Websites

Check out these websites:
www.thatfred.com
www.fredchannel.blogspot.com

Websites

Check out these websites:
http://www.glambury.com/
http://www.glambury.blogspot.com/

EMP 201 Returns

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Introduction of a simplified EMP201 Adobe form and process

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The EMP201 has been enhanced to show the allocation of payment. Where previously the form was a payment and liability

declaration, it will now be the payment declaration in which the employer declares the total payment together with the

allocations for PAYE, SDL and UIF respectively. In the case of NIL declarations, a declaration must be made to SARS reflecting

the nil amounts. A unique Payment Reference Number will be pre-populated onto the EMP201 form, and will be used to link

the actual payment with the payment allocation.

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The EMP201 form will enable an employer to adjust a previously submitted declaration or reallocate credits, whether it

is for the current period or prior period, for PAYE, SDL and/or UIF. The new form and processing thereof will be possible

through e@syFile™ Employer, e@syFile™ Tax Practitioner, eFiling or engagement with SARS (at a branch office or via post).

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The payment profile on eFiling will be segregated, allowing employers to allocate different roles to different users. These users

can then capture declarations, submit and finalise payment.

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The new EMP201 solution allows SARS to introduce a clearing account for employers

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This will enable SARS to provide the employer with a consolidated view of all employer taxes. On receipt payments will be stored

in the employer’s clearing account. The EMP201 will then specify the automatic allocation of the payment from the clearing

account to PAYE, SDL and UIF.

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Any under- or over-payment is readily identified, and the employer automatically notified. This will provide employers with the

capability to correct an allocation or process a missing allocation. It also encourages employers to be more accountable for the

accuracy of their accounts, thereby removing bottlenecks in the correction process.

THE EMPLOYER MONTHLY DECLARATION (EMP201)

THE EMPLOYER MONTHLY DECLARATION (EMP201)

5.1. INTRODUCTION

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The manual EMP201 will be available from all SARS branches.

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The EMP201 for electronic completion and submission will be available on www.sarsefiling.co.za or on e@syFile™ Employer which

can be downloaded from the eFiling website free of charge. Employers are required to submit the EMP201 declaration on a monthly

basis, and make payment, on or before the 7th of the following month.

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Employers must declare their PAYE, SDL and UIF allocations on the EMP201 form.

5.2. COMPLETING THE EMP201 FORM

STEP 1

The Employer Details section comprises of:

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Trading or Other Name – The employer’s trading name.

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Reference Numbers – The reference numbers for the tax types that you were or are registered for, for the relevant year.

STEP 2

In the Particulars of Declarant section, the employer will be required to fill in the following details regarding

the declarant:

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First Name – The declarant’s first name.

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Surname – The declarant’s surname.

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Initials – The declarant’s initials.

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Position held at business – The declarant’s position within the business (employer).

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ID No. – The business ID number.

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Date of Birth – The declarant’s date of birth.

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Email Address – The declarant’s email address.

• Bus Tel No. – The declarant’s business telephone number.

THE NEW EMP201 DECLARATION PROCESS

UNDERSTANDING THE NEW EMP201 DECLARATION PROCESS

Employers will no longer be required to complete both a payment liability and a payment declaration on an EMP201 form. The new

EMP201 is an employer payment declaration that requires employers to indicate the total payment made and give a breakdown of PAYE,

SDL and UIF payment allocations. In the case of NIL declarations, a declaration must be made to SARS reflecting the nil amounts.

These payment allocation amounts will then be recorded as the employer’s provisional liability for each tax type for the period concerned.

Your EMP501 reconciliation at the end of the financial tax year will provide the actual liability.

This means that employers will only make one payment as opposed to three separate payments for PAYE, SDL and UIF. The EMP201 form

will therefore be used for a single period to declare how that payment must be allocated for each tax type.

The Payment Reference Number, a new field on the EMP201 form, links the actual payment and the relevant EMP201 payment declaration.

On request, SARS will issue a pre-populated EMP201 form each time an employer wants to make a payment for PAYE, SDL and/or UIF.

This form will contain the unique Payment Reference Number.

Importantly, employers will also be able to make adjustments on the EMP201 form for a previously submitted declaration. A declaration

for the current period, or a prior period, can now be adjusted by increasing or decreasing a prior declaration for PAYE, SDL and UIF to

reflect the correct amount.

Other Tax

Service Code

Raising an issue with SARS can seem difficult or intimidating but we want to make it as easy as possible for you to get things put right.

• We will deal with you in a friendly and professional way.

• We will treat the issue that you raise seriously.

• We won’t treat you differently from other people just because you have raised an issue.

• We will acknowledge the issue you have raised, give you the name of the person dealing with it and let you know when you can expect a reply.

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The Final Result

When things go wrong we don’t want to put you to extra time and expense and will do our best to sort things out quickly and fairly. So where we have made a mistake we will:

• Apologise

• Explain what went wrong and why

• Correct the mistake so that, where possible, your affairs will be in the same position as if we hadn’t made the mistake, and

• Learn from our experience.

Dispute Resolution

Dispute Resolution

If you believe that the assessment, decision, or determination you have received is incorrect, dispute resolution processes are available in terms of the legislation that SARS administers.

Income Tax, Value-Added Tax, and Other Taxes

Where the assessment you have received differs from the return you have submitted, you will usually have been informed of the adjustment that has been made and the reason for the adjustment. If you have not been given this information you are entitled to request it from us.

If the difference between the assessment you have received and the return you have submitted is the result of an adjustment by SARS, a formal dispute resolution process exists to ensure that the adjustment has been correctly made. As part of the process of reducing the costs associated with dispute resolution, the formal dispute resolution process has been supplemented by an alternative dispute resolution process.

Where the difference is clearly the result of an administrative error, the formal dispute resolution process need not be followed. You may, however, still find it useful to record your details and the nature of the error in writing. This reduces the likelihood of misunderstanding and provides a document that may be referred to in future if the error is not corrected or only partially corrected.

2.1 Request for Reasons or Objection
The dispute resolution process commences either when you request reasons for an adjustment or when you lodge an objection to the assessment or decision that you have received. SARS must receive the request or objection within 30 business days of the date of the assessment or decision. In the case of an income tax assessment this date is defined as the due date reflected on the assessment.

Income Tax (Excluding Personal Income Tax- Individuals), VAT, Pay-As-You-Earn, and other tax types
The objection must be in writing on an ADR1 form - ADR1 - Notice of Objection for Companies, Trust and Other Taxes and signed by the representative taxpayer in the case of a company, trust, etc. This form cannot be submitted through eFiling.

Personal Income Tax (only pertaining to individuals)
Where the dispute concerns an individual who wants to lodge an objection relating to Personal Income Tax, the individual must follow the process above using the Notice of Objection (NOO) form. To obtain a copy of the NOO form, please call our Contact Centre, visit the SARS branch nearest you or access the forms on your eFiling profile. Please note: the NOO form for individuals can unfortunately not be downloaded from this website.

2.2 Appeal
Where your objection has been disallowed in full or in part, you may note an appeal against the decision within 30 business days of its date. The matter will be referred to alternative dispute resolution if you have requested this and the Commissioner agrees.
If the alternative dispute resolution process fails and the amount of tax in dispute is R500 000 or less, the dispute may be referred to a tax board. The procedures before the board are relatively informal. You will represent yourself before the board and SARS will usually be represented by a staff member from the local branch office. If the amount of tax in dispute is greater than R500 000 or the principle at stake justifies this step, the matter will be referred to a tax court. The procedures before the court are formal and SARS will usually be represented by an advocate.

Income Tax (Excluding Personal Income Tax- Individuals), VAT, Pay-As-You-Earn, and other tax types
The appeal must be in writing on an ADR2 form - ADR2 - Notice of Appeals for Companies, Trust and Other Taxes. This form cannot be submitted through eFiling.

Personal Income Tax (only pertaining to individuals)
The appeal must be writing on a Notice of Appeal (NOA) form. To obtain a copy of the NOA form, please call our Contact Centre, visit the SARS branch nearest you or access the forms on your eFiling profile. Please note: the NOA form for individuals can unfortunately not be downloaded from this website.

A guide for tax dispute resolution is available for more information.

SARS Service Issues

Putting Things Right

1. The first mechanism is aimed at the kinds of issues covered in the first two bullets above, which can generally be referred to as service issues.

2. The second mechanism is aimed at the issues covered in the third and forth bullets above, which will usually have an impact on the amount of tax or duty you are liable for.

The two mechanisms are discussed in more detail below.

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1. Service Issues

Where you have a service issue we have provided a procedure to resolve it that is straightforward and easy to use. If you wish to raise a service issue, we recommend that you follow the steps below.

Step One

You can raise your issue in writing, by phone or fax, or by visiting your local Taxpayer Service Centre/Branch Office. We will try to resolve the issue as quickly as possible so as to avoid adding to the inconvenience we may have already caused you.

Step Two

If all avenues of communication have failed to solve your issue at Step One, contact your local Call Centre and request the Call Centre Agent to assist. If the problem can not be solved, the Call Centre Agent will register your complaint and provide you with a service request number. Your complaint will then be escalated to a Consultant/Manager to assist you.

Step Three

If you have received no joy within a reasonable time at Step Two, you can ask the SARS Service Monitoring Office (SSMO) to look into the matter. The SARS Service Monitoring Office is a fair and unbiased Office that will facilitate the resolution of the issue you have raised.

Integral to the duty of every SARS employee, is to provide an excellent and efficient service to all taxpayers.


To determine whether we live up to our promise of efficient service delivery, the SARS Service Monitoring Office (SSMO) was launched in October 2002. This office provides a channel for taxpayers to highlight areas where they do not receive the service they deserve.

The SARS Service Monitoring Office (SSMO), is a special office operating independently of SARS branch offices. It facilitates the resolution of service issues that have not been resolved by SARS branch offices through the normal channels. The office reports directly to the Commissioner and provides regular reports to the Minister of Finance.

Other about Tax

2. Deduct exempt income

“Gross income” minus the exemptions set out in Section 10 is equal to “income”. A taxpayer's "income" is therefore calculated by deducting from the taxpayer’s gross income all amounts that are exempt from tax.

3. Deduct allowable deductions

The next step is to subtract certain allowable deductions from "income", then add taxable gains and then subtract the other deductions, which leaves "taxable income".

Deductions include:

• general deductions that qualify in terms of the general deductions formula contained in Sections 11(a ) and 23(f) and (g);
• specific deductions contained in Sections 11(c) to (x);
• allowances and other special deductions and rulings contained in Sections 11bis to 24L.

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4. Multiply 'taxable income' by tax rate

Once taxable income has been determined, the applicable tax rate is applied to determine tax liability. Individuals are considered "persons other than companies" and are taxed on a sliding scale.

5. Subtract rebates

The taxable income multiplied by the tax rate will leave a certain amount, from which must be subtracted:

• rebates for natural persons set out in Section 6; and
• any applicable rebates for foreign taxes allowed by double-taxation agreements.

Calculating Income Tax

What are the steps in calculating the income tax owed?

The Income Tax Act No. 58 of 1962 sets out a series of steps to be followed in calculating a taxpayer’s "taxable income". This then forms the foundation on which tax liability is calculated. These steps are briefly set out below and are tackled in greater detail in the explanations that follow.

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1. Determine gross income

First determine your total receipts and accruals, or total income. These concepts are not contained in the Act, but they are implied by the wording of the definition of “gross income” in Section 1 of the Income Tax Act.

Deduct from "total income" those amounts that are excluded from the ambit of the definition of “gross income”. In other words, exclude accruals or receipts:

• that are from a source outside South Africa for non-residents; or
• that is of a capital nature.

Gross income of residents
For any person who is a resident, gross income is the total amount of worldwide income, in cash or otherwise, received by or accrued to or in favour of that person.

Gross income of non-residents
For any person who is not a resident, gross income is the total amount of income, in cash or otherwise, received by or accrued to or in favour of that person from a source within or deemed to be within South Africa during the year of assessment.

Capital receipts and accruals
Receipts or accruals of a capital nature are generally excluded from gross income as the Eighth Schedule covers these as capital gains and losses.

However, certain other receipts and accruals are specifically included in gross income, regardless of their nature. A taxpayer needs to include in gross income:

• the general inclusions in terms of the general definition of “gross income” as contained in Section 1;
• the specific inclusions in terms of paragraphs (a) to (n) of the definition of “gross income” in Section 1; and
• deemed accruals (contained in Section 7), deemed interest (in Section 8E) and the accruals or receipts deemed to be from a source in South Africa (in Sections 9 and 9D).

What is PAYE

What are SITE, PAYE and provisional tax?

The final income tax payable by a taxpayer can only be calculated once the total taxable income earned by the individual for the full year of assessment has been determined. This is normally only done after the end of the year of assessment, once a taxpayer’s income tax return has been processed and an assessment is issued.

However, it would be impractical to expect taxpayers to pay tax as a large lump sum once a year. As a result, the Income Tax Act has created three mechanisms to solve this problem: SITE, PAYE, and provisional tax. In this way, income tax is collected as soon as the taxpayer has earned the income and is offset against the final income tax that is due on assessment.

Employees' tax

SITE and PAYE are the two elements of employee’s tax. Employees’ tax is the tax that employers must deduct from the employment income of employees – such as salaries, wages and bonuses - and pay over to SARS monthly. It is withheld daily, weekly, or monthly, when these amounts are paid or become payable to the employees.

An employer must issue an employee with a receipt known as an employees’ tax certificate (an IRP5/IT3(a)) if SITE or PAYE have been deducted. This discloses the total employment income earned for the year of assessment and the total SITE and/or PAYE deducted and paid to SARS.

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Standard Income Tax on Employees

Standard Income Tax on Employees, or SITE, is not a separate tax. It is merely a method that means employees who earn less than a certain amount pay income tax as a full and finial liability on the information to the specific employer. SITE generally applies to individuals:

• whose net remuneration does not exceed R120 000 annually;
• who do not receive a traveling allowance; and
• who do not receive any other income.

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Pay-As-You-Earn

Pay-As-You-Earn, or PAYE, ensure that an employee’s income tax liability is settled in a continuing fashion, at the same time that the income is earned. The advantage of this is that the tax liability for the year is settled over the course of the whole year of assessment. Refer to the PAYE page for more information.

Provisional tax

Provisional tax allows taxpayers to provide for their final tax liability by paying two amounts in the course of the year of assessment. But the final liability is determined upon assessment.

Provisional tax payments - which are made six months after the beginning of a year of assessment, as well as at the end of it - represent tax on anticipated income. Provisional tax estimates and payments are made on IRP6 forms.

Who needs to register

Who needs to register for income tax?

The Minister announced “as from September this year SARS will require all those receiving any form of employment income – including those below the tax threshold – to be registered with SARS to help reduce the scope for non-compliance.

Who needs to submit a completed and signed income tax return to SARS?

Where taxpayers receive remuneration less than R120 000, taxpayers may elect not to submit an income tax return, provided the following criteria are met:

• Remuneration is from a single employer;
• Remuneration is for a full year of assessment (1 March – 28/29 February); and
• No allowance was paid, from which PAYE was not deducted in full with regards to travel allowance.

About Income Tax

What is income tax?

Income tax is a tax levied on all income and profit received by a taxpayer (which includes individuals, companies and trusts). It is the national government’s main source of income and is imposed by the Income Tax Act No. 58 of 1962.

The form of tax that people generally associate with the concept of income tax is "normal" income tax. But the Income Tax Act is also the source of a number of other taxes that, although they have their own particular names, still form part of the income tax system. A few examples of taxes which may affect taxpayers are capital gains tax and donations tax. The Act also establishes a few methods of paying income tax - namely SITE, PAYE and provisional tax.

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How is income tax collected?

The year of assessment

The year of assessment for taxpayers covers a period of 12 months. For individuals and trusts, the commencement date of the year of assessment starts on 1 March and ends on the 28/29 February each year. For Companies and Close Corporations the year of assessment is the applicable financial year.

Income tax returns are available annually after the end of each year of assessment to registered taxpayers, and must be completed and submitted to SARS each year.

The “Tax Season” commences 1 July each year, and the deadlines for the submission of returns are:

• Individual (ITR12) and Trust (IT12TR) returns (non-provisional taxpayers): Last working day of September for postal submission (the paper version) that can be posted or submitted at your local SARS branch in the designated drop box; or
• The last working day in November for eFiling via your PC or laptop or done electronically by a SARS consultant at a SARS branch. Please note that for the 2009/2010 year of assessment, SARS has announced the 26th November 2010 as the deadline for electronic submissions of Income Tax Returns.
• Individual (ITR12) and Trust (IT12TR) returns (provisional taxpayers): Provisional taxpayers have until the 31 January 2011 to submit their completed ITR12 income return to SARS.
• Company/CC (IT14) returns: Must be completed and submitted within 12 months after the financial year end of the company/close corporation.

The assessment by SARS

From the information furnished in the income tax return, SARS will issue an assessment showing either tax due or refundable, if applicable.

For more on income tax procedure see: registering; directives; extensions; returns; assessments; objections; appeals; alternative dispute resolution; paying SARS; and interest, penalties and fines, available under All Publications or our latest Tax Season 2010 page.