2016 TAX SEASON
INCOME FROM 1 MARCH 2015 UP TO 29 FEBRUARY 2016
1. WHO IS REQUIRED TO SUBMIT AN INCOME TAX RETURN TO SARS
1.1 All individuals whose income from ONE employer is greater than R350 000 for the next year.
1.2 All individuals whose income is less than R350 000 if:
• Their source of income is from more than one employer
• They receive a car allowance
• They have other sources of income (rent, interest etc)
• They have deductions they want to claim (e.g. medical expenses, retirement annuity contributions)
• They have local capital gains/losses.
1.3 Note this list is not exhaustive and we should be contacted should you need clarity.
2. WHAT SUPPORTING DOCUMENTS DO YOU NEED IN ORDER TO COMPLETE YOUR TAX RETURN?
2.1 Your banking details
2.2 Your IRP5/IT3(a) certificate(s)
2.3 Certificates that you received in respect of any investment income IT3(b)
2.4 Details of medical expenses paid by you and not covered by your medical scheme
2.5 Certificate of contributions to medical aid
2.6 Completed confirmation of a diagnosis of disability form. (Please contact us if you do have any uncertainties)
2.7 Information relating to retirement annuity contributions.
2.8 Details of business travel (if you received a travel allowance or want to claim against a fringe benefit for an employer-provided vehicle)
2.9 Information relating to foreign tax credits withheld
2.10 Financial statements, if applicable e.g. business income
2.11 Any other relevant material relating to income you received or deductions you want to claim.
3. WHAT ARE THE CONSEQUENCES OF NOT SUBMITTING YOUR INCOME TAX RETURN BY THE SARS DEADLINE?
SARS will levy non-compliance penalty for each month that your return is outstanding. Penalties can range from R250 to R16 000 per month. SARS may appoint your bank or employer as an agent to deduct the outstanding penalties from your salary or bank account.
4. WHAT INCOME TAX RATES ARE APPLICABLE FOR THE 2015/2016 TAX YEAR
For individuals and special trusts:
|Taxable income (R)||Rate of Tax (R)|
|NIL – 181 900||18% of taxable income|
|181 901 – 284 100||32 742+26% of taxable income above 181 900|
|284 101 – 393 200||59 314 +31% of taxable income above 284 100|
|393 201 – 550 100||93 135 + 36% of taxable income above 393 200|
|550 101 – 701 300||149 619 + 39% of taxable income above 550 100|
|701 301 and above||208 587 +41% of taxable income above 701 300|
|Type||Rate of Tax (R)|
For small business corporations:
|Taxable income (R)||Rate of Tax (R)|
|NIL – 73 650||0% of taxable income|
|73 651 – 365 000||7% of taxable income above 73 650|
|365 001 -550 000||20 395 + 21% of taxable income above 365 000|
|550 100||59 245 +28% of taxable income above 550 000|
Trusts other than special trusts:
|Type||Rate of Tax|
|Trusts other than special trusts||41%|
5. TAXATION OF CAPITAL GAINS
Capital gains, on the disposal of assets that were held with a capital intention, are included in taxable income. Events that usually trigger a disposal include a donation, exchange, loss, death or emigration.
The following are some of the specific exclusions:
5.1 R2 million gain/loss on the disposal of a primary residence
5.2 Most personal use assets
5.3 Retirement benefits
5.4 Payments in respect of original long-term insurance policies
5.5 Annual exclusion of R30 000 capital gain or capital loss is granted to individuals and special trusts
5.6 Small business exclusion of capital gains for individuals (at least 55 years of age) of R1.8 million when a small business with a market value not exceeding R 10 million is disposed of.
5.7 The exclusion granted to individuals is R300 000 for the year of death, instead of the annual exclusion.
BELOW ARE THE TAX RATES APPLICABLE TO CAPITAL GAINS OR LOSSES FOR THE 2015/2016 TAX YEAR.
|PERSON||INCLUSION RATE(%)||STATUTORY RATES (%)||EFFECTIVE RATE OF TAX (%)|
|Individual & special trusts||33.3||0-41||0-13.65|
6. WHAT ARE THE INTEREST EXEMPTIONS AVAILABLE TO INDIVIDUALS
6.1 Age 64 and below R 23 800
6.2 Age 65 and above R 34 500
7. WHAT ARE THE TAXABLE INCOME THRESHOLDS FOR INDIVIDUALS?
7.1 Age 64 and below R 73 650
7.2 Age 65 and below 75 R114 800
7.3 Age 75 and over R128 500
8. WHAT REBATES ARE AVAILABLE FOR INDIVIDUALS
8.1 Primary rebate R 13 257
8.2 Secondary rebate – Age 65 and below 75 R 7 407
8.3 Third rebate – Age 75 and over R 2 466
9. CAN I OBJECT AGAINST AN ASSESSMENT?
9.1 Yes, if the assessment is normally not older than three years.
9.2 Do SARS do refunds after a revised assessment? Our firm have done several objections on behalf of clients and some of the biggest refunds were the following:
9.2.1 Mr A R 415 546 and R285 382
9.2.2 Mr B R 133 572
9.2.3 Mr C R 68 150