12 Jul SARS Alert: A New Tax Directive
The South African Revenue Service issued a directive on Tuesday, the 11th of July 2023, indicating that it is now mandatory for all juristic trust entities to submit tax returns on their database.
That’s right! Both trading and non-trading trusts must submit tax returns on behalf of their respective entities – in terms of Section 25 of the Tax Administration Act of 2011 (TAA) read with section 66 of the Income Tax Act, Number 58 of 1962.
What has changed?
The initial requirement was that every company, trust, or other juristic person which has the capacity to generate an income would have to declare their financial activities to SARS for that year. However, with the current directive, even the “dormant” trusts (those without the ability to generate an income) must declare all financial activities to the tax man.
Who does this directive effect?
Anyone who acts as a trustee, business advisor, or renders any other professional service to any trust or related party.
What additional documentation and/or information is required?
- The directive makes it mandatory for those who have dormant trusts but own assets, for example, shares in business entities, primary residences, lifestyle assets or vacant land, to declare all their assets accordingly.
- Financial statements in respect of assets and related settlements, donations, or dispositions by individuals MUST be disclosed.
- All trust contact details must be timeously updated. For convenience, the institution has provided a SARS External Guide for this purpose.