IMPORTANT: SARS NEW AUTO-ASSESSMENTS

In its attempt to mitigate the losses to the national fiscus as a result of the effects of Covid-19, SARS will now be introducing "Auto-Assessments". In essence, this is a "proposed [tax] assessment without the need to file a tax return", according to SARS. What this means, is that SARS will now source financial history from third parties such as banks, employers, financial service providers and companies that administer retirement funds and pension schemes, as well as medical aid savings and insurances schemes, to generate your assessment. The tax payer will then have the option to edit their return as of 1 September 2020 until 16 November 2020, where they will be able to disagree with the SARS auto-assessment.

The Auto-Assessment Process

1. Employers and Third Parties submit the required data and information to SARS by end of May 2020;

2. SARS uses this data to determine who can be auto-assessed;

3. Taxpayer logs onto eFiling or SARS MobiApp to either accept or disagree the auto-assessment;

4. Refunds due are processed and paid out to a valid bank account;

5. Those who have disagreed to the auto-assessment must edit the return by supplying the proper or missing information and resubmit between 1 September 2020 and 16 November 2020.

Why expats must pay specific attention to these provisions

Expats who work for foreign companies should not rely on auto-assessments. Missing information is an automatic SARS trigger. Foreign companies would not have an IRP5 and therefore, SARS will not be able to draw a complete assessment history. Ultimately, the responsibility lies with the taxpayer. It might actually be quite alarming to SARS should an expat blindly accept an auto-assessment.

Your tax history

When SARS begins an audit, they expect the taxpayer to submit the necessary information. This can date back as far as 5 (five) years before the year of current assessment. The Tax Administration Act, allows SARS to disregard the principle of prescription where an amount has not been assessed for tax as a result of fraud, misrepresentation or non-disclosure of material facts. SARS has a Voluntary Disclosure Programme which allows you to declare information you might have omitted due to a genuine mistake or non-compliance. It is the only means by which you are able to avoid prosecution. With Banks, and other third party institutions assisting SARS in their audits, there is no problem for SARS to simply access your financial history and fill in the blanks for you.

THE TAKE AWAY FROM THIS BLOG

1. Understanding the auto-assessment process

2. You cannot fool SARS.

3. Expats MUST NOT blindly accept auto-assessments. It will raise flags. Always check and fill in the blanks.

4. SARS now relies on third parties to collect, collate and store their data. SARS will be able to backdate financial records to 5(five) kills.

#SARS #MIAttorneys #expat #autoassessment