SA new version of PAYE BRS published

2018 has more than lived up to expectation as a busy and significant chapter in the development of South Africa’s tax system.

We endeavour to be one step ahead and ensure that we have all the knowledge at our disposal to assist our clients.

It is important to know that as far as the country’s 2018/2019 tax year specifications are concerned, SARS has made a change to the PAYE BRS for Employer Reconciliation (August 2018 release).

The new version was published on 14 June 2018.

What does this essentially mean? The changes in the official document, highlighted in yellow, corrects the applicable year of assessment for codes 3723 and 3773 to 2018 (previously 2019).

We advise all our clients to access the new BRS – click through to SARS PAYE BRS for Employer Reconciliation (August 2018 Release) Version 17.0.1.

PAYE BRS for Employer Reconciliation version 17.0.2 was published

SARS has made a change to the PAYE BRS for Employer Reconciliation (August 2018 release). The new version was published on 10 July 2018.

The changes in the official document, noted under July 2018 of the section Revision History, amends the validation for Monthly Calculated ETI to make provision for the designated Special Economic Zones (SEZ). A list of the Special Economic Zones for ETI Purposes has been added as Appendix E in the BRS.

The SEZ’s under discussion are:

For employees who are employed by an employer in a fixed place of business within the special economic zones listed, and where the person renders services to that employer mainly within that SEZ, the age limit to determine if the employee qualifies for ETI, does not apply, which means employees of any age can qualify to generate the tax incentive for an employer.

To access the new BRS, follow the link below:

SARS PAYE BRS for Employer Reconciliation (August 2018 Release) Version 17.0.2.

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

It’s EMP501 Madness – time for Mid-Year Employer Reconciliation Declarations

It is that time of the year… and South African employers are reminded that Employer Reconciliation Declaration (or EMP501) have to be submitted to SARS.

The EMP501 is important because it confirms or corrects the PAYE, SDL and UIF declarations as per the monthly EMP201 submitted, the payments made and the tax values of the Employee Tax Certificate and ETI, if applicable.

The EMP501 submissions have two reporting periods, the interim period (which is for the transaction period 1 March to 31 August) and annual period (which is for the full tax year 1 March to 28/29 February).

The interim reconciliation was introduced in September 2010 and has now become an integral part of the Employer Reconciliation.

But why is this significant? The interim reconciliation process is intended to assist employers by:

  • Enabling an easier and more accurate annual reconciliation submission;
  • Maintaining an up-to-date employee database;
  • Registering employees for Income Tax purposes, as required.

Employers have until 31 October to submit their interim EMP501’s and until 31 May each year to submit their annual EMP501’s

In addition to these important directives, employers should also be aware that Manually completed Payroll tax delivered or posted to a SARS branch, are no longer accepted. The only exception is for employers with a maximum of five IRP5/IT3(a)s.

It is important to remember that: –

  • SARS issues new validation rules before the start of each Employer Filing season and employers must ensure the they are always using the latest version of SARS e@syFile to ensure their submissions pass the current validations.
  • Severe penalties and interest will be charged if the Reconciliation Declaration is not submitted before the deadline and if omitted and/or incomplete information is submitted.

The reconciliation process is lengthy and time-consuming. With our knowledge and years of experience coupled with all the legislative amendments published throughout the year, CRS can save you precious time and costs by assisting you with this important part of your business as an Employer.

INCOME TAX (AMENDMENT OF MONETARY AMOUNTS) REGULATIONS, 2018

Changes to the Second Schedule of the Income Tax Act 1993 (as amended) as per Income Tax (Amendment of Monetary Amounts) Regulations No. 26 of 2018 has been published on the Lesotho Revenue Authority website in May 2018.

The changes as per Legal Notice 26 of 2018 are to be effective from 1 April 2018.

Tax Rates

  • Where chargeable income is between M1.00 and M61,080.00 the tax is = 20% of the amount;
  • Where chargeable income exceeds M61,080.00 the tax = M 12,216.00 + 30% of excess over 61, 080.00

Tax Credit

The law provides for an individual to be granted a non-refundable tax credit. A tax credit is a rebate or relief granted by law to individuals who made taxable income for the year of assessment. It is directly deductible from the amount after applying the applicable marginal tax rates to the chargeable income. The non-refundable tax credit has been changed to M 7,260.00 per year.

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

SHORTER 2018 FILING SEASON

Following a draft public notice published on 9 May 2018 and the comment period which closed on 23 May, an official statement by the acting Commissioner of the South African Revenue Services (SARS), Mark Kingon, was published on Monday, 4 June.

Tax Season 2018 will be shortened by three weeks, running from 1 July to 31 October 2018. The previous deadline for non-provisional taxpayers was scheduled for the 22nd November 2018.

Employers should inform their employees that Income tax returns must be submitted within the following periods:

Note:

You do not need to submit a return if ALL the criteria below apply to you:

  • Your total employment income / salary for the year (March 2017 to February 2018) before tax (gross income) was not more than R350 000
  • You only received employment income / salary for the full year of assessment (March 2017 to February 2018) from one employer
  • You have no other form of income (e.g. car allowance, business income, taxable interest or rental income or income from another job)
  • You do not want to claim for any additional allowable tax related deductions (e.g. medical expenses, retirement annuity contributions, travel expenses, etc.).

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

CRS Technologies introduces expert insight from a senior tax advisor

As contentious as the issue may be, the reality of life for those retiring or approaching retirement in South Africa is that savings in whatever form, including a retirement fund lump sum and tax-free investments are taxable. But forewarned is forearmed says Gerhard Linde, Senior Tax Consultant for CRS Technologies.

CRS Technologies is a trusted solutions and services provider within the HR and Human Capital Management (HCM) market.

The company’s core focus is to introduce solutions that enhance people management in business by guiding decision makers through legislation, regulation, technical requirements and tech innovation that characterise HR and HCM today.

Linde says it’s always best to start at the beginning, in this case with a clear understanding of concepts and their relevance.

“A person who is or was a member of a retirement fund becomes entitled to a lump sum benefit when his or her membership of that retirement fund terminates. The taxable portion of the lump sum benefit is determined under provisions of the Second Schedule of the Income Tax Act No 58 of 1962, which takes into account certain allowable deductions,” says Linde.

Once determined under the Second Schedule the taxable portion of the lump sum benefit is included in the taxpayer’s gross income and is subject to the rates of tax applicable to lump sum benefits.

A lump sum benefit is any amount payable to a member or former member of a retirement fund in consequence of his or her membership or past membership in that specific retirement fund.

“There are retirement fund lump sum withdrawal benefits that one has to be cognisant of – that is the amount that becomes payable when a member terminates his or her membership in that retirement fund before reaching retirement age – for any reason other than retirement, death or retrenchment,” Linde continues.

Once the taxable portion of a retirement fund lump sum withdrawal benefit has been determined under the Second Schedule of the Act, the tax thereon will be calculated by applying the tax table applicable to retirement fund lump sum withdrawal benefits.

Linde explains that tax relief of R500 000 on retirement lump sum benefits is allocated once in a lifetime – “in other words when it is used up you cannot claim it again. For example, if a person used R300 000 of the R500 000 with the first lump sum, the balance left is R200 000 and once this is used up this relief is not available again.”

Tax Free Investments were introduced as an incentive to encourage household savings and can provide some tax relief on retirement savings by first exploring the tax free investment option.

This incentive is available as of from 1 March 2015.

“The way this works is you don’t have to pay income tax, dividends tax or capital gains tax on the returns from these investments, you can only contribute a maximum of R33 000 per year. Moreover there is a lifetime limit of R500 000 per person … if a person exceeds the limits, there is a 40% penalty of the excess amount…. The above information merely provides an informative overview on the workings of the discussed topics and should

be treated as such, furthermore it should not to be seen as the full extent of the tax consequences of these topics,” Linde adds.

 

I have been encouraged to see a bit more of an upbeat and optimistic attitude in the business sector lately. Reflecting a slower inflation rate last month, the economy seems a little more settled which is great news as, behind the scenes, CRS is embarking on some fairly aggressive business development plans. For now, the only titbit I can offer you is, “Watch this space…!” But focusing on the things we can talk about, by now you will have seen our new-look software which has been well received and, thankfully, launched without any problems. Many thanks for the great reviews! Should you need any assistance with the new interface please log a support request and a consultant will be in touch as soon as possible.

I’d like to draw your attention to the need for a solid understanding of the intricacies of the COID Act and the processes for workplace claims relating to occupational injuries. CRS recently held a
very successful workshop on workplace injury and compensation, with a good cross section of clients from a number of industries present. While there was a lot of extremely valuable crosssector
knowledge sharing, it did highlight an ongoing lack of general awareness about COID claims, specifically a lack of knowledge that there are different criteria for different sectors. And, as with all legislation, this is constantly changing so one needs to remain current on the Act throughout the year. Due to the success of the workshop, we are considering hosting similar events in the future. So if you are keen to attend, drop us a line and we’ll let you know as soon as we have dates in place.

Below is a very interesting interview with one of Deloitte’s HR leaders, delving into a few considerations of the modern work environment, including flexibility. As a leader at CRS, I myself strive to create a flexible work environment as I believe HR has become output-based rather than input-based. Employees are far more effective when they have a blended and balanced work / life scenario. If one needs to handle personal matters at the office or if work gets done from home or another remote location, as long as the output is there, does the ‘how’ and ‘where’ really matter? We’re going to see more and more flexibility coming into employment contracts so HR leaders need to get onboard with this now and formulate a company policy that is viable for the nature of the business.

As our peers overseas have been getting to grips with their new privacy laws and GDPR, the topic of privacy and security cropped up again closer to home. I cannot emphasise enough the need to instill in employees the need to take online security extremely seriously. One can invest in the most advanced anti virus systems and firewalls but the first line of defence is only as strong as the person deleting the dodgy email loaded with suspicious links and avoiding suspicious websites. Bear in mind that threats now also come in the form of phone calls with people urging you to perform certain steps online or asking for remote access of your system to ’fix’ problems, so all the more reason to kill those cold calls in the first few seconds! Spend some time on refresher training with your employees this month and make this a part of your onboarding training too. The risk is simply not worth it.

Lastly, with EMP501 madness behind us, here’s hoping you all made it through unscathed. Our consultants have been flat out with support requests in the last couple of weeks so we hope that we’ve been able to add value and the process has been a lot less painful for you! Do drop me a line if you’d like to share your feedback.

Have a great month
Ian McAlister

In as much as we are cognisant of the changes in South African labour law and feel passionate about the impact regulation has on business, we are just as acutely aware of changes to HR and labour law practices beyond South Africa’s borders… so, we want employers to be aware that Tanzania’s government had signed into law the Public Service Social Security Act, 2018, hereinafter referred to as the PSSS Act, which joins all pension funds into two major entities.

The immediate implication is that the entire labour force in both the public and private sectors will be served by the Public Service Social Security Fund (PSSSF)and the National Social Security Fund (NSSF).

What does this mean to business owners in Tanzania? Currently there are five social security funds in the country: the National Social Security Fund (NSSF), PPF Pension Fund, Public Service Pension Fund (PSPF), Local Authorities Pension Fund (LAPF) and Government Employees Provident Fund (GEPF).

Because of the new PSSS Act, the Public Service Retirement Benefit Act Cap 371, the LAPF Pensions Fund Act Cap 407, the GEPF Retirement Benefits Fund Act Cap 51 and the PPF Pensions Fund Act Cap 372 will be repealed.

It is important for employers to know that a member who changes employment from the public sector to employment in the private sector’s membership will be transferred to the National Social Security Fund, and all employees in the public sector who are members of the National Social Security Fund will be transferred to the PSSS Fund.

The new Act has also introduced two new benefits which were not granted earlier by the Pension Funds. These are Survivor Benefits and Unemployment benefits.

Survivors benefits would be paid to the Dependents of the deceased (widow, children or parents of the deceased).

The Act also specified retirement age as 60 years for compulsory retirement and 55 years for voluntary retirement.

Tanzania is gaining impetus as a progressive market that is slowly but surely working towards becoming a knowledge-based economy.

Skills and labour are at the heart of this growth trajectory.

We will continue to keep a close eye on developments in this exciting market.