Tax Time in South Africa: Here’s What’s New for 2025

From expat alerts to new source codes and auto-assessments, here’s what every taxpayer needs to know

It’s official, Tax Season 2025 is now underway in South Africa. And if you thought it would be business as usual, think again. This year, the South African Revenue Service (SARS) has rolled out a comprehensive set of changes designed to sharpen compliance, expand digital services, and give taxpayers more clarity on how their income is taxed.

Whether you’re a first-time filer, an expat, a provisional taxpayer, or just trying to stay in SARS’ good books, here’s a human-friendly breakdown of what’s changed and what it means for you.

Auto-Assessments: Now Even Wider

Starting 7 July, SARS began rolling out auto-assessments in phases. These will continue until 20 July, after which manual tax return filing opens on 21 July for all individuals, trusts, and provisional taxpayers.

For the first time, some provisional taxpayers will be included in the auto-assessment pool, with SARS offering a new option via its Online Query System. If you’re a provisional taxpayer and get a notification, you can request inclusion, which could save you a lot of time.

As always, keep an eye on your SMS and email notifications and log into eFiling or the MobiApp to check your status. With scammers on the prowl during tax season, make sure any messages are really from SARS before taking action.

Watch Out, Expats: Residency Status Matters

If you’re a South African living abroad, 2025 is the year to double-check your tax residency status. SARS now requires you to explicitly declare if you’ve reinstated your tax residency.

Even if you’ve been living overseas for years, not formally ending your SA tax residency could land you in hot water, especially if you return in the future. It’s a signal that SARS is tightening the net on undeclared global incomes.

New Rules and Reporting Requirements for Employers

Employers need to update their payroll systems to comply with new requirements under Sections 11(nA) and 11(nB) of the Income Tax Act. These will now appear under specific source codes (4042 and 4058) on the IRP5/IT3(a) tax certificates.

If you’re an employee who receives backdated salaries or pensions, expect to see new source codes (3623 and 3673) reflected on your return.

Foreign Tax Credits: Use Them or Save Them

Big news for investors with offshore assets: changes to Section 6quat now allow foreign tax credits on capital gains to be fully recognised. And if you don’t use the credits this year, you can carry them forward for up to six years.

This is especially important for South Africans investing in foreign real estate or stocks, finally, a fairer treatment that aligns better with local capital gains tax.

Changes for Trusts, Labour Brokers, and Dividends

Here are a few smaller, but no less important, updates:

• Trust Income: If you’re married in community of property and receive trust income, SARS will apply a 50% split of that income.

• Labour Brokers: If you’re a labour broker with an exemption certificate, you’re now classified as a provisional taxpayer. Expect to file IRP6s.

• New Dividend Source Codes: SARS has introduced 4306 and 4307 for exempt local and foreign dividends — make sure you select the correct one.

• Learnership Incentives Extended: Section 12H benefits for employers have been extended to 2027.

Tech Enhancements and Banking Verification

To reduce fraud and simplify updates, SARS has improved its banking details verification process. Instead of re-entering your bank details, you’ll now select from a list of verified accounts when making updates via RAV01 or ITR12.

Also, SARS will notify taxpayers when carry-forward deductions like Section 18A (donations) or 11F (retirement savings) haven’t been applied yet often due to a verification review.

Key Filing Dates: Save These

With these updates, SARS is aiming to make the tax process more streamlined, digital, and data-driven, while also closing loopholes and increasing compliance across the board.

The key takeaway for taxpayers? Stay alert, file early, and check your tax status carefully, especially if you’re an expat or provisional taxpayer. If in doubt, consult a tax practitioner or reach out directly to SARS via their official platforms.

Welcome to Tax Season 2025 may your returns be smooth and your refunds swift.

{Source: BusinessTech}

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com