Third Party Tax Requirements - SME's Take Note
In an article on www.moneywebtax.co.za, Marty Santana, Tax Director at BDO believes that many SME's will be caught unawares by third-party tax requirements. Although SARS gazetted the new regulations and posted information on its website, very little has been done to inform affected SMEs or their industry bodies about the coming changes, says Santana. The requirement to submit third-party returns falls under the Tax Administration Act and affects eight categories of individuals or organizations, including banks, other financial institutions, medical schemes, listed companies and the SA Postbank. Also affected is anyone who purchases livestock, produce, timber, ore mineral or precious stones from a primary producer other than on a retail basis. Also included are attorneys, estate agents and anyone else who pays to or receives on behalf of third parties any investment, interest or rental of property income. The new regulations compel them all to submit twice-yearly IT3 returns containing the names, identity numbers and physical and postal addresses, among other things, of certain third parties they do business with.
Although the first filing date was 31 May 2013 it was then postponed to 28 June 2013 but the postponement is unlikely to be enough for affected SMEs. While the third-party returns are a way of cross-checking that the income taxpayers disclosure is correct and could be beneficial in the long run, says Santana, SARS has pushed the changes through too quickly and with so many mandatory fields to be completed on the IT3 forms, the availability of information and the additional administrative burden will be a challenge to SME's.
For more information visit www.taxtalkblog.com or www.bdo.co.za