Dear fellow taxpayer,

In July/August this year SARS published a draft document on proposed PAYE amendments for 2010, inviting employers and practitioners for comments. That process has been completed, and SARS published the final PAYE 2010 Specification document on the 1st of September.

New income tax certificate

Among some of the changes will be the introduction of a new income tax certificate, which will now consist of two A4 pages. The first page will contain the employer’s and the employee’s demographic information, with the second page containing the employee’s financial information. The tax certificate number must be unique per employer, and the same certificate number may not be used more than once by an employer, and may not be duplicated in either the current, or in previous years of assessment.

In order to reduce the volume of data, the number of income source codes will be reduced to only 13, and the number of employee and employer deduction codes limited to 7. To make this possible, some of the source codes will be ‘sub-codes’ and their values must be consolidated into a ‘main’ source code on the certificate. You will be able to hold these sub-codes within your payroll system, but they must not be written to the CSV file.

The tax certificates may have local and foreign income specified on the same certificate, and will require at least one income code with a value greater than zero. However, if the remuneration for a director of a private company or a member of a close corporation cannot be determined at the end of the tax year, the existing 3615 income code can be used.

Until next time,

 
Ettiene Retief
Editor in Chief
Practical Tax Handbook