We have a client who is in the process of financially immigrating. They may have to resubmit some of their tax returns due to not having supplied us with certain information whilst they were already living abroad. Will we be able to resubmit their tax ret
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
It is true that, see section 99(2)(d)(iii) of the Tax Administration Act, the section 99(1) prescription period “does not apply to the extent that it is necessary to give effect to an assessment referred to in section 93(1)(d) if SARS becomes aware of the error referred to in that subsection before expiry of the period for the assessment under subsection (1).”
In the case of an original assessment by SARS, it is in fact three years after the date of assessment. The section 93-request is a request for a reduced assessment and in fact requires SARS to be satisfied that there is a readily apparent undisputed error in the assessment by—
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SARS; or
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the taxpayer in a return.
The period within which the section 93-request must be made, and the period within which an objection must be lodged, starts at the time the assessment was made. The timing of the submission of the return is in terms of the annual notice.
SARS, at the link below, sets out what is required for the request for the taxpayer’s compliance status on emigration.
https://www.sars.gov.za/ClientSegments/Individuals/TCS/Pages/Supporting-Docs-for-Emig.aspx
When you apply for a Tax Compliance Status (TCS) in respect of emigration, you are required to submit the following supporting documents.
For a new Tax Compliance Status (TCS) application:
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Where the TCS application is for a first time emigrant:
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Statement of assets and liabilities for the previous three tax years (this should include disclosure of all investments, loan accounts and distributions from local and foreign companies, trusts, etc.)
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A certified copy of the final application form ‘Request for settling in allowance”(MP336(b)) submitted to a foreign exchange dealer; or
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Where the authorised dealer (e.g. bank) informed you not to complete the MP336(b), the authorised dealer must provide a letter stating the reason(s) why the MP336(b) should not be completed.
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In case where you emigrated without formalising your emigration with South African Reserve Bank (SARB) or have emigrated a very long time ago and as such have no assets and liabilities in South Africa (Nil assets and liabilities declared on the MP336(b)), a Nil Statement of assets and liabilities for the previous three tax years must be submitted.
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Applicable Power of Attorney where the TCS application is submitted by a person other than the taxpayer.
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Capital Gains Tax calculation on the deemed disposal of assets on the day before the taxpayer cease to be a resident.
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This is applicable where amounts are included under listed and unlisted investments as well as other assets (e.g. Kruger Coins).
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Where the applicant is a member of a pension, provident or retirement annuity fund, the following particulars in respect of each fund must be submitted on a separate sheet:
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Name of fund;
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Expected lump sum amount to be paid out; and
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Date of expected payment.
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Where the applicant is a member of a pension, provident or retirement annuity fund, the following particulars in respect of each fund must be submitted on a separate sheet:
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Name of fund;
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Expected lump sum amount to be paid out; and
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Date of expected payment.
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Where the applicant has a South African insurance policy, the following particulars in respect of each South African insurance policy the taxpayer own must be submitted on a separate sheet:
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Name of insurance company;
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Address of insurance company;
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Policy number;
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Date on which any benefits from the policy are expected; and
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Particulars of expected future benefits from such policy.
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Where the applicant, wife or minor children are beneficiary of a trust, the following particulars must be submitted on a separate sheet:
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Name of the trust;
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Income tax reference number of the trust;
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Name(s) of the trustee(s);
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Postal address of the trust;
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Business address of the trust;
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Nature of income received from the trust and the annual amount thereof;
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Date on which you first received income from the trust;
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Monthly or yearly amount received from the trust.
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Where the applicant, spouse or minor children are the shareholder(s) of a private company or member(s) of a close corporation, the following particulars must be submitted on a separate sheet:
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Name the private company/close corporation;
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Income tax reference number of private company/close corporation;
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Number of shares/percentage of interest;
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Postal address of private company/close corporation; and
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Business address of private company/close corporation.
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In case of a family unit, if the spouse wishes to be issued with a separate TCS in order to formalise his/her emigration, then the spouse must do the following:
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Complete a separate TCR01 - Tax Compliance Request form
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Submit a certified copy of the final application form ‘Request for settling in allowance MP336(b) submitted to a foreign exchange dealer (NOT a copy of the MP336(b) submitted by the husband/life partner); and
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Submit the supporting documents in support of her application.
Note: The above will not apply where the family unit is emigrating together and the details of the spouse are captured in the TCR01. In this event, the TCC for the applicant will include the details of the spouse (that is, names and tax reference number (if applicable)).