Must landlords supply tenants with IT3(b)’s for interest on rental deposits?
17 June 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: I understand
that as from February 2015 SARS require landlords to supply tenants with IT3(b)
certificates for interest paid on rental deposits. Are you able to confirm that
this is correct?
If so, what is the correct procedure/process?
A: You mention
‘as from February 2015’ – please note that this not a new requirement. What changed was that, in terms of the public
notice issued on 5 April 2013, the returns of information to must be submitted
by third parties in terms of section 26 of the Act:
2.10 Any person, who for their own account carries on the
business as an estate agent as defined in the Estate Agency Affairs Act, 1976,
and who pays to, or receives on behalf of, a third party, any amount in respect
of an investment, interest or the rental of property; and
2.11 Any person, who for their own account practices as an
attorney as defined in section 1 of the Attorneys Act, 1979, and who pays to or
receives on behalf of a third party any amount in respect of an investment,
interest or the rental of property.
If the landlord is not one of the parties listed it is not
necessary to file the return – see also the SARS guide at http://www.sars.gov.za/AllDocs/OpsDocs/Guides/GEN-ENR-01-G03%20-%20Guide%20to%20Third%20Party%20Data%20IT3%20submission%20via%20eFiling%20-%20External%20Guide.pdf
Section 69 of the Income Tax Act that required that IT3(b)'s
be issued. It was then deleted by the
Tax Administration Act. Section 26 of
the Tax Administration Act provides that "the Commissioner may by public notice
require a person who employs, pays amounts to, receives amounts on behalf of or
otherwise transacts with another person, or has control over assets of another
person, to submit a return with the required information in the prescribed form
and manner and by the date specified in the notice.”
This doesn’t include the landlord; the notice is also limited
to the person who receives amounts on behalf of another person.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.