Not sure whether you must submit an Income Tax Return (ITR12)?
Answer these simple questions and find out:
Do any of the following apply to you for the tax year 1 March 2020 to 29 February 2021?
- Did you conduct any trade* in South Africa?
- If you are a South African tax resident, did you conduct any trade or employment outside South Africa?
- Did you earn interest exceeding the annual exempt amount? (Interest earned of R23 800 by an individual below the age of 65 years and interest earned of R34 500 by an individual aged 65 years or older is exempt from income tax.)
- Did you receive an allowance such as a travel, subsistence or office bearer allowance or a company vehicle fringe benefit? Check your IRP5/IT3(a) if unsure.
- Did you hold any funds in foreign currency or assets outside South Africa that have a combined total value of more than R250 000 at any stage during the tax year?
- Did you have Capital Gains or Capital Losses exceeding R40 000?
- Was any income or a Capital Gain from funds in foreign currency or assets outside the Republic attributed to you?
- Do you hold any rights in a Controlled Foreign Company?
- Did you receive an Income Tax Return or were you asked to submit an Income Tax Return for the tax year?
Who pays tax?
People who pay income tax are generally individuals who earn an income (from a salary, commission, fees, etc.).
Corporate tax includes tax paid by companies or close corporations, as well as trusts, on their annual income. Most of the State’s income is derived from Income Tax (personal and corporate tax), although nearly a third of total revenue from national government taxes comes from indirect taxes, primarily Value-Added Tax (VAT).
South Africa has a residence-based tax system, which means residents are, subject to certain exclusions, taxed on their worldwide income, irrespective of where their income was earned. By contrast, non-residents are taxed on their income from a South African source. Non-residents pay tax on their income from a South African source.
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
- Pension income
- Certain capital gains
You are liable to pay income tax if you earn more than:
- For the 2021 year (1 March 2020 – 28 February 2021)
- For the 2020 year (1 March 2019 – 29 February 2020)
- For the 2019 year (1 March 2018 – 28 February 2019)
- R83 100 if you are younger than 65 years.
- If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R128 650.
- For taxpayers aged 75 years and older, this threshold is R143 850.
- R79 000 if you are younger than 65 years.
- If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R122 300.
- For taxpayers aged 75 years and older, this threshold is R136 750.
- R78 150 if you are younger than 65 years.
- If you are 65 years of age or older, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R121 000.
- For taxpayers aged 75 years and older, this threshold is R135 300.
To get ready to submit your tax return, you will need to gather all your supporting documents which include the following:
- IRP5/IT3(a) certificate(s) from your employer or pension fund.
- IT3(b) certificates for investment returns.
- Financial statements, if applicable e.g. business income.
- Medical aid contribution certificates and receipts (which can be obtained from your medical aid directly).
- Retirement annuity fund certificates (which can be obtained from your retirement annuity fund directly).
- Certificates you received for local interest income earned.
- Logbook and other documents in support of business travel expenses
- Completed confirmation of diagnosis of disability form (ITR-DD), if applicable
- Any other relevant income and deduction information.
- Bank account details (if your banking details have changed, you will need to manually submit this to your local SARS branch, call SARS on 080 000 7277 to find out more information).
For a complete list of supporting documents, click here.
Tip: Even though you will be using the supporting documents to complete your return, you mustn’t send them to SARS. You must keep them safely for a period of five years should SARS require them in future.
Tip: Check your IRP5 and verify if all the information is correct before attempting to submit the return. If you notice any errors which might need to be corrected, kindly advise your employer to rectify it. You will not be able to change these pre-populated fields on the return.
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