SARS has introduced some adjustments to the auto-assessment process this year to make it easier for taxpayers to file their income tax returns.
An auto assessment is conducted based on the data received from employers, medical aids, banks, retirement annuity funds, etc. The taxpayer will be notified by SMS or email after SARS has finished the auto assessment, and they will be able to examine it on the eFiling platform or the SARS MobiApp.
Taxpayers can view the third-party data used to prepopulate their tax returns to ensure that the data is correct. The taxpayer does not need to do anything to “submit” the assessment if they are confident that it is accurate, and contains all the necessary information. If they believe it to be accurate but still have a payment owing to SARS, they must do so by the deadline listed on the Notice of Assessment (ITA34).
Important Note: A taxpayer must access their tax return, finish it, and file it within 40 working days if they believe the auto-assessment is inaccurate or does not include information on all sources of income or permitted deductions. If this is not possible, taxpayers can apply for an extension via the SARS MobiApp or SARS eFiling before the 40 days have passed or within 21 business days of the 40 days on reasonable grounds. Only in extreme circumstances, which may be challenging to prove, will extensions past 21 business days be granted.
The late filing of a tax return will result in administrative fines. Penalties previously only applied when there were two or more past-due tax returns. However, effective December 2021, SARS will impose administrative fines for unfiled tax returns. These fines, which are based on taxable income, can range from R250 to R16,000 for every month the return is past due. From the first day that the return is overdue, these fines increase so please be vigilant and be on the lookout for notices from SARS.
Here’s what you can do to prepare for tax season 2022:
- Verify your status as a provisional taxpayer. Non-provisional taxpayers have earlier filing deadlines, but provisional taxpayers have a deadline of 23 January 2023.
- You probably aren’t a provisional taxpayer if your only sources of income are a wage and interest that total less than R23,800 for those under 65 and less than R34,500 for those 65 and older, respectively. You must submit your returns by 24 October 2022. (Unless you are auto-assessed.)
- If you are not a provisional taxpayer and receive interest and salary via a bank account; you may be automatically assessed and given a SARS assessment with third-party data pre-populated. Watch out for the SMS or email from SARS notifying you that your auto-assessment in the form of an assessment is available for viewing on SARS eFiling or the SARS MobiApp.
- As soon as SARS sends you an auto-assessment SMS or email, log onto eFiling to review the assessment and the third-party information used to determine the amount of tax or rebate. You do not have to “submit” the assessment if you are satisfied with it. This is different from the 2021 filing season, which called for the submission of an estimated assessment. The SARS website notes that the refund process takes roughly 72 hours from the date the assessment was issued to you if you are entitled to one. If you owe SARS tax, you must pay by the assessment’s due date to avoid incurring interest.
- If you disagree with the assessment, you have 40 business days from the day the assessment was issued to receive and file a tax return via eFiling. (However, you will need to work with the appropriate third party to have the data updated if you are unhappy with the third-party data used.) This filing season, there is a new requirement that returns be obtained and finished within 40 business days. For instance, if you were auto-assessed and disagree with the assessment released on 1 July 2022, you must complete the tax return by 29 August 2022. (i.e., 40 business days after 1 July 2022).
- What if you need additional time to finish your tax return because you are unsatisfied with your auto-assessment assessment? If a request with acceptable justification is made, ideally within the 40 working days following the delivery date, SARS may grant an extension for you to file the return. If you are late, you still have until 21 business days after the passing of 40 business days from the day of the assessment’s issue date to submit a request for an extension if you have a good cause.
- Watch out for administrative fines. In this case, the deadlines for taxpayers who are auto-assessed but want to file tax returns and taxpayers who are not auto-assessed but want to file returns are somewhat ambiguous. If you are auto-assessed but want to file a return, it appears (although it is not apparent) that your due date to file the completed return may be earlier than 24 October 2022. If you are auto-assessed and receive a filing extension, we advise filing the return by the deadline outlined in your extension, even if it is earlier than 24 October 2022.