South African Personal Income Tax

Nyasha Musviba

What is it?

Income tax is the normal tax which is paid on your taxable income.
 
Examples of amounts an individual may receive, and from which the taxable income is determined, include –
  • Remuneration (income from employment), such as, salaries, wages, bonuses, overtime pay, taxable (fringe) benefits, allowances and certain lump sum benefits
  • Profits or losses from a business or trade
  • Income or profits arising from an individual being a beneficiary of a trust
  • Director’s fees
  • Investment income, such as interest and foreign dividends
  • Rental income or losses
  • Income from royalties
  • Annuities
  • Pension income
  • Certain capital gains

Who is it for?

You are liable to pay income tax if you earn more than R63 556 in the 2013 year of assessment, and are younger than 65 years of age. If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R99 056. For taxpayers aged 75 years and older, this threshold is R110 889.
 
Where taxpayers receive remuneration which is less than R250 000, they may elect not to submit an income tax return, provided the following criteria are met:
  • Their remuneration is from a single employer;
  • Their remuneration is for a full year of assessment (1 March – 28/29 February);
  • No allowance was paid, from which employees’ tax was not fully deducted;
  • No further deductions need to be claimed or income declared.
The rates of tax chargeable on taxable income are determined annually by Parliament, and are generally referred to as “marginal rates of tax” or “statutory rates”. The rate of tax levied on an individual is set on a sliding scale which results in the tax increasing as taxable income increases. Every year, the Minister of Finance announces the rates to be levied by publishing the applicable tax tables during the annual budget speech.

What steps must I take to ensure compliance?

Step one: You must register for income tax
If you earn a taxable income which is above the tax threshold (see above), you must register as a taxpayer with SARS.
To register for income tax, you must complete an IT77 registration form which can be obtained from the SARS website, namely www.sars.gov.za. The form can also be requested from any SARS branch or the SARS Contact Centre. Once it has been completed, it can be taken to any SARS branch for processing or the form can be posted to SARS. To find your nearest branch visit our branch locator.
 
Top tip: You must register for income tax at SARS within 60 days of becoming liable for tax.
 
Step two: You must submit a return
If you are registered for income tax, you will be required to submit an annual income tax return to SARS. See the 2012/2013 Tax Tables. The 2013 year of assessment (commonly referred to as a “tax year”) runs from 1 March 2012 to 28 February 2013. Every year, SARS announces its Tax Season, a period during which you are required to submit your annual income tax return. The tax season for the 2013 tax year opens on 1 July 2013. The income tax return which should be completed by individuals is known as the ITR12 form. For more information, see our ITR12 Comprehensive Guide, source codes and live stock values.
 
When should it be submitted?
  • The deadline for all taxpayers who wish to submit their tax return manually, by mail or by drop-off at any dedicated SARS drop box, is 27 September 2013.
  • The deadline for all taxpayers who submit their returns electronically at a SARS branch is 22 November 2013, so if you do it online you get more time!
  • Non-provisional taxpayers who file via eFiling have until 22 November 2013 to submit their returns.
  • Provisional taxpayers who file via eFiling have until 31 January 2014 to submit their returns.
If you don’t submit your income tax return on time, you may be liable for penalties.

How should it be submitted?

Online: The easiest and quickest way to file a tax return is online, by making use of SARS eFiling. You must, however, first register for eFiling on the SARS eFiling website. We have a page where we explain to you in detail how to register for eFiling. Once registered, you can complete the online form to create your return. Note that you will start by completing the first page of the form which contains several questions regarding the nature of your tax affairs (referred to as a return “wizard”). Completion of this part will automatically tailor the tax return to your specific tax requirements.
 
Once you have registered for eFiling, you can also file your return by making use of your cellular phone in linking with our mobisite. Alternately, you can download our eFiling App, after which you will be able to file your individual Income Tax Returns quickly and easily via your iPhone 4 or 4s, iPad, Android phone and Android tablet.
 
In a branch: The tax return can also be requested by visiting any SARS branch office. To find your nearest branch visit our branch locator. (Please note that there may be delays and queues during filing season, which is why SARS promotes the use of eFiling as a medium for return submission.)
 
Top Tip: When completing your return, you will require the following documentation in order to verify the existing, pre-populated information that appears in the return, as well as to complete any remaining portions:
  • IRP5: This is the employees’ tax certificate your employer issues to you. 
  • Certificates you received for local interest income earned. 
  • Any other documentation relating to income received or accrued, such as remuneration that has not been reported to SARS by your employer, or business or investment income, etc.
  • Details of medical expenses paid and medical scheme contributions made.
  • The relevant certificates reflecting your retirement annuity fund contributions made.
  • A logbook and other documents in support of business travel expenses (if the travel allowance is part of your remuneration or if you have the right of use of a company car taxable benefit).
  • Any other documentation relating to the allowable deductions you wish to claim.