These 5 mistakes can cost you dearly with SARS
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With the South African Revenue Service (SARS) seeking to increase its revenue base, organisations with misconceptions about how certain payroll elements should be taxed, may unknowingly be exposing themselves financially.
This is the view of Tanya Tosen, tax and remuneration Specialist at Tax Consulting South Africa, who said her firm often comes across the same common payroll errors.
Tosen outlined these common issues in more detail below.
Did you apply the 80/20 rule of travel?
There are two main rules for taxing an employee’s travel allowance. Either 80% of their mileage is for business purposes, and the remaining 20% is subject to tax.
Expat tax changes for South Africa explained
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South African expatriates have been kept in suspense regarding a proposed law change aimed at providing relief to those who could not leave the country under lockdown.
This amendment was confirmed with the promulgation of the Taxation Laws Amendment Act (TLAA) on 20 January 2021, which means these expatriates can now rest easy, says Jean du Toit, head of Tax Technical at Tax Consulting SA.
Under the amendment, South African resident taxpayers who earn their remuneration in respect of services rendered abroad may qualify for an exemption from income tax of up to R1.25 million, he said.
A more stringent verification process and risk management test are in the pipeline, if the Budget Speech in February 2020 is anything to go by.
Current legislation allows a person who has formalised his or her emigration by using the financial emigration process, to fully withdraw their retirement funds when the process is complete.
President Cyril Ramaphosa, however, now signed the Taxation Laws Amendment Act into law, effective from 1 March 2021.
The consequence is that, from that date, certain retirement benefits will be locked in for a minimum period of three years.
President Cyril Ramaphosa has signed the 3-year retirement fund lock-in into law as part of the Taxation Laws Amendment Act and it will become effective as from 1 March 2021.
Relief for expats confirmed it-online.co.za - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from it-online.co.za Daily Mail and Mail on Sunday newspapers.
Jan 26, 2021
The President has given effect to the 2020 tax proposals by signing three tax Acts into law.
By Jean du Toit, head of tax technical at Tax Consulting SA
On 15 January 2021, the President gave his assent to the Rates and Monetary Amounts and Amendment of Revenue Laws Act No. 22 of 2020 (Rates Act), the Taxation Laws Amendment Act No. 23 of 2020 (TLAA) and the Tax Administration Laws Amendment Act No. 24 of 2020 (TALAA). These Acts were promulgated on 20 January 2021.
The Rates Act gives effect to changes in tax rates and certain monetary thresholds, whereas the TLAA and the TALAA contain more profound technical and administrative changes. Highlighted below are 10 key changes taxpayers need to know.