SARS Snapshot: Key Highlights for January 2024

2 Feb

In the opening month of 2024, the South African Revenue Service (SARS) have issued crucial updates and communications, shaping the landscape of tax and accounting. From solar energy tax credits impacting provisional tax to trade surplus fluctuations and amended criteria for tax practitioners, these changes bear significant implications for businesses and individuals alike. Additionally, customs and excise updates, including deferment payment reminders, transfer pricing adjustments, and tariff amendments, add complexity to the regulatory environment. Here's a comprehensive summary of the noteworthy developments shaping South Africa's fiscal and economic landscape.

1. Solar Energy Tax Credit can be deducted from Provisional Tax

Provisional taxpayers can now consider the solar energy tax credit when calculating the second-period provisional tax payment.

The Provisional Tax Return (IRP6) has now been updated with a “Solar energy tax credit” field to enable provisional taxpayers to include their tax credit in their second provisional tax payment for the 2024 assessment year.

For more information, see sections 10.1 and 10.5 of the updated Guide for Provisional Tax – External Guide here.

Read the CIBA Solar Tax Incentive Guide for more guidance under your member profile, Practice Support/Guides.

2. Trade surplus reported December 2023

In December 2023, South Africa had a preliminary trade surplus of R14.1 billion, which means we made R14.1 billion more from exports (selling things to other countries) than we spent on imports (buying things from other countries), including trade with Botswana, Eswatini, Lesotho, and Namibia.

However, when we look at the whole year from January 1 to December 31, 2023, our trade surplus was R61.0 billion. This is not as good as 2022, when we had a surplus of R192.0 billion. This indicates that, overall, the trade figures have got worse.

Read the SARS Media release here.

3. Amended criteria for registration of Tax Practitioners and the recognition of Controlling Bodies

The amended criteria regulating tax practitioners summarise the following information:

Requirements of individuals when registering as a Tax Practitioner.
Requirements of Tax Practitioner Membership relating to their RCBs.
Requirements of Controlling Bodies to be approved as RCBs.

All tax practitioners should understand these requirements and processes to ensure compliance. The amended criteria govern the processes implemented by CIBA.

You can read the updated guide here.

4. Draft SARS guide and explanatory note for Solar Energy Tax Credit issued for comments

The requirements of section 6C are explained under these headings:

Persons eligible for the solar energy tax credit
Solar photovoltaic panel requirements:

a. Solar photovoltaic panels must be “new and unused”

b. Generation capacity of solar photovoltaic panels

c. Solar photovoltaic panels must be “brought into use for the first time”

d. Installation requirements of the solar photovoltaic panels

Allowable amount of tax credit
Prohibition of double deductions
Multiple persons incurring the cost of the solar photovoltaic panels
Provisional tax implications
Disposal of solar photovoltaic panels and capital gains tax
Income tax returns
Recordkeeping

Examples are provided in the guide on:

Example 1 – The requirements “new and unused” and “brought into use for the first time
Example 2 – Allowable amount of solar energy tax credit
Example 3 – Multiple persons incurring the cost of solar PV panels

You can read the SARS guide here.

Your input matters! Send your comments to technical@myciba.org.

CUSTOMS AND EXCISE NEWS

5. Reminder that the 13th deferment payment is due for 2023/24

Custom clients who are deferment account holders are reminded regarding the 13th deferment payment requirements that become due by the end of the financial year, 28 March 2024.

All account holders must ensure timely reconciliation and payment, with the payment deadline no later than 15:00 on March 28, 2024. The statement period for this 13th payment of the 2023/2024 financial year will conclude on March 27, 2024, at 00:00 (Midnight).

For account holders using e-filing, e-statements will be accessible from 04:00 on March 28, 2024. Those not on e-filing are advised to coordinate with their Customs Branch Office to receive their statements via email.

Remember to initiate payment well in advance if your bank does not offer immediate direct payment to meet the specified deadline and avoid deferment suspension.

6. Draft rule amendments on transfer pricing adjustments

SARS issued draft rule amendments for comment, providing more clarity for multi-national enterprises on accounting for their transfer pricing adjustments on previous Customs declarations.

These amendments are designed to ensure that transfer pricing adjustments affecting the customs value of goods are properly reported to SARS, allowing for appropriate customs duty and VAT assessments and adjustments.

Rule 40.03 has been inserted

This rule pertains to the adjustment of bills of entry when the customs value of goods is affected by transfer pricing adjustments in accordance with the OECD Transfer Pricing Guidelines.
Stating that when adjustments are required under section 40(3)(a)(i), the bills of entry may be adjusted by following the process outlined in rule 41A.01.

Section 41A.01 has been inserted after rule 41.05

The rule deals with submitting notices regarding amended invoices or debit/credit notes when transfer pricing adjustments impact the customs value of good, defining key terms, including "transfer pricing adjustment" and "adjustment period."
It also outlines the requirements for importers to disclose circumstances of transfer pricing adjustments to SARS within a specified timeframe.
Importers can submit a notification letter via email to the designated SARS email address or by hand to any customs office.
The letter of notification must be accompanied by various documents, including authorisation for submission by a representative, amended invoices or debit/credit notes, transfer pricing policy details, a spreadsheet reflecting affected bills of entry, and more.
Additional requirements for documentation, such as purchase and sale agreements, financial statements, and other relevant records, are specified.
Importers must also comply with any further instructions issued by SARS related to information submission, payment of duties and VAT, or claiming refunds.

Read the draft rule amendment here.

Your input matters! Email your comments on the draft rule to technical@myciba.org.

7. Tariff amendments published

There were various tariff amendments published by SARS, affecting the following items:

Amendment to Part 1 of Schedule No. 1 to implement changes in customs duties rates under the African Continental Free Trade Area (AfCFTA) Agreement. Changes become effective from 31 January 2024.
Amendment to Schedule No. 1, relating to goods imported from AfCFTA state parties. Additional notes were inserted in Part F and substituting Appendix IV in Part F, to implement the AfCFTA Agreement. Changes become effective from 31 January 2024.
Amendment to Schedule No. 1 for General Note O to implement the AfCFTA Agreement. Changes become effective from 31 January 2024.
Amendment to Part 2A of Schedule No. 1 to increase excise duty rates for heated tobacco products as per Budget proposals.
Amendment to Part 1 of Schedule No. 3 creating a full-duty rebate for titanium dioxide. Effective until 25 January 2027.
Amendment to Part 1 of Schedule No. 3, reviewing rebate item 311.18/63.09/01.04 for "wiping rags." Effective from 26 January 2024 until 25 January 2026.
Amendment to Part 2 of Schedule No. 4 to create temporary rebate provisions for importing meat and edible offal of Gallus Domesticus.
Amendment to Part 2 of Schedule No. 4, including the insertion of rebate item 460.15./7301.10/01.06 for sheet piling of iron or steel.
Amendment to Part 2 of Schedule No. 4 creates temporary rebate provisions for certain flat-rolled products of iron or non-alloy steel.
Amendment to Part 2 of Schedule No. 4 creates a temporary rebate provision for importing certain cold-rolled and painted steel.
Correction Notice R.4267 with retrospective effect from 1 January 2024, involving the deletion and substitution of various tariff subheadings.
Amendment to Part 1 of Schedule No. 2 by imposing anti-dumping duties on windscreens for vehicles from China.
Amendment to Part 1 of Schedule No. 1, providing technical amendments by inserting new 8-digit tariff subheadings. Effective from 1 January 2024 (retrospective).
Amendment to Part 1F of Schedule No. 6, substituting Note 1 to remove the reference to rebate item 623.01. Effective from 1 January 2024 (retrospective).
Amendment to Part 1 of Schedule No. 1, inserting tariff subheadings 2009.89.55 and 2009.90.15 for nut juices. Effective from 1 January 2022 (retrospective).
Amendment to Part 2 of Schedule No. 4 creates temporary rebate provisions for optic fibre cables, electrical apparatus, and submarine optical fibre cable infrastructure connections.
Amendment of Appendix II to Annex 1 of the SADC Protocol on Trade to substitute the 12-block SADC Certificate of Origin template with the 13-block template.

SARS Notices and more detail on the amendments can be found here.

Staying informed and proactive is key to navigating these changes seamlessly and ensuring compliance in the year ahead.

Article Ads below

Featured

Staff Writer