SARS monitoring your bank account

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Government Gazette no. 35090 (the Gazette), issued on the February 29 2012, has fundamentally changed the access the South African Revenue Services (Sars) has to every person’s bank account information.

The Gazette gives notice that in terms of section 69 of the Income Tax Act all “reporting institutions” are required to submit bi-annual returns directly to Sars in respect of all monies “invested with, loaned to and deposited” with the reporting institution, and in respect of interest received by or accrued to any person from the “reporting institution”. The first returns, covering the period 1 March 2012 to 31 August 2012 are required to be submitted to Sars by 31 October 2012.

Accountholders may be lulled into a false sense of security in understanding this to mean that all banks will now simply submit information of all interest paid by the bank to an accountholder directly to Sars, instead of the accountholder being required to disclose the information to Sars themselves. Further reading of the Gazette proves this understanding dangerously inadequate.

Firstly, it is important to note how widely the gazette defines a “reporting institution”. Included in the definition are, for example, all banks (including Postbank), companies listed on the JSE that issue bonds, debentures and similar financial instruments and organs of state that issue bonds (government bonds).

Secondly, that the “reporting institutions” must submit returns for both natural persons and, as per the Gazette, “other persons” which will include companies and trusts.

Thirdly, and possibly of greatest concern, is the information the Gazette dictates each return must contain. Whilst the requirements differ slightly for natural and “other” persons, the issues raised below are common to both.

The returns must disclose for all persons: identity particulars and tax reference numbers, the closing balances of the accounts at the end of the relevant six-month period, any interest amounts received or accrued by the persons from the “reporting institutions” and interestingly, monthly totals of all debits and credits to the accounts.

No clarity has been provided on the use Sars will make of this information. The information at the very least will assist Sars in identifying all persons who should be registered for Income Tax and VAT purposes and the non-disclosure of all receipts and accruals (local and foreign) by registered taxpayers when making provisional payments and submitting returns.

via Moneywebtax – Sars has more access to your bank account – Income tax.

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Ask Fixed Accounting to change your banking details online

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Banking detail changes will be verified before profiles can be updated.

SA Revenue Services (Sars) has implemented new fraud prevention procedures and processes regarding the way in which taxpayersbanking detail changes will be implemented.

From now on, any changes to banking details will be verified before an individual or company banking profile can be updated and if any refunds are due, these will only be processed after the receipt and verification of the new banking details.

The new procedures will improve security and reduce fraud. Banking details can be changed in person at any Sars branch or the change can be made when an individual Income Tax return is submitted. Supporting documents must be provided.

As part of the general Sars encouragement of electronic submissions, banking details can also be changed via the Sars eFiling system when submitting an ITR12 Individual Income Tax return, but Sars may still ask the taxpayer to go to a branch to verify the change.

via Moneywebtax – Sars`s stringent new fraud measures – Income tax