TRUST FILING SEASON AND COMPANY TAX RETURNS

TRUST FILING SEASON AND COMPANY TAX RETURNS

  1. Trusts Filing Season Now Open: Key Changes for 2024

    The South African Revenue Service (SARS) has officially opened the 2024 filing season for trusts. The filing period for both provisional and non-provisional taxpayers run from 16 September 2024 to 20 January 2025.  Below are some of the key enhancements introduced this year based on Income Tax and form changes that taxpayers should be aware of.


    Key Enhancements for Trusts Filing

    1. Renewable Energy Tax Incentive: SARS has temporarily enhanced the deduction for certain machinery, plant, implements, utensils, and articles used in renewable energy production under section 12B of the Income Tax Act. This enhancement aims to boost private investment in renewable energy.
    2. Urban Development Zone (UDZ) Tax Incentive:  The UDZ tax incentive has been extended by two years, moving its sunset date from 31 March 2023 to 31 March 2025.
    3. Loans to Trusts:  Clarifications have been made concerning loans, advances, or credit granted to trusts by connected persons.  This includes clear rules on the exclusion for acquiring or improving a primary residence, including the land on which the property is situated.
    4. Public Officer:  A new question in the trust return form wizard requires confirmation that the appointed trustee has not been disqualified.
    5. Donations:  The form has been updated to allow taxpayers to declare up to 20 approved organisations that the trust has donated to.
    6. Request for Reduced Assessment (RRA02):  A new feature has been introduced allowing companies and trusts to request a reduced assessment under section 93 of the Tax Administration Act (TAA). Taxpayers will need to complete the RRA02 form to determine eligibility.
    7. Beneficial Ownership:  Clarifications have been added to assist in completing information for unnamed beneficiaries.



    For more details on the income tax return for trusts, taxpayers can view the ITR12T prototype.

    Updated Guides

    Several SARS guides have been updated to assist taxpayers in navigating these changes:

  2. Trust Verification Enhancements

    SARS has introduced improvements to the verification process for trusts. If a trust’s ITR12T return is selected for verification and the required supporting documents are not submitted within the specified period, SARS may issue a revised estimated assessment in terms of section 95(1)(c) of the Tax Administration Act.Key points:
    • Taxpayers will receive a Notice of Assessment (ITA34) if their assessment is adjusted.
    • Supporting documents must be submitted within 40 business days from the date of the adjusted assessment.  Taxpayers can request an extension if they provide reasonable grounds.
    • Failure to provide the required documentation will result in the estimated assessment becoming final, with no opportunity for objection or appeal.

    For more information on the verification process, see the Trust Verification Enhancement page.

  3. Corporate Income Tax Changes for 2024

    In addition to trust-related updates, SARS has introduced several changes for corporate taxpayers, effective from 16 September 2024. Notable enhancements include:
    1. Tax Treatment of Government Grants:  Assets acquired through government grants are not eligible for wear and tear deductions, and if the grant is used to acquire another asset, that asset also cannot be depreciated for tax purposes.
    2. Credit Agreements and Debtors Allowance:  A new field has been added for “Credit agreement and debtors’ allowance (lay-by)” in the ITR14 return. This allowance is claimable in the current year but must be reversed in the following year.
    3. Learnership Agreements:  A deduction for learnership agreements will only be allowed if the agreement was entered into before 1 April 2024.  Taxpayers must declare this in the updated ITR14 form.
    4. Research and Development (R&D) Tax Incentive:  A new question will be added to the ITR14 return to ensure taxpayers confirm that their incentive approval has not been withdrawn by the Department of Science and Innovation.
    5. Interest Expense Limitation:  In line with section 11G, interest expenses must be limited to non-trading interest income.  An adjustment field will be added to ensure compliance.
    6. Renewable Energy Tax Deduction:  The ITR14 return now allows taxpayers to claim an enhanced deduction of 125% for certain machinery used in renewable energy production under section 12BA.
    7. UDZ Tax Incentive Extension:  The Urban Development Zone (UDZ) tax incentive has been extended to 31 March 2025.
    8. Request for Reduced Assessment (RRA02):  Similar to the trusts, corporate taxpayers can now use the RRA02 form to request a reduced assessment.

     
    For more information, visit the Corporate Income Tax webpage.

    Updated Corporate Income Tax Guides

    SARS has also released updated guides to assist corporate taxpayers:

If you have any enquiries, please do not hesitate to contact Adri Britz at abritz@fhbc.co.za