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Hi Fred<\/p>\n
The launch of Tax Season 2023 has shown that the South African Revenue Service (SARS) has wealthy taxpayers squarely in its crosshairs, with the taxman having some big questions for any individuals worth more than R50 million.<\/p>\n
According to Tax Consulting SA, this shows that the revenue service is upholding its commitment to keep a close eye on high-net-worth (HNW) taxpayers.<\/p>\n
\u201cWhere you are worth more than R50 million, SARS asks in the 2023 tax return season for extremely detailed information,\u201d the group said.<\/p>\n
\u201cThe compulsory declaration of all South African and International assets and liabilities in the 2023 tax return is just the start \u2013 and the process goes far beyond what is just in your name. SARS knows that wealthy taxpayers very often use structures, so this is obviously caught by their 2023 tax return questions.\u201d<\/p>\n
Tax Consulting said that this \u201cheralds a new dawn\u201d for rich South Africans or someone looking to create sustainable wealth in the country.<\/p>\n
\u201cA multi-faceted tax compliance strategy will be important to protect against not giving Cesar more than what is due, as the wealthy is clearly part of the plan to fill the tax collection coffers,\u201d it said.<\/p>\n
While this may come as a surprise to some, this additional step for HNWs filing their tax returns has been in the works for some time. During the 2022 Budget Review, the National Treasury and SARS announced that this special disclosure requirement will be imposed for taxpayers with assets above R50 million from the opening of the 2023 filing season.<\/p>\n
According to National Treasury and SARS, this would assist with the detection of non-compliance or fraud through the existence of \u201cunexplained wealth\u201d.<\/p>\n
\u201cPertinently, this additional information would also help in determining the levels and structure of wealth holdings as recommended by the Davis Tax Committee,\u201d Tax Consulting said.<\/p>\n
SARS has confirmed these requirements on its \u201cTax Season\u201d webpage, which confirms that taxpayers with business interests are required to declare their assets and liabilities (at cost) in their tax returns each year. Taxpayers who fall within this category, and with assets above R50 million, are further required to declare specified assets at market values on their 2023 tax returns.<\/p>\n
With SARS now focusing heavily on HNW taxpayer declarations, they have now added a formal tick box on the individual Income Tax Return form for the 2023 tax year. The process starts with a rather inconspicuous question reading: \u201cMark with an \u201cX\u201d if you have assets in excess of R50 million\u201d.<\/p>\n
\u201cThis amendment only solidifies the notion shared by many tax practitioners that SARS seems to be casting a wide \u2018catch-all\u2019 net to eradicate non-compliance at all levels \u2013 but especially the wealthiest level,\u201d Tax Consulting said.<\/p>\n
These changes place HNW taxpayers at a critical juncture, as SARS wants to unearth everything to do with their assets and liabilities, immediately.<\/p>\n
\u201cFurther, this information will be checked against a risk matrix which is not too dissimilar from what leading professional tax practices already perform for their affluent and sensitive clientele, as part of their own \u2018diagnostic\u2019 processes.<\/p>\n
Tax Consulting said that all HNW taxpayers in the country should simply accept that SARS will investigate them at some stage, and the disclosures made in 2023 must have a great degree of care, with that future reality in mind.<\/p>\n","protected":false},"excerpt":{"rendered":"
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