South Africans are expected to begin filing their annual tax returns on July 1. This process continues until November 23.
During this period, tax payers can also claim refunds from the South African Revenue Service (SARS).
If you do it right with help from a professional, you can most likely expect to receive some money back. This is true particularly if put aside some money towards your retirement fund during the tax year.
Encouraging retirment savings through tax refunds is the government’s way of saying thank you for not being a burden to the state in future.
However, you must be saving for your retirement through recognized retirement savings products such as retirement annuities, for you to qualify for such tax cash backs.
There are also other categories of people and circumstances that can qualify for a tax refund.
For instance, a South African who works from home or an independent contractor earning a commission can claim a tax back on their home/office expensense.
For this to pass, your home-office needs to meet certain requirements:
– It should be a dedicated work area that is only used for work purposes and on a regular basis.
– It should be equipped for work-related duties.
– Your work-related tasks are primary conducted at this space.
– You should have worked from this space for at least 6 months of the tax year in question.
Among the expenses you can claim are: stationery, internet bill, office equipment, portion of your rent, municipal taxes and other utility rates.
When it comes to rent, municipal taxes and utility bills, the tax rate to be refunded is determined by the size of your office relative to the size of the house. For instance, if your office space accounts for 20% of the floor space of your home, you are allowed to deduct 20% of your expenses.
How to claim a tax refund from SARS
Before you make your refund application to the SARS, it is good to have a rough estimate of what you should expect. There are several refund calculators that can help you with that.
The best way to go about claiming a refund is through consulting a tax professional. They will guide you in maximizing the amount of refund you can receive, and even help you take advantage of this provision in subsequent years by taking additional steps.
However, if you want to go about it alone, you can do this on the SARS efilling page. Chose the type of tax you want a refund for and fill the corresponding form.
SARS VAT Refund
Another tax that qualifies for a potential refund from the SARS is the Value Added Tax (VAT).
A VAT refund only applies to the acquisition of goods and not on the acquisition of services. For instance, transport and accommodation are regarded as services and therefore do not qualify.
This kind of refund is a special one, in that it is not for South African citizens, but rather foreign nationals. It can be claimed on items which they take out of the country when the total value exceeds R250.
According to the SARS, those qualify for a VAT refund include:
– Foreign diplomat;
– Foreign enterprise;
– Non-resident of the Republic;
* international organisation established in terms of a Constitutive Act, a constitution or a charter for the purposes of promoting peace and security, human and people’s rights and political and social-economic development or any similar purpose; or
* organisation which is similar to an association not for gain or welfare organisation which is registered as such in that export country
* and established in an export country and not conducting any activity in the Republic; or
* for purposes of Part Two – Section A, a person who is not a resident of the Republic who acquires goods from a vendor in the Republic with the sole purpose of selling those goods to another person who is not a resident of the Republic.
For a VAT refund to be considered, it must meet the following requirements.
/ The purchaser must be a qualifying purchaser.
/ The goods must be exported within 90 days from the date of the tax invoice subject to certain exceptions.
/ The VAT inclusive total of all movable goods purchased during a particular visit to the RSA and exported at the end of that visit by the qualifying purchaser must exceed the minimum of R250 per qualifying purchaser.
/ The request for a refund, together with the relevant documentation, must be received by the VRA within 90 days of date of export.
/ The goods must be exported through one of the 43 designated commercial ports by the qualifying purchaser or the qualifying purchaser’s cartage contractor.
/ The qualifying purchaser must submit all the relevant original documentary proof as contemplated in Part One of the Export Regulations in order to prove that the movable goods were exported by road, sea, air or rail.
The purchase must be declared to a customs official at the designated commercial port of departure from South Africa. The claim is then submitted to the VAT Refund Administrator (Pty) Ltd.