Days of not declaring investment income are numbered

2012-04-19 00:00

THE South African Revenue Service (SARS) is constantly striving to ensure the completeness and accuracy of information received in respect of annual income tax returns submitted by individuals and other entities.

Another step in this direction is the new requirement for reporting institutions to furnish biannual returns in respect of money invested and interest accrued to or in favour of any person from the reporting institutions.

This disclosure requirement is for the 2013 year of assessment.

The requirement was formalised in a notice in the Government Gazette on February 29, 2012.

All banks and financial institutions, companies listed on the JSE or organs of state that issue bonds, debentures or similar financial instruments will be required to submit these returns. The returns will cover the following periods:

• March 1, 2012, to August 31, 2012, to be submitted by October 31, 2012;

• March 1, 2012, to February 28, 2013, to be submitted by May 31, 2013.

These returns are required to be submitted electronically to SARS.

The following types of information needs to be disclosed on the return for natural persons: name and surname, address, identity/passport number, tax reference number, account number, date account was opened, closing balance at the end of the period, interest received or accrued, an indicator of account verification status in terms of Financial Intelligence Centre Act, 2001 (Fica).

Companies and trusts receiving investment income would have the same requirements as a natural person except that reference numbers issued by the Companies and Intellectual Property Commission (CIPC) for companies and close corporations and the master of the high court for trusts would be required.

It is expected that taxpayer’s income tax return on e-filing will then be pre-populated with the investment income accrued for the year of assessment.

Taxpayers would be required to check that the information reflected corresponds with the information (IT3[b] certificates) received from the financial institutions.

Based on the above, the days of not declaring investment income from reporting institutions on the tax returns are numbered.

Arising from the disclosure process, taxpayers who previously did not disclose or under-declared investment income may be have their prior years of assessment queried.

Alison WalneTax Consultant

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