PREPARE FOR THE 2017 TAX SEASON

Useful information to get you going for the 2017 tax season

The tax filing season for 2017 opens 1 July 2017. During this period, the South African Revenue Services (SARS) requires you to submit your income tax return. In order to assist you in completing your tax return, we have compiled answers to a list of frequently asked questions.

What are the taxable income thresholds for individuals?

Age 64 and below R75 000
Age 65 and below 75 R116 150
Age 75 and over R129 850

What rebates are available for individuals?

Primary rebate R13 500
Secondary rebate - Age 65
and below 75
R7 407
Third rebate - Age 75
and over
R2 466

What is the meaning of Year of Assessment?

A year of assessment for taxpayers covers a period of 12 months. For individuals and trusts, the start date of the year of assessment is 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.

Who needs to register for income tax?

Everyone receiving taxable income, above the tax thresholds, is required to register for income tax.

How to register for income tax?

You will need to complete the SARS IT77 form. This is available from the SARS website (www.sars.gov.za).

Once completed, you will need to hand the form in at your local SARS branch together with the following information:

  • A certified copy of your ID, passport or driver’s license
  • Your bank details (an original statement from your bank can be used to confirm your bank details)
  • Income details for the last three years (e.g. copies of your IRP5)
  • Original proof of your residential address (e.g. your rates/electricity bill, not more than three months old)

What is an income tax return?

This is a declaration of all income earned, and expense incurred as any capital gains or losses realised in a tax year.

Who is required to submit an income tax return to SARS?

  • All Individuals whose income from one employer is greater than R350 000 for the tax year.
  • 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
    • they have deductions they want to claim (eg. medical expenses, retirement annuity contributions)
    • they have local capital gains/losses
    • People who earn below R350 000 annually are not required to submit their tax returns, however, we would suggest doing so regardless as to avoid any potential penalties.
  • Note this list is not complete. Please contact us for more information.

How do you submit an income tax return?

There are various ways, you can submit your return:

  • online via eFiling
  • using your mobile device via the SARS app
  • manually by going into a SARS branch and requesting assistance from a SARS consultant
  • by posting it to SARS
  • by placing it in the drop box at a SARS branch

The easiest and most efficient way is to submit your return directly via eFiling or the SARS app. For more information on eFiling, please visit www.sarsefiling.co.za.

What supporting documents do you need in order to complete your tax return?

  • Your banking details
  • Your IRP5/IT3(a) certificate(s)
  • Certificates that you received in respect of any investment income [IT3(b)]
  • Details of medical expenses paid by you and not covered by your medical scheme
  • Completed confirmation of diagnosis of disability form
  • Information relating to retirement annuity contributions
  • Details of business travel (if you received a travel allowance or want to claim against a fringe benefit for an employer provided vehicle)
  • Information relating to foreign tax credits withheld
  • Financial statements, if applicable e.g. business income
  • Any other relevant material relating to income you received or deductions you want to claim

What are the consequences of not submitting your income tax return by the SARS deadline?

SARS will levy a 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.

What income tax rates are applicable for the 2016/2017 tax year?

For individuals and special trusts:

Taxable Income (R) Rate of Tax (R);
0 – 188 000 18% of taxable income
188 001 – 293 600 33 840 + 26% of taxable income above 188 000
293 601 – 406 400 61 296 + 31% of taxable income above 293 600
406 401 – 550 100 96 264 + 36% of taxable income above 406 400
550 101 – 701 300 147 996 + 39% of taxable income above 550 100
701 301 and above 206 964 + 41% of taxable income above 701 300

For companies:

Type Rate of Tax
Companies 28%

For small business corporations:

Taxable Income (R) Rate of Tax (R);
0 – 75 000 0% of taxable income
75 001– 365 000 7% of taxable income above 75 000
365 001 – 550 000 20 300 + 21% of taxable income above 365 000
550 001 and above 20 300 + 21% of taxable income above 365 000

Trusts other than special trusts:

Type Rate of Tax
Trusts other than special trusts: Rate of tax 41%

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:

  • R2 million gain/loss on the disposal of a primary residence
  • Most personal use assets
  • Retirement benefits
  • Payments in respect of original long-term insurance policies
  • Annual exclusion of R40 000 capital gain or capital loss is granted to individuals and special trusts
  • 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 R10 million is disposed of
  • 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 2016/2017 tax year:

Person Inclusion rate (%) Statutory rates (%) Effective rate of tax (%)
Individual & special trust 40 0 - 41 0 - 16.4
Companies 80 28 22.4
Other trusts 80 41 32.8

What are the interest exemptions available to individuals?

  • Age 64 and below R23 800
  • Age 65 and above R34 500

What to know on Tax Free Investments

  • All returns are tax free which includes interest, dividends and gains
  • The annual contribution is limited to R30 000 per person (per tax year)
  • Effective from 1 March 2017 the annual contribution limit increased to R33 000 per person (per tax year)
  • The lifetime contribution is limited to R500 000 per person
  • If the annual or lifetime limit is exceeded, a penalty of 40% will be charged on the excess amount at time of assessment

Document Type Description
IT3(b) Certificate Your IT3(b) Certificate reports all interest, rental on immovable property, foreign dividends, property dividends and/or profit share earned, paid or accrued by yourself, where applicable, over the course of the taxyear.
IT3(c) Certificate Your IT3(c) Certificate reports gains and losses for local and offshore investments.
Dividend Statement Your Dividend Statement reports the gross and net amount you received in Dividends for the tax year as well as the applicable Dividends Tax amount that was withheld.
IT3(s) Certificate Your IT3(s) Certificate reports all contributions, withdrawals, interest, dividends and/or gains and losses on your Tax Free Investment(s) for the tax year.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
CMV Group of Companies

Tel : 012 991 4400
Fax : 012 991 3001
Physical: 17 Midas Avenue, Olympus, Pretoria, 0081
E-mail: info@cmv.co.za

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