Tax refund season in South Africa is generally a joyful time of the year where taxpayers receive a payment from SARS due to the taxpayer having paid more tax than what they owed.
Although many see a tax refund as a bonus, it is essentially a loan made to the government, interest-free. Ouch.
We have put together a list of questions below that will help you to understand tax refunds in South Africa.
Who qualifies for a tax refund?
A tax refund can only be claimed by a registered taxpayer who files an annual tax return.
If you are registered for income tax, you will be required to submit an annual income tax return.
If you are not registered for income tax, but earn more than the tax threshold for this year, you will be liable to register for income tax and receive a tax number. Additionally, if you have other sources of income (investment interest or rental income) and deductions that you want to claim (medical expenses, travel, retirement annuities etc), then you will also need to submit a tax return.
The tax threshold is set for each year and is usually announced in the Finance Minister’s Budget.
What Should I Know About The SARS Auto-Assessment?
The auto-assessment that some taxpayers will receive from SARS is calculated based on the data they collect from employers, medical aid schemes, retirement annuity funds and other 3rd party data providers. However, SARS would not have received all of your up to date tax certificates. Additionally, you will not be able to claim certain deductions such as medical expenses, travel expenses, charity donations and more. Therefore, we don’t recommend accepting the auto-assessment should you receive it.
Who Should I Approach To Help With My Refund?
Our qualified, expert team at Taxleaders offer tax refund services. Additionally, we offer assistance and management of all other SARS related services.
How Long Does It Take For My Tax Refund To Reflect In My Account?
Tax refunds take 72 hours. Provided your banking details are correct.
What Should I Do With My Tax Refund?
We always recommend being sensible with your tax refund and using it towards reducing debt, top up your emergency saving account, put it towards your retirement, home improvements or maintenance, invest it (whether in education, your children’s future or in the stock market).
We are specialists in taxation, payroll services, and can assist with all tax related queries, including tax refunds. We have over 30 years of experience in the financial industry. We assist clients across South Africa with tax related services.