SARS Comprehensive Guide to ITR12 Income Tax Return for Individuals PDF
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Uploaded by JubilantConnemara6630
2024
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Summary
This document provides a comprehensive guide for completing the ITR12 income tax return for individuals in South Africa. It covers various aspects including important dates, required documentation, automatic assessment, specific income types, and tax credits. The guide is quite detailed and focuses on helping individuals accurately complete their income tax return.
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Effective Date: 24 June 2024 FILING SARS External Guide COMPREHENSIVE GUIDE TO THE ITR12 INCOME TAX RETURN FOR INDIVIDUALS COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page...
Effective Date: 24 June 2024 FILING SARS External Guide COMPREHENSIVE GUIDE TO THE ITR12 INCOME TAX RETURN FOR INDIVIDUALS COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 1 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 TABLE OF CONTENTS 1 SUMMARY................................................................................................................................................. 8 2 GENERAL INFORMATION....................................................................................................................... 8 2.1 WHEN MUST THE RETURN BE SUBMITTED?........................................................................... 8 2.2 WHO IS NOT REQUIRED TO SUBMIT A RETURN?.................................................................... 8 2.3 HOW TO REQUEST AND SUBMIT A RETURN?......................................................................... 9 2.4 DOCUMENTATION REQUIRED TO COMPLETE YOUR RETURN............................................. 9 2.5 AUTOMATIC ASSESSMENT (AUTO ASSESSMENT)............................................................... 10 2.5.1 AGREE WITH AUTO-ASSESSEMENT....................................................................... 10 2.5.2 DISAGREE WITH AUTO-ASSESSEMENT................................................................. 11 2.5.3 REQUEST FOR EXTENSION..................................................................................... 11 2.5.4 THIRD PARTY DATA RECEIVED AFTER ASSESSMENT ISSUED.......................... 11 2.6 MARRIAGE IN COMMUNITY OF PROPERTY........................................................................... 11 2.6.1 SPOUSAL ASSESSMENT.......................................................................................... 12 2.7 REVISED ESTIMATED ASSESSMENT..................................................................................... 13 2.8 RESIDENCE BASIS OF TAXATION........................................................................................... 13 2.9 UTILISING THE SERVICES OF A TAX PRACTITIONER........................................................... 14 2.10 SITE TAXPAYERS...................................................................................................................... 14 2.11 REMUNERATION OF EMPLOYEES WORKING FOR FOREIGN GOVERNMENTS IN SOUTH AFRICA 15 2.12 INSOLVENCY............................................................................................................................. 15 2.13 RETURNS FOR FUTURE YEARS OF ASSESSMENT............................................................... 16 2.14 RETURNS FOR OLD YEARS OF ASSESSMENT...................................................................... 17 3 INFORMATION TO CREATE YOUR PERSONAL INCOME TAX RETURN (FORM WIZARD)............ 17 3.1 STANDARD QUESTIONS.......................................................................................................... 17 3.1.1 PERSON MAKING THE DECLARATION................................................................... 17 3.1.2 RESIDENCY................................................................................................................ 17 3.1.3 EMPLOYMENT STATUS............................................................................................ 18 3.1.4 INCOME RECEIVED REFLECTED ON AN IRP5/IT3(a) EMPLOYEE TAX CERTIFICATE............................................................................................................. 19 3.1.5 INVESTMENT INCOME.............................................................................................. 21 3.1.6 RENTAL INCOME....................................................................................................... 21 3.1.7 DIRECTOR OR MEMBER OF A CLOSE CORPORATION........................................ 22 3.1.8 VOLUNTARY DISCLOSURE PROGRAMME............................................................. 22 3.1.9 ASSETS....................................................................................................................... 22 3.1.10 DONATIONS................................................................................................................ 22 3.1.11 SOLAR ENERGY TAX CREDIT.................................................................................. 22 3.1.12 OTHER INCOME AND ALLOWABLE EXPENSES..................................................... 22 3.2 COMPREHENSIVE QUESTIONS............................................................................................... 23 3.2.1 FOREIGN INCOME..................................................................................................... 23 3.2.2 CAPITAL GAIN / LOSS............................................................................................... 23 3.2.3 PARTNERSHIPS......................................................................................................... 23 3.2.4 LOCAL BUSINESS TRADE AND PROFESSIONAL INCOME (INCLUDING CRYPTO ASSETS(S))................................................................................................................. 24 3.2.5 LOCAL FARMING....................................................................................................... 24 3.2.6 OTHER TAXABLE RECEIPTS AND ACCRUALS....................................................... 24 3.2.7 FOREIGN TAX CREDITS............................................................................................ 24 COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 2 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 3.2.8 AMOUNTS CONSIDERED NON-TAXABLE............................................................... 25 3.2.9 MEDICAL DEDUCTIONS............................................................................................ 25 3.2.10 RETIREMENT AND/OR INCOME PROTECTION CONTRIBUTIONS OR RETIREMENT CONTRIBUTIONS.............................................................................. 25 3.2.11 VENTURE CAPITAL COMPANY INVESTMENTS...................................................... 25 3.2.12 OTHER DEDUCTIONS............................................................................................... 26 4 COMPLETING THE RETURN................................................................................................................. 26 4.1 TAXPAYER INFORMATION....................................................................................................... 26 4.2 DECLARATION AND SIGNATURE............................................................................................ 27 4.3 BANK ACCOUNT DETAILS........................................................................................................ 28 4.3.1 BANK DETAIL FIELDS ON THE RETURN................................................................. 28 4.3.2 DOCUMENTATION REQUIRED FOR BANK DETAIL CHANGES............................. 29 4.3.3 PROOF OF RESIDENTIAL ADDRESS....................................................................... 29 4.4 EMPLOYEE’S TAX CERTIFICATE INFORMATION [IRP5/IT3(A)]............................................. 30 4.4.1 INCOME RECEIVED SECTION ON THE EMPLOYEE’S TAX CERTIFICATE.......... 31 4.4.2 DEDUCTIONS/CONTRIBUTIONS/INFORMATION.................................................... 37 4.4.3 TAX CREDITS AND/OR EMPLOYER/EMPLOYEE CONTRIBUTION....................... 37 4.4.4 VOLUNTARY OVER DEDUCTION............................................................................. 37 4.4.5 PAY PERIODS............................................................................................................ 37 4.4.6 DIRECTIVE NUMBERS............................................................................................... 38 5 TAXPAYER INFORMATION: INCOME................................................................................................... 38 5.1 INVESTMENT INCOME (EXCLUDING EXEMPT DIVIDENDS)................................................. 38 5.1.1 INVESTMENT INCOME EXEMPT FROM NORMAL TAX.......................................... 39 5.1.2 LOCAL INTEREST:..................................................................................................... 39 5.1.3 SARS INTEREST:....................................................................................................... 41 5.1.4 FOREIGN INTEREST AND FOREIGN TAX CREDITS ON FOREIGN INTEREST:... 42 5.1.5 GROSS FOREIGN DIVIDENDS SUBJECT TO SA NORMAL TAX AND FOREIGN TAX CREDITS ON FOREIGN DIVIDENDS:............................................................... 42 5.1.6 DISTRIBUTION FROM A REAL ESTATE INVESTMENT TRUST (REIT) / TAXABLE LOCAL DIVIDENDS.................................................................................................... 43 5.1.7 DIVIDENDS DEEMED TO BE INCOME IN TERMS OF s8E AND s8EA................... 43 5.1.8 FOREIGN INCOME (EXCLUDING INVESTMENT INCOME AND CAPITAL GAINS TAX)............................................................................................................................. 44 5.2 FOREIGN TAX CREDITS........................................................................................................... 46 5.2.1 FOREIGN TAX CREDITS – SOUTH AFRICAN SOURCED INCOME – S6QUIN...... 46 5.2.2 FOREIGN TAX CREDITS – REFUNDED / DISCHARGED........................................ 47 5.3 TRUST INCOME DISTRIBUTED TO YOU, VESTED IN YOU AS A BENEFICIARY OR DEEMED TO HAVE ACCRUED IN TERMS OF S7..................................................................................... 47 5.4 CAPITAL GAIN/LOSS (CGT)...................................................................................................... 49 5.4.1 DETERMINING A CAPITAL GAIN OR A CAPITAL LOSS.......................................... 49 5.4.2 WHAT IS THE BASE COST OF AN ASSET HELD ON 01 OCTOBER 2001?........... 50 5.4.3 TIME APPORTIONMENT METHOD:.......................................................................... 50 5.4.4 EXCLUSIONS.............................................................................................................. 50 5.4.5 INCLUSION RATE:...................................................................................................... 51 5.4.6 ASSETS DISPOSED OF TO A CONNECTED PERSON........................................... 52 5.4.7 COMPLETION OF THE RETURN:.............................................................................. 52 5.5 LOCAL RENTAL INCOME FROM THE LETTING OF FIXED PROPERTY................................. 54 5.5.1 DESCRIPTION............................................................................................................ 54 COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 3 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 5.5.2 UNIQUE IDENTIFIER.................................................................................................. 55 5.5.3 PROPERTY NOT USED FOR TRADING PURPOSES.............................................. 55 5.5.4 INCOME DETAILS...................................................................................................... 55 5.5.5 EXPENDITURE DETAILS........................................................................................... 55 5.5.6 DETERMINATION OF PROFIT / LOSS...................................................................... 56 5.6 LOCAL BUSINESS, TRADE AND PROFESSIONAL INCOME (INCLUDING CRYPTO ASSET(S))................................................................................................................................... 56 5.6.1 BUSINESS/TRADE NAME.......................................................................................... 57 5.6.2 UNIQUE IDENTIFIER.................................................................................................. 57 5.6.3 BUSINESS NO LONGER TRADING........................................................................... 57 5.6.4 INCOME REFLECTED ON IRP5/IT3(A) REGARDED TO BE TRADING INCOME... 57 5.6.5 DUAL – PURPOSE EXPENDITURE........................................................................... 58 5.6.6 CAPITAL EXPENDITURE........................................................................................... 58 5.6.7 TRADING STOCK TAKEN FOR PRIVATE USE......................................................... 58 5.6.8 LEARNERSHIP AGREEMENTS – SECTION 12H..................................................... 59 5.6.9 LEGAL EXPENSES..................................................................................................... 60 5.6.10 GENERAL EXPENSES............................................................................................... 60 5.6.11 PRIVATE USE OF BUSINESS PREMISES................................................................ 60 5.6.12 ELECTED DEPRECIABLE ASSET ALLOWANCE..................................................... 60 5.6.13 EXPIRED LEASE AGREEMENTS.............................................................................. 60 5.6.14 RECOUPMENT OF EXPENDITURE.......................................................................... 60 5.6.15 RESERVES................................................................................................................. 61 5.6.16 INTEREST PAID.......................................................................................................... 61 5.6.17 FINANCE CHARGES.................................................................................................. 61 5.6.18 COST OF TRIPS ABROAD......................................................................................... 61 5.6.19 DRAWINGS AND CAPITAL ACCOUNTS................................................................... 61 5.6.20 DOUBTFUL DEBT....................................................................................................... 61 5.6.21 RING-FENCING OF ASSESSED LOSSES OF CERTAIN TRADES.......................... 61 5.6.22 PARTNERSHIPS......................................................................................................... 64 5.7 ADDITIONAL INFORMATION..................................................................................................... 65 5.7.1 URBAN DEVELOPMENT ZONES (UDZ) – SECTION 13quat................................... 65 5.7.2 RESEARCH AND DEVELOPMENT INFORMATION – SECTION 11D...................... 66 5.7.3 IMPROVEMENTS NOT OWNED BY TAXPAYER – SECTION 12N.......................... 67 5.7.4 LEARNERSHIP AGREEMENT - S12H....................................................................... 67 5.8 ENHANCED RENEWABLE ENERGY DEDUCTION – S12BA................................................... 67 5.9 OTHER TAXABLE RECEIPTS AND ACCRUALS....................................................................... 68 5.10 AMOUNTS RECEIVED/ACCRUED CONSIDERED NON-TAXABLE......................................... 68 5.11 TAX FREE INVESTMENTS (TFI)................................................................................................ 69 6 RESIDENCY INFORMATION.................................................................................................................. 71 7 INCOME FROM FARMING OPERATIONS (INCLUDING PARTNERSHIP FARMING OPERATIONS) 71 7.1 FARMING OPERATIONS (IT48)................................................................................................. 77 7.1.1 INCOME FROM LOCAL FARMING OPERATIONS (IT48)......................................... 77 7.1.2 SPECIAL DEPRECIATION INFORMATION............................................................... 79 7.1.3 INFORMATION ON CAPITAL IMPROVEMENTS....................................................... 79 7.1.4 DETAILS OF FARMING EXPENSE (IT48)................................................................. 80 7.1.5 ENHANCED RENEWABLE ENERGY DEDUCTION - S12BA.................................... 81 7.1.6 CAPITAL IMPROVEMENTS INCURRED DURING THE YEAR OF ASSESSMENT (Paragraph 12(1) of the First Schedule)...................................................................... 81 COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 4 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 7.2 LOCAL PARTNERSHIP FARMING OPERATIONS (IT48V)....................................................... 82 7.2.1 INCOME FROM LOCAL PARTNERSHIP FARMING OPERATIONS (IT48V)............ 82 7.2.2 SPECIAL DEPRECIATION INFORMATION............................................................... 83 7.2.3 INFORMATION ON CAPITAL IMPROVEMENTS....................................................... 83 7.2.4 PARTNER’S INFORMATION FOR SHARE DISTRIBUTION (FARMING)................. 83 7.2.5 DETAILS OF FARMING EXPENSE (IT48V)............................................................... 84 7.2.6 ENHANCED RENEWABLE ENERGY DEDUCTION - S12BA.................................... 85 7.2.7 CAPITAL IMPROVEMENTS INCURRED DURING THE YEAR OF ASSESSMENT (Paragraph 12(1) of the First Schedule) (IT48V)......................................................... 85 8 DEDUCTIONS.......................................................................................................................................... 86 8.1 MEDICAL.................................................................................................................................... 86 8.1.1 MEDICAL SCHEME FEES TAX CREDIT................................................................... 86 8.1.2 DEPENDANTS............................................................................................................ 87 8.1.3 PROOF OF MEDICAL EXPENSES............................................................................ 88 8.1.4 TAXPAYERS AGED 65 YEARS AND OLDER............................................................ 88 8.1.5 TAXPAYERS UNDER 65 YEARS WITH A DISABILITY............................................. 89 8.1.6 TAXPAYERS UNDER 65 YEARS WITH NO DISABILITY.......................................... 89 8.1.7 MEDICAL EXPENDITURE WHERE TAXPAYER IS THE MAIN MEMBER OF THE MEDICAL SCHEME.................................................................................................... 90 8.1.8 MEDICAL EXPENDITURE – IN RESPECT OF ANY FAMILY MEMBER DEPENDENT FOR FAMILY CARE AND SUPPORT (AND TAXPAYER IS NOT THE MAIN MEMBER OF THE MEDICAL SCHEME)..................................................................................... 92 8.1.9 EXPENSES NOT REFLECTED ON ANY MEDICAL CERTIFICATE.......................... 93 8.1.10 PHYSICAL IMPAIRMENT........................................................................................... 93 8.1.11 DISABILITY.................................................................................................................. 94 8.1.12 MEDICAL SUBSIDIES FROM FORMER EMPLOYERS............................................. 95 8.1.13 COMPLETING THE MEDICAL DEDUCTIONS SECTION FOR THE 2016 YEAR OF ASSESSMENT AND PRIOR YEARS.......................................................................... 95 8.2 SOLAR ENERGY TAX CREDIT.................................................................................................. 97 8.3 RETIREMENT CONTRIBUTIONS.............................................................................................. 97 8.3.1 CONTRIBUTIONS FROM THE 2017 YEAR OF ASSESSMENT ONWARDS........... 98 8.3.2 CONTRIBUTIONS FOR 2016 YEAR OF ASSESSMENT AND PRIOR YEARS...... 100 8.3.3 PENSION AND/OR PROVIDENT FUND ADDITIONAL VOLUNTARY CONTRIBUTIONS INCLUDING THE PURCHASE OF PAST OR ADDITIONAL SERVICES................................................................................................................. 101 8.4 INCOME PROTECTION INSURANCE CONTRIBUTIONS...................................................... 101 8.5 TRAVEL CLAIM AGAINST ALLOWANCE - SECTION 8(1)(B).................................................. 102 8.5.1 LOGBOOK OF BUSINESS KILOMETRES TRAVELLED?....................................... 103 8.5.2 DETAILS OF YOUR VEHICLE(S)............................................................................. 104 8.5.3 DETAILS OF KILOMETRES TRAVELLED............................................................... 104 8.5.4 TRAVELLING EXPENSES........................................................................................ 104 8.6 EMPLOYER PROVIDED VEHICLES........................................................................................ 108 8.6.1 EMPLOYER PROVIDED VEHICLE: OTHER THAN OPERATING LEASE.............. 109 8.6.2 EMPLOYER PROVIDED VEHICLE: OPERATING LEASE...................................... 113 8.6.3 USE OF MOTOR VEHICLE FOR 2011 YEAR OF ASSESSMENT AND PRIOR YEARS....................................................................................................................... 114 8.7 DONATIONS ALLOWABLE IN TERMS OF S18A TO APPROVED ORGANISATIONS........... 114 8.7.1 DONATIONS TO THE SOLIDARITY FUND.............................................................. 114 8.7.2 DONATIONS (EXCLUDING ANY AMOUNT ALREADY ON THE IRP5 CERTIFICATE AND ANY OTHER ALLOWABLE DONATIONS MADE)........................................... 115 COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 5 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 8.7.3 EXAMPLES................................................................................................................ 116 8.8 OTHER DEDUCTIONS............................................................................................................. 117 8.8.1 EXPENSES AGAINST LOCAL AND/OR FOREIGN TAXABLE SUBSISTENCE ALLOWANCE............................................................................................................ 117 8.8.2 DONATIONS ALLOWABLE IN TERMS OF SECTION 18A TO APPROVED PUBLIC BENEFIT ORGANISATIONS..................................................................................... 118 8.8.3 DEPRECIATION - SECTION 11(e)........................................................................... 118 8.8.4 HOME OFFICE EXPENSES - SECTION 11(a) read with s23(b) and 23(m)............ 118 8.8.5 TRAVEL EXPENSES (E.G. COMMISSION INCOME)............................................. 119 8.8.6 AMOUNTS REFUNDED IN TERMS OF SECTION 11(nA) AND 11(nB).................. 120 8.8.7 ALLOWABLE ACCOUNTANCY FEES – SECTION 11(a)........................................ 120 8.8.8 LEGAL COSTS - SECTION 11(c)............................................................................. 121 8.8.9 BAD AND DOUBTFUL DEBT - SECTION 11(i) and (j)............................................. 121 8.8.10 SECTION 8C LOSSES.............................................................................................. 121 8.8.11 HOLDERS OF A PUBLIC OFFICE - SECTION 8(1)(d)............................................ 122 8.8.12 REMUNERATION FOR FOREIGN EMPLOYMENT SERVICES THAT QUALIFIES FOR SECTION S10(1)(o)(i) EXEMPTION................................................................ 122 8.8.13 REMUNERATION FOR FOREIGN EMPLOYMENT SERVICES THAT QUALIFIES FOR SECTION 10(1)(o)(ii) EXEMPTION (EXCLUDING S8A/8C GAINS & DIVIDENDS).............................................................................................................. 122 8.8.14 REMUNERATION (s8A/8C GAINS) TAXED ON IRP5 BUT COMPLY WITH EXEMPTION IN TERMS OF SECTION 10(1)(o)(ii).................................................. 122 8.8.15 DEDUCTION OF INTEREST REPAID TO SARS (IN TERMS OF SECTION 7F) THAT WAS PREVIOUSLY TAXED IN TERMS OF SECTION 7E....................................... 123 8.8.16 DEDUCTION ITO S6quat (1C) FOR FOREIGN TAXES PAID OR PROVED TO BE PAYABLE TO A FOREIGN GOVERNMENT OF ANY COUNTRY ON ANY SA SOURCED TRADE INCOME.................................................................................... 123 8.8.17 COMMISSION INCOME EXPENDITURE - SECTION 11(a).................................... 123 8.9 QUALIFYING CRITERIA (S10(1)(O).......................................................................................... 124 8.9.1 QUALIFYING CRITERIA FOR s10(1)(o)(i)................................................................ 124 8.9.2 QUALIFYING CRITERIA FOR s10(1)(o)(ii) EXEMPTION (excluding s8A/8C gains and dividends)................................................................................................................... 124 8.9.3 QUALIFYING CRITERIA FOR s10(1)(o)(ii) EXEMPTION RELATING TO s8A/8C GAINS (excluding dividends).................................................................................... 126 8.10 INVESTMENTS IN VENTURE CAPITAL COMPANIES (VCC): S12J....................................... 127 9 STATEMENT OF ASSETS AND LIABILITIES..................................................................................... 128 9.1 STATEMENT OF LOCAL AND FOREIGN ASSETS AND LIABILITIES.................................... 128 9.2 LOCAL ASSETS (AT MARKET VALUE)................................................................................... 128 9.3 STATEMENT OF FOREIGN ASSETS AND LIABILITIES......................................................... 129 9.4 PARTNERSHIPS...................................................................................................................... 129 10 VOLUNTARY DISCLOSURE PROGRAMME (VDP)............................................................................ 130 11 PROVISIONAL TAXPAYERS................................................................................................................ 130 11.1 PROVISIONAL TAX PERIODS AND DUE DATES:.................................................................. 131 11.2 LETTER ISSUED TO TAXPAYERS AFTER ASSESSMENT.................................................... 132 11.3 EXAMPLES............................................................................................................................... 132 12 STATUTORY RATES OF TAX APPLICABLE TO INDIVIDUALS........................................................ 133 12.1 RATES FOR THE 2023 YEAR OF ASSESSMENT................................................................... 133 12.2 RATES FOR THE 2024 YEAR OF ASSESSMENT................................................................... 133 12.3 RATES FOR THE 2025 YEAR OF ASSESSMENT................................................................... 134 COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 6 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 13 CONCLUSION....................................................................................................................................... 134 14 DEFINITIONS AND ACRONYMS.......................................................................................................... 134 15 DOCUMENT MANAGEMENT............................................................................................................... 134 15.1 REVISION HISTORY TABLE.................................................................................................... 134 16 DISCLAIMER......................................................................................................................................... 135 COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 7 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 1 SUMMARY The purpose of this document is to provide guidance for the completion of the ITR12 return and to briefly explain the various sections of the Income Tax Act No. 58 of 1962 that will be applied during the assessment process. Should any aspect of this guide be in conflict with the applicable legislation the legislation will take precedence. 2 GENERAL INFORMATION 2.1 WHEN MUST THE RETURN BE SUBMITTED? a) The due date for submission of income tax returns is published annually in the Government Gazette. Every year SARS embarks on an extensive publicity campaign to inform taxpayers of the deadline for the year. b) For the 2024 year of assessment (YOA), the income tax returns for individuals must be submitted on or before the following due dates: 21 October 2024 – if you are a non-provisional taxpayer 20 January 2025 – if you are a provisional taxpayer and your return is submitted via eFiling. c) eFiling is the quickest, easiest and most convenient way to submit the return and is the option recommended by SARS. d) If you are required to submit a return and you do not submit it by the relevant deadline, you will be liable for an administrative penalty due to non-compliance. 2.2 WHO IS NOT REQUIRED TO SUBMIT A RETURN? a) Although a taxpayer must still register for income tax, he/she is not liable to submit a return for the 2024 year of assessment if any of the following apply: b) The taxpayer does not have any deductions to claim and the gross income for the tax year consists solely of gross income described in one or more of the following: Remuneration income that: Is for the full year of assessment Is paid or payable from one single source (e.g. one employer) Employees’ tax has been deducted or withheld in terms of the deduction tables prescribed by the Commissioner Does not exceed R500 000 Does not include any allowance or advance (e.g. travel allowance) Does not include any taxable benefit granted in terms of paragraph 7 of the Seventh Schedule to the Income Tax Act (i.e. right of use of motor vehicle from employer) Does not include any amount received or accrued in respect of services rendered outside the Republic (i.e. foreign services). Interest income from a source in the Republic not exceeding: R23 800 in the case of an individual below the age of 65 years R34 500 in the case of an individual aged 65 years and above R23 800 in the case of the estate of a deceased person. Dividends exempt from normal tax, and the individual was a non-resident for the year of assessment Amounts received or accrued from a tax free investment. A single lump sum was received from a pension/provident/pension preservation/provident preservation/retirement annuity fund and tax was deducted/withheld from that lump sum in terms of a directive issued by the Commissioner. COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 8 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 c) The taxpayer is notified by the Commissioner in writing that he/she is eligible for automatic assessment; AND the person’s gross income, exemptions, deductions and rebates reflected in the records of the Commissioner are complete and correct as at the date of the assessment based on an estimate to give effect to automatic assessment. 2.3 HOW TO REQUEST AND SUBMIT A RETURN? a) You can request a return through any of the following channels described below. b) eFiling: The quickest and easiest way to obtain a return is to register as an eFiler on www.sarsefiling.co.za, request your return and submit the completed return online. You can make use of the ‘Help-You-eFile’ service, which allows you to share the view of your eFiling screen on your personal computer with a SARS agent. This service will enable a SARS agent to view the same screen as you to assist in identifying the problems you are experiencing and to help you solve your problem. You benefit by being able to call on the support and advice of our staff without having to visit a SARS office. You can even ask a SARS agent to call you back. c) SARS MobiApp: If you have a smartphone, install the SARS eFiling App from the App Store (for Apple devices) or Google Play Store (for Android devices). Once installed, login with your eFiling profile to request and submit the return via the App. d) Telephonically: You can use our eBooking System to book a telephonic appointment with SARS. A SARS official will assist you to complete and submit your return telephonically. Please ensure that you have all the required supporting documents readily available before your appointment. 2.4 DOCUMENTATION REQUIRED TO COMPLETE YOUR RETURN a) Supporting documents are required to complete an income tax return. Below are examples of the documentation/information that may be required: IRP5/IT3(a) Employees’ Tax Certificate for remuneration received or in respect of lump sums from your employer, pension fund, provident fund or retirement annuity fund Certificates received for local interest income, foreign interest income and foreign dividend income If you are married in community of property, the certificates received by both you (the taxpayer) and your spouse are required If you married out of community of property, only the certificates that you receive are required Documents relating to medical expenditure such as: The tax certificate received from your medical scheme for the period 1 March 2022 and ending 28 February 2023 (if you belong to a medical scheme) Proof of qualifying medical expenses paid by you and not recovered from a medical scheme Completed ITR-DD Confirmation of Diagnosis of Disability form (if you want to claim disability related expenses) If you received a travel allowance or a fringe benefit for an employer provided vehicle, you must have a logbook to claim the business travel deductions The income tax certificate(s) received from the financial institution for retirement annuity contributions made COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 9 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 The tax certificate(s) received from the financial institution(s) for tax free investments Section 18A donation tax certificate All information relating to capital gain transactions (local and foreign) for e.g. proof of proceeds for each asset disposed of (such as sales agreement, invoices, IT3(c) certificate), calculation of the base cost in respect of each asset Documents and receipts for commission related expenditure including a logbook to claim business travel deductions All information relating to the letting of assets, e.g. rental/lease agreement, bond statement reflecting interest on bond if claimed on return, schedule of details on rental expenses, related invoices Financial statements for trading and farming activities (if applicable) Any other documents relating to income that must be declared or deductions that may be claimed. b) Please note you are required to keep all supporting documents for a period of five (5) years from the date of submission of the return. SARS may request these documents to verify the information declared on your income tax return. c) If the documents are requested by SARS, you can upload it via eFiling; the SARS MobiApp or the online service on the SARS website. Please ensure that the documents are not password protected. 2.5 AUTOMATIC ASSESSMENT (AUTO ASSESSMENT) a) In terms of section 95(2) of the Tax Administration Act, SARS can raise an original assessment based on estimate by using information that is readily available to SARS. This is commonly referred to an as “automatic assessment” or “auto-assessment”. b) A person who is automatically assessed is not required to submit an income tax return (in terms of paragraph 3(3) of Government Gazette No. 50741 published on 7 June 2024). c) An auto-assessment will be based on information available on SARS records and data received from employers, financial institutions, medical schemes, retirement annuity fund administrators and other third party data providers. SARS will provide each eligible taxpayer with the following information pertaining to the auto-assessment: An ‘ITR12 return’ that has been auto completed A ‘Notice of Assessment (ITA34)’ Note: the type of assessment will indicate ‘original estimate assessment’ to denote that it is an original assessment based on estimate. d) If you are selected for auto-assessment, you will receive an SMS notification from SARS. To view the details of your auto-assessment, you can: Log on to eFiling, or Log on to the SARS MobiApp; or Book an appointment with a SARS for an official to assist you. 2.5.1 AGREE WITH AUTO-ASSESSEMENT a) If you agree with the auto-assessment (i.e. the information is true and correct), you do not have to do anything. If a refund is due, it will be paid to you If an amount is payable to SARS, you must pay it by the interest free/grace period date stipulated on the notice of assessment (ITA34). You may apply for a suspension of payment. No administrative penalties will apply If you later identify additional income/deductions/credits not reflected on your auto-assessment, please refer to the following sections for the process to declare this information: Disagree with Auto-Assessment COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 10 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 Request for Extension After the filing season due date for non-provisional taxpayers, the ‘original assessment based on estimate’ will become final. Please note an ‘original assessment based on estimate’ is only subject to objection or appeal if SARS takes a decision not to make a reduced or additional assessment after the taxpayer submits the relevant material within the time stipulated. (Section 95(5) of the Tax Administration Act). 2.5.2 DISAGREE WITH AUTO-ASSESSEMENT a) If you do not agree with the auto-assessment (the information is not true and correct, or you have additional income/deductions/credits to declare) you must edit the ITR12 return and file it by the filing season due date for non-provisional taxpayers. Note: where you disagree with the prepopulated data, you must inform your employer/service provider to correct the data and resubmit it to SARS. Once corrected, you can edit and file your return. b) If any financial changes are made on your edited return, please note the following: The return will be evaluated If supporting documents are required to verify the declarations on the return, SARS will issue a letter to notify you and pend the case. You must provide the supporting documents within 21 business days from the date of the letter If you do not provide the supporting documents on time, the case will be closed automatically SARS may either accept or decline to reassess your return after evaluation If SARS reassesses your return, you will receive a notice of assessment (ITA34) If SARS declines to reassess your return, you will receive a rejection letter. If you are dissatisfied with the SARS decision, you may lodge an objection within 30 business days from the date of the rejection letter (in terms of Section 95(8) of the Tax Administration Act). 2.5.3 REQUEST FOR EXTENSION a) If you do not agree with the auto-assessment and you are unable to file the return by the filing season due date for non-provisional taxpayers, you can provide SARS with reasonable grounds and request for an extension of the period (in terms of Section 95(7) of the Tax Administration Act). b) You can request an extension via eFiling, the SARS MobiApp or by booking an appointment with a SARS for assistance. 2.5.4 THIRD PARTY DATA RECEIVED AFTER ASSESSMENT ISSUED a) Third party data providers may submit new or updated data (e.g. IRP5/IT3(a), IT3(b), IT3(s), retirement annuity or medical tax certificates) after the annual third party data submission due date. b) SARS will determine if new/updated third party data received impacts the assessment issued to you. If you have been auto assessed, SARS may issue a newer version of the auto assessment. If you have already submitted an original return, SARS will notify you of the new third party data received and you will have an opportunity to amend and file your return. If you do not file an amended return, your assessment will be auto revised. 2.6 MARRIAGE IN COMMUNITY OF PROPERTY a) Income received by (or accrued to) a taxpayer (other than that from the carrying on of any trade, but including investment income and capital gain transactions), is deemed to accrue to the spouses in equal COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 11 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 portions. This includes rental from the letting of fixed property/assets that forms part of the communal estate. b) Where the income does not accrue to the communal estate, it must be included in the income of the spouse who owns the property/asset. SARS may request the details regarding these excluded amounts to ensure the correct assessment of the return. Please ensure that a will and/or antenuptial contract is available to support this declaration c) Income received by (or accrued to) a taxpayer from the carrying on of a trade (excluding the letting of fixed property) will be deemed to be the income of the spouse who is carrying on the trade. Where the spouses are trading in partnership, the income will (subject to the anti-avoidance provisions) accrue in the agreed profit-sharing ratio. d) Any benefit paid by a pension fund, provident fund or retirement annuity fund is deemed to be trade income and will be taxed in the hands of the member/previous member of the fund. Any annuity received as a result of a purchased annuity (“annuity contract”), as defined in section 10A of the Income Tax Act, is also deemed to be trade income and will be taxed in the hands of the person to whom the annuity is payable. e) Where a taxpayer’s income is deemed to be the income of his/her spouse, any deductions or allowances relating to that income will be allowed in the same proportion in which the income is taxed. 2.6.1 SPOUSAL ASSESSMENT a) SARS will identify taxpayers who are ‘married in community of property’ based on information declared on previous tax returns. This information will be validated against the Department of Home Affairs and if a match is confirmed the taxpayers (i.e. both spouses) will be linked on the SARS systems b) If investment income is identified for a taxpayer based on third party data received (e.g. IT3(b) certificate for interest earned), the third party data will be prepopulated on the returns of both spouses (Taxpayer A and Taxpayer B) if they are linked on the SARS system. The investment income will be apportioned accordingly and will reflect on the notice of assessment (ITA34) issued to each spouse. Note: Where applicable, the registration process may be initiated for a spouse who is not registered for tax. Examples of investment income: Local interest (4201) Foreign interest (4218) Foreign tax credits on foreign interest (4113) Gross foreign dividends subject to SA normal tax (4216) Foreign tax credits on foreign dividends (4112) Distribution from a REIT/taxable local dividends (4238) Dividends deemed to be income s8E and s8EA (4292). c) The following will be excluded from spousal assessments: Deceased and insolvent individuals Ceased to be resident individuals Unregistered spouses Taxpayers not required to file tax returns due to the tax threshold d) It is possible that after a spousal assessment is issued, one of the spouses (e.g. Taxpayer A) can change the marital status or communal estate indicator and file a return. These changes will impact the assessment already issued to the other spouse (i.e. Taxpayer B). In this scenario: COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 12 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 If the affected spouse (i.e. Taxpayer B) is aware of the changes, he/she can also file a return containing the same amendments as his/her spouse (i.e. correct marital status/communal estate indicator). If the affected spouse (Taxpayer B) is unaware of the changes made on Taxpayer A’s return, SARS will: Notify the spouse (Taxpayer B) that recent changes to the marital status and/or communal estate impacts the assessment issued to him/her Request him/her to review the changes and submit and original return/request for correction within 21 business days failing which SARS will raise a reduced or additional assessment for the tax year. e) From the 2024 YOA each investment income section on the return will display a sub-section to separately declare investment income received by the spouse. 2.7 REVISED ESTIMATED ASSESSMENT a) If the ITR12 return you submit is routed for verification and there is no response to the request for supporting documents within the required period (after delivery of more than one request for such material) SARS may make a revised estimated assessment in terms of section 95(1)(c) of the Tax Administration Act. A notice of assessment (ITA34) will be issued to notify you of the reduced/additional estimated assessment and the reason for the adjusted assessment. b) You will have the option to submit the outstanding supporting documents to SARS within 40 business days from the date of assessment under section 95(6) of the Tax Administration Act. You may provide SARS with reasonable grounds and request an extension of this period (in terms of Section 95(7) of the Tax Administration Act) You can submit supporting documents via eFiling; the SARS MobiApp; the online service on the SARS website or by booking an appointment at a SARS for assistance. If you do not provide the supporting documents to SARS within the required period, the estimated assessment will become final and is not subject to objection or appeal. 2.8 RESIDENCE BASIS OF TAXATION a) With effect from 1 January 2001, the Income Tax system in South Africa changed from a source-based system to a residence basis of taxation. Residents are subject to tax on their worldwide income, subject to certain exemptions. Non-residents are subject to tax on receipts and accruals derived from sources within South Africa (certain exceptions apply). b) A resident (pertaining to individuals) means: A person who is ordinarily resident in South Africa (the term ‘ordinarily resident’ means the country to which a person would naturally and as a matter of course return from his/her travels) A person who has been present in South Africa for: More than 91 days in aggregate during the current year of assessment; and More than 91 days in aggregate during each of the five preceding years of assessment; and More than 915 days in aggregate during the five years of assessment preceding the current year of assessment. Note: In this instance, the person will be a resident with effect from the first day of the relevant year of assessment (for this purpose a day includes a part of a day). c) A person will not be regarded as a resident in the following cases: A person is outside South Africa for a period of 330 full continuous days immediately after the day on which he ceases to be physically present in South Africa (if that person was a resident in terms of the physical presence test). COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 13 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 A person is deemed to be exclusively a resident of another country for purposes of the application of any agreement entered into between the government of South Africa and the government of the other country for the avoidance of double taxation. d) Remuneration as a result of services rendered for an employer outside South Africa is partially exempt from tax in terms of section 10(1)(o)(ii) of the Income Tax Act if: The employee is outside South Africa for a period exceeding 183 full days in any twelve-month period The employee is outside South Africa for a continuous period of more than 60 full days during that twelve-month period The services were rendered during that period This provision does not apply to employees of national, provincial or local governments, and to employees of certain public entities From 1 March 2020, only the first R1.25 million of foreign employment income earned will qualify for exemption. e) Pensions received by or accrued to a resident under the social security system of another country are exempt from normal tax in South Africa. Foreign income received by (or accrued to) a resident individual is taxable. f) Any pension received or accrued to any resident from a source outside South Africa, which is not deemed to be from a South African source, in consideration of past employment outside South Africa is exempt from normal tax in South Africa. 2.9 UTILISING THE SERVICES OF A TAX PRACTITIONER a) In terms of section 240 of the Tax Administration Act No.28 of 2011, all individuals who complete and submit tax returns on behalf of clients must be registered with both a Recognised Controlling Body (RCB) and with SARS as tax practitioners. Such tax practitioners have the full authority to prepare and submit tax returns on behalf of their clients. Individuals who are not registered as Tax Practitioners will not have this privilege. To ensure you are working with a registered tax practitioner, please request their PR Number and verify its validity on the SARS website. b) In the event that you receive assistance from an individual who is not a tax practitioner or who is no longer a tax practitioner (e.g. they have been deregistered by the RCB or by SARS), the system will not allow that individual to submit your return to SARS. In this instance, only the following options will be available on eFiling for that individual: ‘Save’ – this option will allow the return to be saved on eFiling for completion at a later stage, without performing form validations. ‘Save for Filing’ – this option will allow form validations to be performed when the prepared ITR12 is saved on eFiling. c) In such instances, to ensure that your tax return is submitted to SARS before the due date you can: Book an appointment with SARS where a SARS official will retrieve the completed return for you and submit it for processing; or You can also register for eFiling, obtain shared access or revoke the other’s party’s access and submit your own return. For more information refer to the guide ‘GEN-ELEC-18-G01 - How to Register for eFiling and Manage Your User Profile’ published on the SARS website. 2.10 SITE TAXPAYERS a) The Standard Income Tax on Employees (SITE) was a component of the Pay as You Earn (PAYE) method of paying income tax and was in effect a final withholding tax levied on the first R60 000 of COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 14 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 remuneration. SITE was phased out over the 2012 and 2013 tax years and is applicable to taxable income that consisted solely of remuneration of which the full amount was subject to SITE (done in terms of section 6(5) of the Income Tax Act through the application of a SITE rebate). b) A SITE rebate is only applicable to the 2012 and 2013 tax years for taxpayers who earned net remuneration from more than one source and the net remuneration of each source of income was less than or equal to R60 000 per annum. The SARS system will validate whether you qualify for a SITE rebate. If you meet the criteria, the amount of normal tax payable by you will be reduced as follows: 1 March 2011 to 29 February 2012 – normal tax payable reduced by a SITE rebate of 2/3 1 March 2012 to 28 February 2013 – normal tax payable reduced by a SITE rebate of 1/3. 2.11 REMUNERATION OF EMPLOYEES WORKING FOR FOREIGN GOVERNMENTS IN SOUTH AFRICA a) In terms of section 10(1)(c)(iii) any remuneration paid to any person of a foreign diplomatic or consular mission in South Africa is exempt from normal tax in South Africa on condition that the person is based in South Africa solely for the purpose of holding office as an official of a foreign government and he/she is not ordinarily resident in South Africa. b) The remuneration paid to any domestic or private servants of the foreign government employees is also exempt from normal tax under section 10(1)(c)(iv) provided that the domestic or private servant is not a South African citizen and is not ordinarily resident in South Africa. The exemption is not applicable to any other income (e.g. interest income or rental income) that the person of a foreign government may earn while working in South Africa. c) This exemption will cease to apply and the remuneration will become taxable if: The employee receives a permit for permanent residence in South Africa The foreign government carries on business activities in South Africa (any double taxation agreements in place will be taken into account). d) The s10(1)(c) exemption does not apply to remuneration paid to any persons who are ordinary residents in South Africa (i.e. employees that are recruited locally). e) In the case where a person’s remuneration is not exempt from normal tax in terms of section 10(1)(c)) and the diplomatic or consular mission has not voluntarily deducted or withheld PAYE, that person is regarded as a provisional taxpayer. For more information refer to the following guides available on the SARS website: ‘Guide for Provisional Tax’ ‘Guide on the Taxation of Foreigners working in South Africa - External Guide’ 2.12 INSOLVENCY a) Based on legislation, a person (purely for personal income tax purposes) may be issued with up to three tax reference numbers to finalise an insolvent estate. The taxpayer or the appointed trustee/administrator is required to contact a SARS office to request for the tax number to be coded as an insolvent person. The tax reference numbers are defined and issued as follows: The first tax reference number refers to the taxpayer’s original number registered and is applicable to assessments for the income and deductions up to the date preceding the date of sequestration. The second tax reference number refers to the insolvent estate managed by the court appointed administrator/trustee. It is not a compulsory tax reference number and is for any income and deductions applicable to the “insolvent estate” from the date of sequestration until the estate is finalised. COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 15 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 The taxpayer or appointed representative may either be aware of the income received/accrued or assets disposed of at the time when the first tax reference number is coded as insolvent by SARS or at a much later stage. This registration may be initiated by the appointed representative on eFiling if he/she is already recorded and verified as the registered representative at SARS. For more information on how to register via eFiling refer to the external guide ‘GEN-REG-01-G04 - How to complete the registration amendments and verification form (RAV01)’ available on the SARS website. The third tax reference number refers to the taxpayer’s ‘new identity’ and is applicable to income and deductions after the date of sequestration. The taxpayer will only use this number to comply with his/her tax liabilities after the date of sequestration. b) The date of sequestration/insolvency implies: The date of voluntary surrender of an estate, if accepted by the Court; or The date of provisional sequestration of an estate if final order or sequestration is granted by the court. Example: If the date of insolvency is 4 March 2023, the date after insolvency will be 5th March 2023. This implies that first tax reference number (described above) will be applicable to transactions up to 4 March 2023 and the third tax reference number (described above) will be applicable from 5 March 2023 onwards. c) The court appointed representative may appoint a tax practitioner to complete returns in respect of the first and second tax reference numbers. The normal eFiling user rights rule will apply. d) New tax reference number after date of sequestration: If the taxpayer is an eFiler, he/she must ensure that the newly allocated tax reference number (i.e. effective from after the sequestration date) is linked to his/her eFiling profile. Ensure that the correct tax reference number is reflected on the applicable individual income tax return. Certain information is prepopulated by SARS on the return, such as IRP5/IT3(a) details, retirement annuity contributions, medical contributions; etc. Where the sequestration date is in the middle of the year of assessment, (example sequestration date is 12 September 2023 and the tax year end is 29 February 2024) an apportionment of the prepopulated income will be required between the first and third tax reference numbers. In this instance, please lodge a dispute in order to notify SARS that the prepopulated income must be split. e) For information on how to complete the income tax return for an insolvent estate, please refer to ‘IT- GEN-06-G01 - Guide to the Individual Income Tax Return for Deceased and Insolvent Estates’ on the SARS website. 2.13 RETURNS FOR FUTURE YEARS OF ASSESSMENT a) Each year SARS makes a public announcement to inform taxpayers of the official start date of filing season. Taxpayers who are liable to submit an ITR12 for the current year of assessment can do so from the filing season start date. b) There may be cases where a taxpayer’s return must be filed for the next (future) year of assessment. Example: deceased taxpayers, insolvent taxpayers, emigrants (taxpayers who cease to be South African residents). In these instances, SARS will validate if the tax number is coded deceased, insolvent or emigrant on the SARS systems. The following pop-up message will display on the return. Please take note of the information in this message and the impact of filing a return early: “Please note that if the return you requested is not in respect of a deceased; or insolvency or upon emigrating, your return, when filed by you, will be selected for verification or audit, because the process in SARS of authenticating 3rd party data, that may have an impact on your COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 16 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 assessment, has not been completed. If you do not fall within the stated categories, you are encouraged to file the return during the official Filing Season published on the website www.sars.gov.za” 2.14 RETURNS FOR OLD YEARS OF ASSESSMENT a) The e-Filing and MobiApp platforms will only allow taxpayers to request, save or submit returns that are not older than 5 years. b) The limitation does not apply to active tax practitioners with an approved PR number; returns with a voluntary disclosure program (VDP) indicator, returns for which an administrative penalty was levied, returns for which and estimated assessment was raised. c) Please make an appointment with SARS if you need to submit ITR12 returns older than 5 years. d) Example: if the year of assessment (YOA) is 2024: Returns for the 2018 YOA and prior years will be blocked on eFiling and the MobiApp. Taxpayers can request and submit returns for the current YOA (2024) and the 5 years preceding the current YOA (i.e. 2023, 2022, 2021, 2020, 2019) If a taxpayer is coded as an insolvent estate/ceased residency/deceased estate, returns can be requested and submitted for the current YOA+1 (2025), the current YOA (2024) and the 5 years preceding the current YOA (i.e. 2023, 2022, 2021, 2020, 2019). 3 INFORMATION TO CREATE YOUR PERSONAL INCOME TAX RETURN (FORM WIZARD) a) The first page of the income tax return for individuals (Form Wizard) consists of several questions. Your return is customised according to your answers to these questions. These questions are discussed very briefly below. For further details, please refer to the applicable sections in this guide. b) If you are registered for eFiling you can customise your own return on the eFiling website. c) If you contact SARS for assistance you will have to answer the mandatory questions to enable the SARS official to customise your return. 3.1 STANDARD QUESTIONS 3.1.1 PERSON MAKING THE DECLARATION a) ‘Mark with an “X” if this declaration made by a tax practitioner’. The answer to this question is used to create the correct declaration on the return. If you are completing and submitting your own return, a ‘Taxpayer Declaration’ will be added to the return for you to sign. If a Tax Practitioner is completing and submitting the return on your behalf, a ‘Tax Practitioner Declaration’ will be added to the return for the tax practitioner to sign. 3.1.2 RESIDENCY a) ‘Mark with an “X” if you are a foreign national and not a RSA Tax-Resident’ This is applicable from the 2021 YOA and the field will be pre-populated if the data is available to SARS. COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 17 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 If your residency status has changed, please refer to the following guide on the SARS website for further assistance: ‘GEN-REG-01-G04 - How to complete the registration amendments and verification form (RAV01)’ Please refer to the SARS website for more information on ‘Ceased to be a resident’. b) ‘Mark with an "X" if you ceased to be a resident of the RSA during this year of assessment’ Applicable from the 2013 to 2021 YOA If you ceased to be a resident and the information has been made available to SARS, the date on which you ceased to be a resident will be pre-populated on your return. If you need to declare that you have ceased to be a resident, please refer to the following guide on the SARS website for further assistance: ‘GEN-REG-01-G04 - How to complete the registration amendments and verification form (RAV01)’ c) ‘Taxpayer ceased to be a tax resident of the RSA’ From the 2022 YOA, if you are classified as a ‘non-resident’ this field will be prepopulated and locked d) ‘Date on which you ceased to be a resident’ From the 2022 YOA, if you are classified as a ‘non-resident’ this field will be prepopulated and locked 3.1.3 EMPLOYMENT STATUS a) ‘Were you unemployed for the full year of assessment and did not receive any income (e.g. pension, interest, etc.) including any capital gain/loss?’ (Select ‘Y’ or ‘N’) If you select ‘Y’, please indicate if you made any retirement annuity fund contributions. Retirement annuity contributions amounts that do not qualify for a deduction in the current year of assessment will be carried forward to subsequent years of assessment. b) ‘Were you unemployed for any period during this year of assessment?’ (Select ‘Y’ or ‘N’) If yes, please indicate: ‘For how many periods were you unemployed?’ A maximum value of 5 is allowed in this field. Each continuous period of unemployment during the year of assessment is considered as one period. You are also required to complete the ‘unemployed from date’ and the ‘unemployed to date’ for each period Example: 1 Mr Taxpayer’s employment status was as follows for the year of assessment Mar – May Employed Jun Unemployed Jul – Nov Employed Dec – Jan Unemployed Feb Employed Mr Taxpayer was therefore unemployed for 2 periods. (Jun = 1 unbroken period and Dec - Jan = 1 unbroken period) Example 2: Mr Taxpayer’s employment status was as follows for the year of assessment 1 Mar – 30 Apr Employed 1 May – 31 May Unemployed 1 Jun – 16 Jul Employed 17 Jul – 15 Aug Unemployed COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 18 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 16 Aug – 30 Sep Employed 1 Nov – 30 Nov Unemployed 1 Dec – 31 Jan Employed 1 Feb – 28 Feb Unemployed Mr Taxpayer was therefore unemployed for 4 periods. (1 May - 31 May = 1 period, 17 Jul - 15 Aug = 1 period, 1 Nov - 30 Nov = 1 period and 1 Feb - 28 Feb = 1 period) 3.1.4 INCOME RECEIVED REFLECTED ON AN IRP5/IT3(a) EMPLOYEE TAX CERTIFICATE a) This section focuses on an individual who received remuneration related income and incurred typical expenditure such as pension fund contributions, medical expenses, retirement annuity contributions, travel expenses against a travel allowance and expenditure against employer provided vehicles. Indicate if you received income reflected on an IRP5/IT3(a) certificate. b) ‘How many certificates did you receive’? The return caters for a maximum of fifteen IRP5/IT3(a) certificates to be captured. If you received more than fifteen certificates, please refer to the section ‘Employee’s Tax Certificate Information’ for the steps to complete your information on the return. The number of IRP5 certificates that SARS has prepopulated on the return cannot be changed to a lower number. The value in this field can however be increased if you have more IRP5 certificates to declare. Please note that in this instance the certificates added to the return will be blank and you must complete the information. If any of the information prepopulated on the IRP5/IT3(a) section of the return is incorrect, you must contact the third party (i.e. employer or fund administrator) to rectify and resend the correct data to SARS. c) ‘Did you pay any medical expenditure (including medical scheme contributions made by you or your employer towards a medical scheme where you are the principal / main member)?’ (Select ‘Y’ or ‘N’) This question applies from the 2017 year of assessment and refers to medical expenditure made for yourself, your spouse or your qualifying children only. Medical scheme contributions that were paid via your employer will reflect next to source code 4005 on your IRP5/IT3(a) certificate. d) ‘Did you pay any medical expenditure (including medical scheme contributions where you are not the principal/main member of the medical scheme) in respect of any immediate family member who is dependent on you for family care and support?’ (Select ‘Y’ or ‘N’) From the 2017 year of assessment, medical expenditure that you paid on behalf of family members who are financially dependent on you for family care and support must be declared separately. e) ‘Did you or your employer make any retirement annuity fund contributions for the benefit of yourself?’ (Select ‘Y’ or ‘N’) If your retirement annuity fund contributions were paid via your employer, it will reflect next to source code 4006 on your IRP5 certificate. The institution to which these contributions were made will issue a certificate confirming the total contributions made for the tax year. This amount must be inserted in the ‘Retirement Annuity Fund Contributions’ section next to source code 4006 for the deduction to be taken into account during the assessment process. Note: Income protection contributions cannot be claimed from the 2016 year of assessment f) ‘Mark with an “X” if you made any contributions to pension and/or provident fund for the COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 19 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 purposes of past / additional services bought, and these are not reflected on any IRP5 or IT3(a) certificate’ This refers to additional contributions made to the pension and / or provident fund(s) by a taxpayer to create a better retirement benefit. g) ‘Do you want to claim a deduction against a travel allowance?’ (Select ‘Y’ or ‘N’). You can only claim expenditure if you received a travel allowance and you have kept accurate records of your business travel. Indicate the number of vehicles used during the year of assessment. If the number of vehicles exceeds five, please contact the SARS for further assistance. h) ‘Do you want to claim a deduction against an employer provided vehicle?’ (Select ‘Y’ or ‘N’). You can only claim expenditure if you received a taxable fringe benefit for the right of use of a motor vehicle provided by your employer and you have kept accurate records of your business travel. If the taxable fringe benefit is for an employer provided vehicle held under an ‘operating lease’, this will reflect next to source code 3816 or 3866 on your IRP5/IT3(a) certificate. If the taxable fringe benefit is for an employer provided vehicle held under any method other than an operating lease, this will be reflected next to source code 3802 or 3852 on your IRP5/IT3(a) certificate. Insert the number of employer provided vehicles used during the year of assessment. A maximum of 12 vehicles is allowed. i) ‘Did you receive any form of remuneration for foreign services rendered that is reflected on your South African IRP5 or IT3(a) certificate(s)’ (Select ‘Y’ or ‘N’). If you received remuneration for foreign services rendered that is reflected on an IRP5/IT3(a) certificate indicate if any portion of this foreign services remuneration was subject to tax in another country. You will also be required to complete the following applicable sections on the return: ‘Residency Information’ ‘Amounts considered non-taxable’ ‘Other Deductions’ ‘Foreign Income’ Note: If you received income for foreign services rendered and it is not reflected on any IRP5/IT3(a) certificate, you must select yes for the following question under the “Comprehensive” section of your return: ‘Did you receive any foreign income (including remuneration) apart from foreign interest and foreign dividend income and excluding foreign capital gain transactions?’ The foreign income section will open for completion. j) ‘Mark with an “X” if you received any foreign income, including remuneration for foreign services rendered not reflected on a South African IRP5 or IT3(a) certificate, subject to tax outside RSA and s10(1)(o) exemptions do not apply.' Applicable from the 2024 YOA If selected, complete the income amounts next to source codes 4298 and 4304 in the Foreign Income section. k) ‘Mark with an “X” if you received any form of remuneration for foreign services rendered, subject to tax outside RSA and s10(1)(o)(i) exemption applies’. Applicable from the 2024 YOA If selected, complete the section for ‘Qualifying criteria for s10(1)(o)(i)’ l) ‘Mark with an “X” if you received any form of remuneration for foreign services rendered, subject to tax outside RSA and the s10(1)(o)(ii) exemption applies (excluding s8A/8C gains and dividends)’. COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 20 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 Applicable from the 2024 YOA If selected, complete the section for “Qualifying Criteria for s10(1)(o)(ii) exemption (excluding s8A/8C gains and dividends)” m) ‘Mark with an “X” if you received any form of remuneration for foreign services rendered, subject to tax outside RSA and the s10(1)(o)(ii) exemption applies (relating to s8A/8C gains and dividends)’. Applicable from the 2024 YOA If selected, complete the section for “Qualifying Criteria for s10(1)(o)(ii) exemption relating to s8A/8C gains (excluding dividends)” 3.1.5 INVESTMENT INCOME a) ‘Did you receive any interest (local and foreign), distributions from a Real Estate Investment Trust (REIT)/taxable local dividends, taxable foreign dividends and / or dividends deemed to be income in terms of s8E & s8EA (excluding amounts received as a beneficiary of a trust(s), or deemed to have accrued in terms of s7)?’ (Select ‘Y’ or ‘N’) This question will display from the 2017 year of assessment and onwards. Any income distributed to you/vested in you as a beneficiary of a trust or deemed to have accrued to you in terms of s7 must be excluded and declared separately in the Trust section of the return. If yes to the above question, indicate ‘Did you receive exempt local and/or foreign dividend income?’ If you received local dividend income, the following sections must be completed on the return: ‘Amounts considered non-taxable’ ‘Exempt Local Dividends’ & ‘Exempt Foreign Dividends’ fields. b) ‘Was any income distributed to you/vested in you as a beneficiary of a trust, or deemed to have accrued in terms of s7?’ (Select ‘Y’ or ‘N’) This question is applicable from the 2017 year of assessment. If yes, ‘Indicate the number of trust(s) applicable?’ The ‘Trust Income’ section will be added to the return and repeated according to the value entered in this field (maximum of 20 allowed). c) ‘Were there any transactions (contributions, transfers, withdrawals, income received/accrued) on any Tax Free Investments held by you during this year of assessment?’ (Select ‘Y’ or ‘N’) If yes, ‘Indicate the number of tax free investments’ From the 2020 year of assessment, this field will be prepopulated with data received from third parties (e.g. banks). This value cannot be changed to a lower number however, it can be increased if you have more tax free investments to declare. If the information prepopulated on the return is incorrect, you must contact the third party to rectify and resend the correct data to SARS. 3.1.6 RENTAL INCOME a) ‘Did you derive income from the letting of fixed property(ies) (excluding amounts received/accrued as a beneficiary of a trust(s), or deemed to have accrued in terms of s7)’ This question will display from the 2017 year of assessment and onwards. If yes, indicate: ‘From how many separate rental properties did you derive income?’ The section for ‘Local Rental Income from the letting of Fixed Property’ will be added to the return and will be repeated according to the number of rental activities inserted in this field. Note: A maximum of 20 rental activities can be declared on the return. COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 21 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 Amounts received/vested in you as a beneficiary of a trust or deemed to have accrued must be excluded and declared separately in the Trust section of the return. The following question will display for the 2016 year of assessment and prior years: ‘Did you derive income from the letting of fixed property?’ Include amounts received, accrued or deemed to have accrued as a beneficiary of a trust. 3.1.7 DIRECTOR OR MEMBER OF A CLOSE CORPORATION a) ‘Mark with an “X” if you a director of a company or a member of a close corporation’ If selected, the ‘Statement of Local Assets and Liabilities’ section (local and foreign) will be added to your return. 3.1.8 VOLUNTARY DISCLOSURE PROGRAMME a) ‘Mark with an “X” if any declaration in this return relates to an application made under the SARS Voluntary Disclosure Programme’ If selected, the Voluntary Disclosure Programme section will be added to the return. 3.1.9 ASSETS a) ‘Mark with an “X” if you have assets which at market value are in excess of R50 million’ This field is applicable from 2023 YOA onwards If selected, the statement of assets and liabilities at market value (local and foreign at market value) will display on the return and is mandatory for completion. 3.1.10 DONATIONS a) ‘Do you want to claim donations made to an approved Public Benefit Organisation in terms of s18A?’ (Select ‘Y’ or ‘N’ If yes, indicate ‘How many Public Benefit Organisations did you donate to?’ The maximum value allowed is 99. 3.1.11 SOLAR ENERGY TAX CREDIT a) ‘Mark with an “X” if you want to claim a tax rebate for the installation of the solar panel(s) to a residence mainly used for domestic purposes, brought into use for the first time during the period 01 March 2023 to 29 February 2024’ Applicable to the 2024 YOA only 3.1.12 OTHER INCOME AND ALLOWABLE EXPENSES a) ‘Did you receive any other income (excluding amounts received/accrued as a beneficiary of a trust(s), or deemed to have accrued in terms of s7) and/or incur any other allowable expenses not addressed above?’ (Select ‘Y’ or ‘N’). This question will display from the 2017 to 2023 YOA. b) ‘Mark with an “X” if you received any other income (e.g. local business, trade, and professional COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 22 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 income), but excluding amounts received / accrued as a beneficiary of a trust(s), or deemed to have accrued in terms of s7) and/or incur any other allowable expenses (e.g. home office expenses) not addressed above’ This question will display from the 2024 YOA. c) The above questions refer to all other types of income not reflected on an IRP5/IT3(a) certificate. If selected, a more comprehensive list of questions will display for completion. Note: Select this field if you did not receive an IRP5/IT3(a) certificate but you want to claim medical expenses and/or retirement annuity. Where SARS has received third party data from your retirement fund or your medical scheme, this field will be defaulted to yes. Amounts received/vested in you as a beneficiary of a trust or deemed to have accrued must be declared separately in the Trust section of the return. 3.2 COMPREHENSIVE QUESTIONS 3.2.1 FOREIGN INCOME a) ‘Did you receive any foreign income apart from foreign interest and foreign dividend income and excluding foreign capital gain transactions?’ (Select ‘Y’ or ‘N’) If yes, the container for ‘Foreign Income’ and ‘Local Statement of Assets and Liabilities’ will be added to the return. Amounts received/vested in you as a beneficiary of a trust or deemed to have accrued in terms of s7 must be included for the 2016 YOA and prior. From the 2017 year of assessment onwards this information must be excluded and declared separately in the Trust section of the return. 3.2.2 CAPITAL GAIN / LOSS a) ‘Did you dispose of any local assets attracting capital gain or loss (including crypto assets)?’ (Select ‘Y’ or ‘N’). b) ‘Did you dispose of any foreign assets attracting capital gain or loss (including crypto assets)?’ (Select ‘Y’ or ‘N’) If yes to the above questions, indicate ‘How many disposals (shares to be combined as one disposal) took place?’ You must declare each disposal separately. The return makes provision for a maximum 10 local and 10 foreign disposals. If you disposed of shares (and such shares are administered by one single administrator) and you received one advice for the disposal of these shares, the disposals can (for the completion of the return purposes) be regarded as one transaction. For further detail refer to the ‘Capital Gain/Loss’ section in this guide. Amounts received/vested in you as a beneficiary of a trust or deemed to have accrued in terms of s7 must be included for the 2016 YOA and prior. From the 2017 year of assessment onwards, this information must be excluded and declared separately in the Trust section of the return. 3.2.3 PARTNERSHIPS a) ‘Are you a partner in a partnership(s)?’ (Select ‘Y’ or ‘N’). If yes, indicate ‘How many partnerships?’ (Maximum of 20 allowed). The partnership container will be added to the return. COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 23 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 3.2.4 LOCAL BUSINESS TRADE AND PROFESSIONAL INCOME (INCLUDING CRYPTO ASSETS(S)) a) ‘Did you derive income from local business trade or profession other than rental income from the letting of fixed property(ies)?’ (Select ‘Y’ or ‘N’) From the 2023 YOA, this field will be prepopulated with yes based on local business, trade or professional income information available as per SARS records. If yes indicate ‘How many separate trading activities did you carry on?’ The return makes provision for a maximum of eight trading activities to be declared. To declare more than eight trading activities, you must add the profits or the losses of similar trades and insert the total amount on the return. From the 2023 YOA, if this field is prepopulated with a value as per information available on SARS records, you will be allowed to increase the value but not decrease it. From the 2017 year of assessment, amounts received/vested in you as a beneficiary of a trust or deemed to have accrued in terms of s7 must be excluded and declared separately in the Trust section of the return. 3.2.5 LOCAL FARMING a) ‘Did you participate in any local farming operations’ (Select ‘Y’ or ‘N’) From the 2023 YOA, the above field will be prepopulated with yes based on farming income information available as per SARS records. b) ‘Did you participate in any farming partnership operations’ (Select ‘Y’ or ‘N’) From the 2023 YOA, the above field will be prepopulated with yes based on farming income information available as per SARS records. Note: From the 2024 YOA, this question will be unlocked and editable if you selected ‘Y’ for the question ‘Are you in a partnership’ b) If you did participate in farming partnership operations, indicate ‘How many farming partnership operations did you participate in?’ A maximum of 20 operations is allowed on the return. From 2024 YOA onward, the number of farming operations will be pre-populated based on the previous declaration filed by the taxpayer. You will be allowed to increase the number but not decrease it. 3.2.6 OTHER TAXABLE RECEIPTS AND ACCRUALS a) ‘Did you have any receipts and accruals not addressed by the previous questions but excluding amounts that you consider non-taxable?’ If yes, the section for ‘Other Receipts and Accruals’ will be added to the return From the 2022 YOA include amounts of remuneration from foreign employer(s) for services rendered in South Africa From the 2017 year of assessment, amounts received/vested in you as a beneficiary of a trust or deemed to have accrued in terms of s7 must be excluded and declared separately in the Trust section of the return. 3.2.7 FOREIGN TAX CREDITS a) ‘Will you be claiming any foreign tax credits in terms of s6quin (Foreign taxes on income from source within the Republic)?’ (Select ‘Y’ or ‘N’) This question will only display for the 2016 year of assessment and prior years. COMPREHENSIVE GUIDE TO THE ITR12 INCOME REVISION: 32 Page 24 of 135 TAX RETURN FOR INDIVIDUALS IT-AE-36-G05 Effective Date: 24 June 2024 If yes, the section for ‘Foreign Tax Credits’ will be added to the return. b) ‘Were any foreign tax credits refunded/discharged during the year of assessment for which a rebate/deduction was allowed during a previous year of assessment?’ (Select ‘Y’ or ‘N’). For the 2016 YOA and prior years, the section ‘Foreign Tax Credits - South African Sourced Income (already elsewhere included in this return) - s6quin’ will be added to the return. From the 2017 YOA, the section ‘Foreign Tax Credits Refunded / Discharged’ will be added to the return. 3.2.8 AMOUNTS CONSIDERED NON-TAXABLE a) ‘Did you receive any income that you consider non-taxable?’ (Select ‘Y’ or ‘N’) If yes, the ‘Amounts considered non-taxable’ section must be completed on your return. This section makes provision for the declaration of the amount that you consider exempt. For further details please refer to the section in this guide that discusses the residence basis of taxation. If you received income that should be exempt in terms of section 10(1)(o), select yes for this question. From the 2017 year of assessment, amounts received/vested in you as a beneficiary of a trust or deemed to have accrued in terms of s7 must be excluded and declared separately in the Trust section of the return. Income earned by a resident (natural person
