FAQ - November 28
28 November 2013
Posted by: Author: SAIT Technical
Author: SAIT Technical
1. Request to advise if the foreign income is exempt in full or apportioned
My client works on a vessel out at sea and earns Euros. No tax is deducted from this income. He was out of the country for 246 days of the 2013 tax period. Is this income exempt in full according to Sec 10(1)(o)? The client is a tax resident in South Africa and if the full portion of his income is exempt it means that he pays no tax on this income. Can SARS apportion the income according to the number of days that he is in the country? For example if he earns R 1 mil and is out of the country for 246 of the 365 days then 67% of his income is exempt and SARS can tax him on the R 326 027.00?
The exemption in terms of s 10(1)(o)(i) will only apply to that part of your clients "remuneration” which is attributable to foreign services and therefore "remuneration” received by your client for services rendered in the Republic during the relevant year of assessment will not be exempt from tax. Therefore one has to distinguish between remuneration attributable to foreign services and remuneration received for services rendered in the Republic. Where the requirements of section 10(1)(o)(i), outside the Republic for more than 183 days in aggregate, during the year of assessment etc. are met, the remuneration earned in respect of employment on board the ship will be exempt from tax and will not be apportioned.
Kindly also see SARS IN 34 and example 3 on page 10 in this regard.
2. Address on full tax invoice
The "ADDRESS" of both the Supplier & Recipient must appear on a proper Tax-Invoice. The question I have is: Do I have a choice in stating either the PHYSICAL ADDRESS or POSTAL ADDRESS ?
As per the VAT 404 guide, the physical address from where the business is conducted must be reflected and not the post office box number of the business or the residential address of the business owner (unless this information is included in addition to the physical address of the business).
3. Client sold house in Year of Assessment but was not mentioned in tax return
I submitted my client's return for 2012 without declaring the disposal of her private residence. How do I go about to "correct" the ommission. Can I do it on e-filing by requesting a correction for the 2012 return?
You may submit a request for correction (RFC) of the return to SARS in this regard.
REQUEST FOR CORRECTION (RFC)
The Request for Correction process will allow the taxpayers/vendors to have the ability to revise a previously submitted declaration for:
You can submit a Request for Correction in respect of individual income tax returns (ITR12 and IRP6) or for companies and close corporations (IT14), if you made a mistake and want to make a correction.eFilers will be able to log onto their eFiling profile, open the latest version of the Return of Income, and view the data for the specific year of assessment.
Select "Returns” and then select "Returns Issued”. Under Returns History – select then the "IT14/ITR12TR/IT12EI” under Returns History. Click on "Open” to access relevant return and at the bottom of the page, select "Request Correction” to revise and complete the assessment.Once all the required fields have been captured - select the "File” button to submit the revised return.
The Request for Correction (RFC) will be available through the following channels:
- eFiling – this channel can be used by eFilers to request, complete and submit the correction.
- SARS Branch Office - it will be available at your local branch for completion and submission.
- Phoning the SARS Contact Centre on 0800 00 SARS (7277).