Port Shepstone Stakeholder Meeting

29 September 2011

SARS Port Shepstone

1. OPENING AND WELCOME
The attendees were welcomed and thanked for making time to come to the meeting. The Branch Manager, Wandisa Madyibi (WM), commented on the welcome increase in the number of ladies in attendance today. Given that time is money, we are very grateful to everyone for attending the meeting.
2. APOLOGIES
Various apologies were noted and minutes will be sent to all attendees and non- attendees
ATTENDEES
TAX PRACTITIONERS
Lance LevinMike Winson
Willie RushGavin Rielly
Karen HumeTrevor Labuschagne
Dave ParryCris Nash
Gary MoodleySiddique Khamissa
Gary HolburnDebbie Buchanan
Saras NaiduArshud Shaik
Shannon WaltonMike Gird
Don SmithImmaculate (Nayem Hassan)
Erich BuhrDiana Maple
Farouk Engar
SARS
Wandisa Madyibi Branch Manager Port Shepstone
Ian Butler (IB)Team Leader Port Shepstone
Vincent LushabaTeam Member Port Shepstone
Nomhle BhenguInterfile Consultant
3. MINUTES OF THE PREVIOUS MEETING
Apologies for the late distribution of Minutes of the Previous Meeting. Any issue relating to these minutes should be forwarded to Ian Butler (IB) for follow-up.
4. MATTERS ARISING FROM PREVIOUS MEETING (23 June 2011)
4.1 VAT Risk Engine – a second level of refund verification is now in place. No notification will be given that the refund has been stopped for further verification.
4.2 Tax Clearances – the old limit of R2500 outstanding over all taxes has been reduced to R100.
4.3VAT Refunds and Interest on Refunds – refunds should be paid out within 21 working days of submission except under certain circumstances. It is the vendors responsibility to follow up on their refunds and if the refunds are not paid out within that time, then it is up to the vendor to request interest on the refund – SARS systems will not programmatically pay out interest.
4.4VAT Debit Orders – automated payments through eFiling are not considered debit orders.
5. NEW MATTERS
5.1Modernisation and Systems Update
Farming Tax returns
Currently there are no specific plans on the table to change the farming section. SARS can however consider changes for 2012 but then SARS needs to understand exactly what the problem is regarding the current format of the farming section. In other words we would consider suggestions in this regard.
CODE 3616 – Independent contractors
In these cases an IRP5 has been issued but expenses need to be claimed. In order to allow the expenses the trading schedule must be opened and under the line item insert the income and the expenses can then also be claimed. There is a rule built in that will disregard the IRP5 income (i.e. it will not be taxed twice). The tax calculator will not calculate this correctly (too many complex rules), however the assessment will be correct.
Income Tax refunds
Confirmed with Susan Kruger that there is a team working on these.
The stakeholder felt that there were too many refund letters being issued and wondered what rules where being applied when choosing cases for audit.
Professional Fees
Section 11(a) of the Income Tax Act (the Act) requires that the taxpayer must be carrying ona trade as defined in section 1 of the Act. If the taxpayer is merely investing cash or in shares, that does not amount in carrying on a trade. However, if the taxpayer is speculating on shares for example, this could amount in carrying on a trade.
If the taxpayer is carrying on a trade, a section entitled “Local Business, Trade and Professional Income (incl. rental income) could be completed.
Stakeholders queried whether public office holders could claim these and whether commission earners could claim their accounting fees? In the case of taxable interest, are admin fees still claimable?
5.2E-Filing Challenges / Support
Toll Free Number: 0800 00 7277

Nomhle Bhengu - she has been seconded to this area (KZN)


Just a reminder that Efiling technical support needs to be escalated and there will be a TAT involved.
PAYE Interim Reconciliation: The interim Employer Reconciliation Declaration (EMP501) for the transaction period 1 March to 31 August is due between 1 September and 31 October 2011.
Blank Employer PAYE reconciliation forms, for manual submission, are no longer available at the SARS branches.
The reconciliation forms must be requested from the SARS Contact Centre by calling 0800 00 SARS (7277) or visiting your local SARS branch and the forms will be posted.
Employer PAYE Reconciliation forms are available for electronic submission on E@syfile™ Employer
Updated Version 5.0.4 of E@syfile™ Employer is now available
Employers have to ensure that as from 29 August 2011, they use only the latest version 5.0.4 of E@syfile™ Employer.
Any information submitted to SARS using a previous version of E@syfile™ Employer, will not be accepted
Stakeholders raised the following:
IT14s - are being submitted via eFiling but are not reflecting on SARS systems. Please escalate these cases to IB.
IT77’s -these are being submitted but income tax numbers are not being generated.
IT12TR’s – Trust numbers cannot be edited online, they can be changed in the Branch Office (BO) though.
IT12EI’s – these can be requested through eFiling or via post. Yes, via both channels.
IT56’s – can these be electronically submitted? Not at present.
IT34’s – hang and don’t open properly sometimes. Nomhle will follow-up on this.
Duplicate payments – do not offset these against your next periods payment. Rather pay the full amount and request a refund of the overpayment (providing supporting documentation for proof of payment).
Unallocated Credits – can’t these automatically be allocated to periods with debit balances? No, proof of payment is required.
5.3. NEW SARS POA
Some FAQ’s relating to the basic principles of Power of Attorney for all tax types - These are available on the SARS website.
For how long is the POA valid?
This document is valid for 2 years; however a new POA must be produced every
time a change of bank details is requested (exception cases only).
Does SARS accept a copy of a POA?
No, an original POA is acceptable.
Do I have to bring a POA on every visit to a SARS branch?
Yes, an original POA is required on every visit to a SARS branch.
Does SARS require an Identity document (ID) of a taxpayer and representative when accepting the POA?
An original POA that confirms that the representative has authority to act on behalf of the taxpayer must be received, with an original and certified copy of the representatives ID as well as an original /certified copy of the taxpayer.
Do I need multiple POAs if appointed as taxpayer representative for all taxtypes?
No, one POA must be completed however all the tax types must be listed.
How do I access the POA template?
You can access the POA template on the SARS internet; or by
visiting the nearest SARS branch or call the SARS National Call Centre 0800 00 7277.
Will SARS accept a POA form other than the prescribed template on the SARSwebsite?
Yes, only where:
  1. An Executor is issued with a POA by the Master of High Court in the case of liquidation, sequestration, insolvency, or death; or
  2. A legal guardian is issued with a POA by the Master of High Court in a case of a minor.
If a POA is received on the old format, SARS will accept the POA if it is still valid (i.e. not older than 2 years and dated before the new POA template became available i.e. 01 July 2011). The clienthas the choice to use the new POA template immediately or wait until the old template POAexpires.
Stakeholders noted the following:
  • having to bring a POA to SARS for each interaction is a nuisance
  • why does there have to be a two year limit on the new POA? What is the reason for this?
  • Why wont SARS accept a General POA?

5.4. EMP STATEMENTS OF ACCOUNTS
Q - Each month SARS sends an email notifying clients that there is a Statement of account on the e-filing page for EMP. If you look at what is on the page, the statement stops at February 2011, and the current year is not there.
A - The next SOA will be issued during this month and will contain tax year 2012.
5.5 NOO and NOA PROCESS
From 1 October 2011, companies will also use the NOO and NOA forms.
An NOO must always be submitted before a NOA is submitted.
Normal objection / appeals rules apply.
5.6 PENSIONERS – PENALTY AND INTEREST
No special rules for pensioners in this regard.
5.7 VAT REGISTRATIONS
Proof of Turnover
Projected Cash Flows – these are not acceptable
3 months bank statements reflecting some movement indicating that the business is active.
For compulsory registrations, the amounts on the bank statement and be manipulated to determine the turnover for a 12 month period
Proof of stock purchases and signed contracts are acceptable provided the contract is signed by all parties reflecting amounts and the terms and conditions of the contract
Invoices – we require invoices in excess of R50 000.00 for voluntary registrations
Quotations are unacceptable
Franchise agreements to be submitted together with the application where a franchise is being operated.
Property development/leasing
Purchase and Sale agreement is required and not an offer to purchase
Lease agreements – in some instances we are receiving a one pager agreement which is
unacceptable. We require a proper lease agreement, signed by the relevant parties including the terms and conditions and all other pertinent information
Zero rated transactions for properties – these applications are declined. A zero rated transaction can only take place if both the buyer and the seller are registered for VAT at the time of the sale
Proof of business/residential address
CRA01 – one should not confuse the requirements for a change in bank details to that of a
registration. The CRA01 is acceptable for bank changes but should not be used to confirm the
residential/business address
Utility bills – these must be submitted to confirm both residential and business addresses
Businesses trading from the vendors residence – we require an affidavit to this effect as well as
the utility bill confirming the residential address
Leased property – we require a proper lease agreement
Sub leasing – here again, we require a proper lease agreement
Lease agreements – required if residing in a leased property together with the utility bill
General
Clear copy of IDs are required
Third party bank details are unacceptable and voluntary registrations will be declined if third
party bank details are received. However, for compulsory registrations, the application will be
processed but the bank details will not be captured
Voluntary registrations where liability dates are too far in the past – these will be declined
VAT 101 not fully completed – all mandatory fields to be completed otherwise the application will be declined
5.8 SUPPORTING DOCUMENTS
Schedules of medical expenses and travelling supporting documents can be submitted if too many documents.
SARS will call for additional documents if required.
5.9 TRANSFER DUTY
Note that all refund queries relating to electronically submitted Transfer Duty transactions and applications must be addressed to .
5.10 BANK DETAIL CHANGES
Rules relating to the new Banking Details procedures were shared.
5.11PCC E-Mail Facility / TAT & SSMO Protocol/ KZN Escalations
PCC Fax and Email Facility
Region / Email address / Fax number
Gauteng North / / 010-2085003
Gauteng Central / / 010-2085004
Eastern South Africa / / 010-2085005
Southern South Africa / / 010-2085006
Free State / / 010-2085007
Eastern Cape / / 010-2085008
Southern South Africa / / 010-2085009
The practitioner needs to include the Practice Number on all correspondence when utilising this facility.
Practitioners requested to include only queries to a specific business unit on one fax or e-mail and not a variation.
The case number is not an auto response.
The turn around times for the faxes/e-mails sent to the PCC facility is per SARS Service Charter.
First escalation -
branch queries / Second escalation -
Branch Manager / Third escalation –
Senior Manager
(TPS Branches) / SARS Service Monitoring Office
(SSMO)
Ian Butler

039 688 9667 / Wandisa Madyibi

039 688 9660 / Deepa Moodley / 0860 12 12 16,
fax 012 431 9695,
e-mail
* - see below
5.12 SSMO COMPLAINT PROCESS
Internal SARS complaint process - the following steps should be followed before raising with the SSMO.
Step One
If you wish to raise an issue, it is usually best to do it in writing, by e-mail or fax, or alternatively by visiting your local SARS Taxpayer Service Centre or Branch Office.
Step Two
If you can not resolve your issue at Step One, contactthe national call centre and request the Call Centre Agent to assist. If the problem can not be resolved, a complaint will be registered and you will be provided with a service request number. Your complaint will then be escalated to a Consultant/Manager to assist you.
Step Three
Ifall avenues of communication have failed to resolve your issue, after a reasonable time, you may refer the full detail and history (but the query must be after SARS turn around time) of the case to the SSMO to look into the issue
5.13GENERAL
Certified copy of identity document or passport.
Please note that SARS agents will not certify any supporting documents at SARS branches. Copies can be certified at any certifying body with a “Commissioner of Oaths” stamp e.g. South African Police or South African Post Office.
The VDP process has been enhanced to include an indicator on the VDP returns. This indicator will enable the system to issue an assessment taking into account the VDP information.
It is now mandatory to select the VDP indicator ‘Y’ or ‘N’ options on the returns for a VPD case. Where ‘Y’ has been selected for a VPD case, the VDP application number is mandatory.
The following returns have been updated with the VDP indicator:
ITR12EMP201VAT201
IT12TRIT14
6. DATE OF NEXT MEETING
•December 2011
Venues and times will be communicated closer to the meeting.
7. CLOSURE
•There being no further business to discuss, the chairperson thanked all members for their contributions and the meeting closed at 10.00am.