By Monique Vanek (Moneywebtax)
Executive summary (SAIT Technical)
SARS is targeting estate agents who have entered into transactions will lawyers and property sellers to avoid paying tax, as well as realtors who are not registered as taxpayers or under-declaring their income. Every person who earns a portion of the commission must declare that commission to SARS. SARS will use all data that is available to ensure that all persons liable for taxation are paying their rightful portion of tax.
The South African Revenue Service (Sars) is fast closing the door on estate agents, who have done under the table transactions with lawyers and property sellers to avoid paying tax. It is also shutting the door on realtors who are not registered as taxpayers or under-declaring.
On October 1 it became a requirement for estate agents to fill in their details and tax number on transfer duty (TD) forms.
"Every person who earns a portion of the commission must declare that revenue to Sars and which revenue becomes taxable. Each and every agent who earns a split of the commission must supply their income tax number, to be captured on the TD [transfer duty] forms for transfer duty purposes," said Melanie Coetzee of Smith Tabata Buchanan Boyes.
This is to ensure that all persons make accurate declarations on their income tax returns, says Mark Kingon, general manager for operations support at Sars.
"The field however is only required if an agent was used in the transaction and the field is therefore an optional field.
"We do not hold the transfer duty receipt back if the tax affairs of all parties, including the agent, are not up to date," he added.
Asked if Sars is superseding the law as transfer duty submissions are made in terms of the Transfer Duty Act and not in terms of the Income Tax Act, Kingon responded: "Section 14 of the Transfer Duty Act sets out that the declaration for transfer duty must be in such form and manner as prescribed by the Commissioner and further states that a declaration can be required from the agent...
"The objective of Sars as set out in terms of section 3 of the Sars Act is the efficient and effective collection of revenue. Section 4 sets out the functions to achieve its objective. Section 4(1)(a) states: ‘To achieve its objective Sars must- (a) secure the efficient and effective, and widest possible enforcement of the national legislation listed in Schedule I'.
"Sars does and will use all data that is available to ensure that all persons liable for taxation are paying their rightful portion of tax.
"Any objection to such a requirement would seem to indicate that we should condone the non-declaration of the commission earned".
Sars has also introduced a new transfer duty e-filing system.
On this Kingon said "We have had an electronic payment system for some time, we have been working with the legal fraternity in developing a more modernised version", which was piloted for about a year.
This system is now available to everyone and the time has come for everyone to utilise it, he added.
The system has reduced the amount of forms that need to be completed, notes Kingon. "Previously five different forms had to be filled in, now we have one, which is far better for the management of transfer duty," he adds.