SARS News Update: Key Highlights November 2023

SARS GENERAL MATTERS

• Activating post-sequestration number to submit income tax returns

Learn how to activate the post-sequestration number for submitting income tax returns. A step-by-step guide is available to assist taxpayers in submitting returns for the period following sequestration. Taxpayers can access this guide by logging into their existing eFiling profiles.

• Public Benefit Organisations: a New Guide on 18A Approvals and Partial Taxation

SARS has issued a basic guide outlining the requirements for obtaining and maintaining approval to issue tax-deductible donation certificates under section 18A. The guide deals with the requirement to obtain audit certificates, how non-compliance is dealt with and the requirements for using donation receipts. Read the guide here. Additionally, Interpretation Note 24 offers further insights and examples related to partial taxation for Public Benefit Organizations.

SARS VALUE ADDED TAX (VAT)

• Handling errors by clearing agents (BRN 66)

When clearing agents submit an incorrect Customs Clearance Declaration, such as a bill of entry, it can result in inaccurately claimed input VAT on imported goods. The BRN 66 ruling addresses situations where SARS does not allow a voucher of correction (VOC). It states that the principal is entitled to deduct the VAT incurred on the total amount declared during the importation of goods, including any overpayment, to the extent that it qualifies as ‘input tax.

• Standard Turnover-based Method of Apportionment (BGR 16)

BGR 16 provides a formula for calculating the tax-deductible portion of goods or services acquired for both taxable VAT supplies and other purposes. This formula applies to financial years preceding those commencing on or after January 2024.

• Record Retention Authorisation

Taxpayers are required to retain records, books of account, and documents in accordance with the Tax Administration Act No. 28 of 2011 (TAA). Under certain circumstances, taxpayers can request authorization from SARS to deviate from these requirements, such as keeping records in a different form or at a location outside South Africa. Read the newly published external policy to clarify the requirements for taxpayers.

CUSTOMS AND EXCISE

• Customs: Advance Payment Notification (APN) number changes

Effective December 1, 2023, authorised dealers must record, validate, and report the APN provided by a trader/importer to the South African Reserve Bank (SARB) upon payment conclusion. Advance Import Payments can only be made upon confirmation of a valid SARS APN. Find more details in the updated FAQ on the SARS website.

• Customs Rule Amendments for Internal Appeals (Section 77H)

Several rule amendments have been made regarding internal appeals for section 77H of the Customs and Excise Act, focusing on the delivery and receipt of documents or communications. Review the amended rules for more information.

• Updated Valuation of Exports policy

The updated Valuation of Exports policy eliminates the requirement to upload a certificate of accreditation and notify the Client Relationship Manager for prioritizing a stopped consignment. Customs Officers will now validate the client’s accredited status on the SARS intranet for case prioritization.

• New Excise Guide: Manage eAccounts on eFiling

This new guide outlines revised processes that reflect current system functionalities. Access the guide for comprehensive information on managing eAccounts here. Additionally, find the separate guide on the registration process for eFiling and managing user profiles here

COURT RULINGS

Customs and Excise Dispute Resolution

• High Court Ruling: SARS Exemption on Non-Compliance CASE NO: 29690/14

The ruling clarifies that neither the proviso of section 75(10)(a) nor common law authorises the Commissioner to exempt non-compliance with the conditions prescribed by Rule 19A.09(c).

• High Court Ruling: Diesel Refunds – CASE NO: 81950/2019

This ruling emphasizes the importance of maintaining logbooks for each vehicle as evidence of a full audit trail. The applicant failed to provide sufficient records to substantiate its claimed diesel refund.

ISSUED FOR COMMENT

• Environmental Levy Account for Carbon Dioxide Emission Levy

Proposed changes to the DA177 account used by local motor manufacturers for carbon dioxide levy reporting. The proposal includes fields for overpayment and underpayment adjustments resulting from errors on previous accounts. Provide your input on this form via email to C&E_Legislativecomments@sars.gov.za.

Stay up to date and check in on our blogs for more updates and changes!