New Tax Season Dates for Trusts in South Africa
SARS has set the dates for tax season 2024. Individual taxpayers will receive auto assessment notices starting next month.
The tax service in South Africa has announced new filing dates for trusts, separate from individual dates.
This is a big change for taxpayers who have trusts in the country. It could be a good thing, giving trusts more time to organize their affairs.
In the past, trusts used to file in conjunction with individual taxpayers, but moving forward, they will have a distinct filing period from 16 September 2024, to 20 January 2025.
Trusts have faced a surge of compliance modifications in the past year as SARS has implemented improved compliance obligations to boost transparency and guarantee that trusts are utilized for lawful objectives.
In addition to new deadlines and a new filing period, trusts are also facing a host of new compliance obligations.
These are primarily influenced by global pressure to guarantee improved adherence of trusts, and numerous initiatives can be directly linked to South Africa's pledges and measures aimed at leaving the grey list. Additionally, these efforts aim to ensure that trust taxpayer compliance is facilitated through technology.
Significant Modifications to the Trust Tax Declaration
In 2023, significant changes were made to the trust income tax return. These changes are expected to continue in the 2024 tax season.
Trusts must now provide more detailed information in several key areas, including:
Beneficial Ownership
A significant modification is the necessity for an in-depth revelation of the trust's beneficial ownership. Trusts are now obligated to supply extensive data about persons, including beneficiaries recognized as beneficial owners.
It is essential to report this information accurately for adherence to regulations.
Income and Activities of the Trust
Trusts are now mandated to reveal extensive details about their earnings and operations. This encompasses thorough reporting on all sources of income, the character of the trust's actions, and the alignment of these actions with the trust's goals.
SARS uses this to verify that trusts are used appropriately and transparently.
IT3(t) Reporting requirements now a reality for Trusts
As part of its modernization initiatives, SARS is broadening the requirements for third-party data information. Trusts are now required to report distributions to beneficiaries on an annual basis via IT3(t) reporting.
Compulsory Upload of Supporting Documents - be Prepared
Adequate documentation is necessary to back up the information revealed in the trust income tax return that was submitted in filing season.
Given that all trust taxpayers are now mandated to upload supporting documents when submitting their tax return, it's crucial for trusts to keep precise and comprehensive supporting documents to show compliance.
This encompasses financial statements of the trust, resolutions, and any other pertinent documents that confirm the financial operations of the trust.
FINAL Tips - Ensure compliance with the following
- Keep Comprehensive Documentation saved: It's crucial to have thorough documentation of all financial activities and resolutions adopted throughout the fiscal year. These supporting papers should be easily accessible for submission to SARS as part of the tax return filing process.
- Precise and accurate Disclosure of Beneficial Ownership: Ensure that all beneficial owners are accurately reported and correspond with the beneficial ownership registry filed with the Master of the High Court.
- Thorough Documentation of Revenue and Actions: Make sure you can trace all sources of revenue and actions, correlating them with the trust's goals.
- Precise IT3(t) Form Filing: Ensure all vested or distributed amounts to trust beneficiaries are reported correctly on the IT3(t) form to evade fines.
- Keep Updated on legislation: Consistently check updates from SARS and other regulatory authorities to remain current with the most recent trust compliance obligations.
Tax obligations and the reporting requirements to South African Revenue Service have become even more complex. Legislation like the income tax act and tax administration act and the interpretation thereof also changes often making it so important to stay in good standing with SARS.
Frequently asked questions
Does SARS issue auto assessments?
Yes. SARS issues auto assessments for some individuals. Read our blog on What you need to know about SARS Auto Assessments (zeeliepasa.co.za)
When does tax season open?
Tax season 2024 opens 15 July 2024.
When does tax season close for non provisional taxpayers?
Tax season 2024 closes on 21 October 2024 for non provisional taxpayers (Individuals).
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