SARS Snapshot: Key Highlights for February 2024
Welcome to our February 2024 edition of "SARS Snapshot," your go-to roundup for the latest and significant updates. This month, we're spotlighting essential SARS General Matters, including trade testing dates, a crucial scam alert, legal actions against SASFIN, and the extension of Commissioner Kieswetter's term. Learn about trade statistics revelations, explore updated Tax Directive Guides, and navigate through the intricacies of the AfCFTA Agreement. Plus, don't miss out on vital updates on customs and excise news, including tariff amendments and the implementation of the MLI.
Stay informed, stay ahead with CIBA.
SARS GENERAL MATTERS
1. Trade testing dates and software implementation: Tax Directives
SARS will introduce enhancements to the Tax Directives process. The Tax Directives Interface Specification should be consulted before testing. To initiate test file submissions, first, email 10 active taxpayer reference numbers to ncts@sars.gov.za with the subject "Tax reference numbers for Trade Testing." Only up to 10 numbers are permitted. Afterwards, await email confirmation to begin testing.
2. Scam alert
A new scam is doing rounds on eFiling Income Tax assessment and tax compliance obligations. Do not open the link and delete the email immediately.
Check out the example of the scam as published here. For updates visit SARS’s Scams & Phishing webpage.
3. SARS confirms legal action against SASFIN
In a Media Release SARS confirmed that it is taking legal action against Sasfin Holdings Ltd. As per SARS, it has conducted a thorough investigation into various South African taxpayers who had not made true and accurate tax disclosures to SARS. The investigation revealed that the taxpayers had colluded to expatriate funds offshore in a manner that obscured tracing the expatriated payments and jeopardised the recovery of tax in South Africa.
4. Commissioner Kieswetter’s term extended
SARS announced that the President has requested Commissioner Edward Kieswetter to extend his term beyond the initial expiry date of 30 April 2024. Both parties have agreed to a two-year extension. This move aims to further SARS's strategic transformation initiated in 2019, enhancing its role as a credible tax authority and supporting South Africa's social and economic development. Kieswetter emphasised the ongoing commitment to building a modern, integrity-driven SARS, focusing on leadership development and a seamless transition in the coming years.
5. Trade Statistics
In 2023, South Africa reported a trade surplus of R62.2 billion, with total trade reaching R4.02 trillion. However, SARS's January 2024 trade statistics reveal a preliminary deficit of R9.4 billion, due to increased exports and decreased imports compared to January 2023. This deficit is marking an improvement from the previous year's R24.4 billion deficit for the same period. Furthermore, the final trade surplus for December 2023 was adjusted from R14.1 billion to R15.6 billion, reflecting ongoing corrections. See the full media release here.
NEW AND UPDATED GUIDES
6. Updated Tax Directive Guides
The tax directive guides have been updated to include the following changes:
The new fields added on the IRP3(s) form to allow for the taxation of local and foreign income for South African citizens who have worked both locally and overseas who do not qualify for exemption under s10(i)(o)(ii). See the Completion Guide for IRP3(a) and IRP3(s) Forms.
The new fund types added to the ROT01 form are Unclaimed Pension Preservation Fund and Unclaimed Provident Preservation Fund. See the Guide to Complete Submit and Cancel a Recognition of Transfer.
7. Failure to deduct or withhold employees tax
The Draft Interpretation Note explains the employees’ tax obligations of an employer and the income tax obligations of an employee when an employer incurs personal liability for failing to deduct or withhold employees’ tax.
The due date for comments is 15 March 2024. Send your comments to policycomments@sars.gov.za.
8. Employee allowances 2025 - Income Tax Notices and updated external guides
SARS issued the following income tax notices on 1 March 2024:
Notice 4456 (GG 50243): Establishes the rate per kilometer for motor vehicle expenses under section 8(1)(b)(ii) and (iii), aiding taxpayers in calculating travel deductions.
Notice 4458 (GG 50243): Determines the daily amount for meals and incidental costs related to overnight allowances under section 8(1)(c)(ii), guiding taxpayers on allowable deductions for travel expenses.
Notice 4457 (GG 50243): Sets the daily amount for meals and incidental costs for daily allowances under section 8(1)(a)(ii), providing clarity on permissible expense claims for taxpayers.
The external guides and annexures have also been updated:
PAYE-GEN-01-G03 – Guide for Employers in respect of Allowances – External Guide
PAYE-GEN-01-G03-A01 – Rate per Kilometre Schedule – External Annexure
PAYE-GEN-01-G03-A02 – Subsistence Allowance Foreign Travel – External Annexure
9. Travel ELogbooks for 2024 and 2025
Find the latest logbooks for next year was added on the Travel eLogbook webpage:
2024-25 SARS eLogbook for the 1 March 2024 – 28 February 2025 assessment year and filing season starting 1 Jul 2025
2023-24 SARS eLogbook for the 1 March 2023 – 29 February 2024 assessment year and filing season starting 1 Jul 2024
10. Updated Securities Tax Guide
The Securities Transfer Tax (STT) guide is updated with an email address and the REV16 (Request for refund) form:
SARS Legal
11. High-Court Judgement- Reviewing and setting aside Personal Liability of taxpayer
The court ruled in favour of the taxpayer, finding that SARS's actions to hold her personally liable for the tax debt of R21.5 million related to Impulse International (Pty) Ltd were unlawful. These ruling underscores the importance of due process and the limits of personal liability in tax debt collection, highlighting the need for SARS to adhere strictly to legal protocols when pursuing tax debts, especially in cases involving third parties. This outcome is significant for taxpayers, emphasising legal protections against arbitrary tax collection practices.
Read more on the case here: https://www.sars.gov.za/wp-content/uploads/Legal/Judgments/HC/Legal-DRJ-HC-2024-05-Pather-v-CSARS-52782-21-2024-ZAGPJHC-87-6-February-2024.pdf
CUSTOMS AND EXCISE NEWS
12. Multilateral Instrument (MLI) synthesised texts:
South Africa is part of an international effort to prevent tax avoidance by companies, using an agreement called the MLI. To make understanding this agreement easier, South Africa created "synthesised texts" which merge the changes from the MLI into existing tax treaties in a clear way. These texts, which are essentially consolidated versions of the Covered Tax Agreements as modified by the MLI, are aimed at facilitating the understanding of the application of the MLI to a particular tax treaty. However, these texts are for guidance only and don't replace the original legal documents. South Africa officially agreed to follow the MLI from January 1, 2023, as per its legal procedures.
Find the synthesised texts for different countries at the SARS website here. https://www.sars.gov.za/legal-counsel/international-treaties-agreements/double-taxation-agreements-protocols/multilateral-instrument-mli/
13. Updated facility codes in Box 30
Updated facility codes used in Box 30 on the Customs Clearance Declaration (CCD) are as follows:
Inserting new container depot in Durban, Dachser South Africa Pty Ltd
Deleting Bidfreight Port Operations (Pty) Ltd in Durban.
14. Tariff amendments published
SARS published various tariff amendments, which are effective from 1 March 2024:
R.4441 (GG 50203): Amendments in Schedule No. 1 for canned minced anchovies. New tariff subheadings 1604.20.31, 1604.20.39, and 1604.20.45 are inserted to reduce the general rate of customs duty on canned minced anchovies from 25% to a specific duty of 6c/kg.
R.4440 (GG 50203): Introduction of a temporary rebate provision for tall oil fatty acids under Schedule No. 4, with the insertion of rebate item 460.06/3823.13/01.06, classifiable under tariff subheading 3823.13.
R.4442 (GG 50203): Adjustments in Schedule No. 4 for the importation of meat and edible offal of Gallus Domesticus. Rebate item 460.03/0207.14.1/01.07 is substituted to change the rebate from “Full duty less 30%” to “Full duty less 12%”, effective retrospectively from 26 January 2024.
R.4439 (GG 50203): A similar adjustment in Schedule No. 4 for Gallus Domesticus, substituting rebate item 460.03/0207.14.9/01.07 to increase the rebate from “Full duty less 25%” to “full duty less 37%”.
R.4303 (GG 50065): Amendment to Part 1 of Schedule No. 2, by the inserting and amending exporters. Provisions are applicable from 2 February 2024, except for the insertion of the exporter name “Cooper (Kunshan) Tire Co. Ltd, which would be with retrospective effect from 28 July 2023.
R.4372 and R.4373 (GG 50129): Amendments to Schedule No. 1 for the revised Tariff Rate Quotas under the SADC-EU EPA for 2023 and re-allocations for 2022, effective retrospectively from 1 January 2023 and from 1 September 2022 to 31 December 2022, respectively.
R.4370 (GG 50129): Amendment to Part 1 of Schedule No. 2 to impose anti-dumping duties on imports of certain flat-rolled steel products from China, as detailed in ITAC Report 720.
R.4371 (GG 50129): Amendment to Part 1 of Schedule No. 3 to create a rebate provision for customs duty on synthetic rubber used in tire manufacturing, under tariff subheading 4002.19.90.
15. Implementation of the African Continental Free Trade Area (AfCFTA) Agreement
The African Continental Free Trade Agreement (AfCFTA) provides for a free-trade area including tariff reduction commitments with the following countries legible to trade with South Africa: Algeria, Cameroon, Egypt, Ghana, Kenya, Rwanda, and Tunisia. It should be noted that trading with the SADC countries takes place under the SADC Trade Protocol.
Traders must register with SARS as exporters or producers. To find out more contact the registration team via email here: RLARegistrations@sars.gov.za.
Forms and relevant information regarding registration to trade under the AfCFTA can be found here.
Read more about the AfCFTA on the SARS website here.
16. Draft amendments for comment: Transfer of ownership of warehoused goods
The proposed Amendments to rules under sections 26 and 120 on the transfer of ownership of warehoused goods provide that the SAD 500 or SAD 505 forms be regarded as an application for permission for the transfer of ownership of dutiable goods in a customs and excise warehouse.
The due date for comment is 29 March 2024. Comments are to be recorded on the Customs & Excise Rule Amendments Comment Sheet.
17. Revised guide on the Declaration and Return Submission through eFiling
The new Declaration and Return Submission through eFiling guide provides a revised process as follows:
Removing references to specific Excise products and apply them to all products
Relevant processes have been revised to reflect current eFiling system functionalities
The process for capturing all Excise duties and levies has been updated
The document has been converted from a manual to a guide and the document Q-Code was changed from SE-ACC-02-M02 to SE-ACC-08
18. Health Promotion Levy on Sugary Beverages
The Health Promotion Levy on Sugary Beverages external policy has been revised to align with the relevant sections of the Act.
19. Revised Biodiesel External policy
The Biodiesel external policy has been revised as follows:
To align with the relevant sections of the Act.
The biodiesel process flow and the process for reprocessing, destruction and abandonment have been deleted from the external policy.
Robbery and theft have been included as exclusionary items under Vis Major losses.
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