South Africa has a residence-based income tax system which has the effect that –
• a resident’s worldwide taxable income is subject to income tax in South Africa; and
• a non-resident’s taxable income from sources within South Africa is subject to tax in
South Africa.
The South African government has entered into tax treaties with various countries, to prevent
the same income from being taxed in both countries. Should the same income be taxed in
both countries, a credit will generally be allowed in the country of residence for the tax paid in
the other country.
2.1.1 Main source of government’s income
Income tax is the government’s main source of income and is levied under the Act on the
taxable income of persons such as companies, trusts and natural persons.
2.1.2 Registration as a taxpayer
A person liable for income tax or liable to submit a return must register as a taxpayer with
SARS within 21 business days of becoming so liable.
Change of address
The TA Act requires that a taxpayer must notify SARS within 21 business days of a change
of, amongst other things, postal and physical address and electronic address used for
communication with SARS.
2.1.4 Year of assessment
A year of assessment for natural persons, deceased estates, insolvent estates and trusts
covers 12 months which commences on the first day of March of a specific year and ends on
the last day of February of the following year. Natural persons and trusts who cannot
conveniently return income from a business or profession to the last day of February may
apply at a SARS branch office for permission from the Commissioner to draw up accounts to
a closing date other than the last day of February. Any request of this nature is subject to
conditions that the Commissioner may impose. Generally, the closing date so approved will
determine in which year of assessment the results for the accounting period must be included
and the dates on which provisional tax payments must be made.
Companies are permitted to have a year of assessment ending on a date which coincides with
its financial year-end. The year of assessment for a company with a financial year-end of
30 June, will run from 1 July of a specific year to 30 June of the following year.3 Companies
are occasionally required to close their financial accounts earlier or later than the last day of
their financial year for various reasons. Companies are allowed to align reporting for tax
purposes with the period ending on the day their financial accounts are closed. A company
intending to close its financial accounts either within 10 days before or after the end of a year
of assessment must submit an application to a SARS branch office for permission to draw up
financial accounts to a closing date other than the end of its financial year. Approval by the
Commissioner does not result in a change in the company’s financial year-end and therefore
does not change its year of assessment.
2.1.5 Filing of tax returns
Income tax returns must be submitted manually or electronically by a specific date each year.
This date is published for information of the general public and is promoted by way of a filing
campaign to encourage compliance.4
2.1.6 eFiling and the South African Revenue Service MobiApp
SARS eFiling is an online process for the submission of tax returns and related functions. This
service allows individual taxpayers, tax practitioners and businesses to register, submit tax
returns, make payments and perform a number of other interactions with SARS in a secure
online environment.