As we approach the end of February 2025, it's time for a friendly reminder about some important tax deadlines. The second provisional tax payment is due by the end of February 2025. 

This is a crucial deadline for all taxpayers, and it's essential to ensure that your payments are made on time to avoid any penalties or interest from SARS.

As your trusted accountant, I want to share an incredible opportunity for you to grow your wealth without the burden of taxes. Introducing the Tax-Free Savings Account (TFSA) – a powerful tool designed to help you save more efficiently.

A Tax-Free Savings Account (TFSA) is a special type of savings account that allows you to earn interest, dividends, and capital gains without paying any tax on these earnings. This means that all the growth in your investment remains entirely yours, free from the clutches of the taxman.

The South African Revenue Service (SARS) has recently updated the definition of "residence" in the VAT Act, effective from the 1st of January 2025. The recent change in the VAT Act's definition of residence was made to align the VAT regulations with the criteria used in the Income Tax Act. This alignment aims to provide clarity and consistency across different tax regulations, ensuring that the criteria for determining residency are uniform.

As the start of a new tax year approaches, it’s time to shift our focus towards effective tax planning and ensuring a smooth filing process when the time comes. For South African taxpayers, this means being proactive about retirement annuity contributions and keeping track of important documents as well as remembering to track your travel if you receive a travel allowance. With filing season typically kicking off in July, now is the perfect time to get organised and stay ahead of the game.

As we approach February 2025 it's time to remind you about the upcoming deadline for the 2nd provisional tax payment. This applies to companies with a financial year ending in February, as well as all provisional taxpayers in South Africa. Ensuring that your provisional tax is submitted on time is crucial to avoid penalties and interest imposed by the South African Revenue Service (SARS).

As part of ongoing efforts to streamline tax processes and ensure accurate reporting, SARS has introduced a new requirement for trusts: the IT3(t) form.

The new IT3(t) requirements for trusts will be effective for the 2024 tax year. Trustees are required to submit the IT3(t) certificates by 31 May 2024. This means that all distributions made to beneficiaries between 1 March 2023 and 28 February 2024 must be reported using the IT3(t) form by this deadline.

The South African Revenue Service (SARS) has introduced a new security measure for individual taxpayers using the eFiling system. Starting from 22 November 2024, SARS will require all individual taxpayers to register a cellphone number to their eFiling profile and enter a One Time Pin (OTP) for certain actions. This new requirement aims to enhance the security of your tax profile and protect your personal information.

Proper record-keeping is essential for accurate tax reporting and compliance with the Tax Administration Act and other relevant tax laws in South Africa. Maintaining accurate and complete records is crucial for a few reasons: It substantiates the information reported in your tax returns, It enables you to respond effectively to any queries or audits from SARS, and it provides a clear financial history, which is beneficial for personal financial management and planning.

We understand that the thought of a VAT audit can be daunting, but it needn’t be. With the right preparation and a thorough understanding of the process, it can be a smooth and stress-free experience.

In this blog, we will provide you with an overview of why a VAT audit happens in South Africa, what the process entails, and how we ensure that all necessary documents are ready and available from the start.

With the growing popularity of cryptocurrencies, it's crucial to understand how these assets are treated by the South African Revenue Service (SARS) and why you need to disclose them in your yearly tax return.

SARS requires that any income or gains from crypto assets, including digital wallets and crypto accounts, be disclosed in your tax return. This includes exchange tokens (such as Bitcoin), non-fungible tokens (NFTs), and utility tokens.

South Africa has a Dividends Tax regime, which taxes dividend income at a flat rate of 20%, regardless of the amount. One crucial aspect to keep in mind is that dividends are paid out of a company's profits after company taxes have been paid. In South Africa, the standard corporate tax rate is 27%. This means that before any dividend is declared, the company must first pay tax on its profits at this rate.

A Compliance Tax Pin from SARS (South African Revenue Service) is a digital tool that allows individuals or entities to prove their tax compliance status to third parties. It is essential for various reasons, including: Tender Applications: When applying for government or private tenders, it is often required to show proof of tax compliance. A valid compliance tax pin provides quick verification.

As you continue to plan for your retirement, it's crucial to understand the two-tier retirement pot system recently implemented in South Africa and how withdrawals from your retirement fund can affect your tax obligations.

Starting September 1, 2024, contributions will be split into savings and retirement components at a ratio of one-third and two-thirds, respectively. The two-tier retirement pot system was introduced in South Africa to provide greater flexibility and security for individuals when they retire.

As a self-employed professional in South Africa, your business is your livelihood. Whether you're a consultant, freelancer, tradesperson, or small business owner, the income you earn is dependent on your ability to work. But have you ever considered what would happen if, due to an unforeseen illness, injury, or accident, you were suddenly unable to work?

The team is hard at work at making our clients' lives easier and, we hope, better. Loads of business owners want to do their own accounts, but don’t know how Xero works, or want to have an accounting practice to help them to do it properly and accurately themselves, because they want to learn.

Written by Roulon du Toit CA (SA)

Both executive directors and non-executive directors (NEDs) may earn income from the companies in which they hold office. However, the tax treatment of these earnings—and the related expenses incurred—vary greatly between these two types of directors. In 2017, SARS released two Binding General Rulings (numbers 40 and 41) which provided more clarity on the treatment of NEDs.

Written by Roulon du Toit

A lot of South African taxpayers are unaware that they could reduce their taxable income if they made donations to Public Benefit Organisations. When a South African resident makes a donation, it is important to realise that there are tax consequences which may lead to either an increased tax burden or tax relief.

First, it is important to note that donating may attract a Donations Tax liability. This is something that taxpayers are unaware of and can be quite costly. We will not be exploring this in this blog, but be aware that if you donate cash (or any other asset) there may donations tax, especially if the value exceeds R100 000. For example, if you purchase a car and then transfer ownership to your child it will likely attract Donations Tax.

If you are registered as a company or sole proprietor in South Africa, you can choose to pay either standard small business income tax rates or turnover tax.

Turnover tax is a simplified tax rate aimed at reducing administration for small businesses with an annual turnover of less than R1 million. If your turnover goes over R1 million, then you will need to register for VAT and pay tax on the standard tax rates.

Tax-deductible business expenses are any expense incurred in the production of income or in the running of the business.

For example, stock bought for resale is considered a business expense or stationery bought for the office is also considered a business expense. You must keep a record of these business expenses.

When it comes to decreasing your VAT bill in South Africa, it's crucial to adhere strictly to legal methods and maintain meticulous accounting records. While it may be tempting to look for shortcuts, any attempt to evade taxes illegally is not worth the risk and can lead to severe penalties.

If your business's turnover exceeds one million rand in a 12-month period, VAT registration is mandatory. Ensuring you claim the maximum possible inputs can significantly reduce your cash outflows.