

. The remuneration does not exceed R350 000 for the tax year;

. No allowance or advance is included in the remuneration; and

. PAYE has been withheld on the remuneration.

2. I’m too young to pay taxes

In South Africa, the legal employment age is 15. Therefore, if an employee is 15 or older and earns more than R75 000 a year, the employer must withhold PAYE from the employee’s salary.

3. Money made over the internet is tax-free

Money made from a trade conducted over the internet must be included in a South African resident’s gross income and is taxable as ordinary income, provided that the amount is not of a capital nature.

4. Once I’ve received my refund I may no longer be subject to audit

The SA Revenue Service (Sars) may trigger an audit at any time to investigate any concerns it may have.

5. Sars is legally obliged to refund taxes overpaid without delay

Sars will only refund an amount to a taxpayer if its system has not detected any flag for an audit or if an audit has been satisfactorily completed.

6. Restaurant tips don’t count as taxable income

Restaurant tips paid to a waitron constitute amounts received for services rendered. As such, they are specifically included in gross income.

7. If you use eFiling, you end up going into a Sars branch in any event

If an individual wishes to change banking details or other personal details, Sars generally requires the information to be presented in person at a Sars branch. However, if there is no change of information or any other unusual circumstance, a taxpayer may file a tax return via eFiling and would generally not be required to visit a Sars branch. – Keelen Snyders, tax trainee at BDO SA.