Tax Season 2016 is due to kick off on 1 July, meaning it is time for taxpayers to submit their returns for income earned between 1 March 2015 and 29 February 2016. Paying taxes is hardly anyone’s idea of fun, but to help you survive the dreaded annual tax season, we have summarised what you need to know and provide to SARS in respect of your investments below.

Ecsponent’s Class A and C preference shareholders

If you are invested in Ecsponent’s Class A or Class C preference shares, i.e. you receive a monthly payment from Ecsponent, you will receive an IT3B certificate from us. An IT3B certificate reflects the value and the nature of income you’ve generated from your investment.

As a preference shareholder, the monthly payments you receive are dividend payments, which are subject to a dividend withholding tax of 15%. In other words, the 15% tax has already been paid on your behalf and it reflects on the IT3B certificate as proof.

When completing your tax return, you must disclose the total amount you received in dividends from South African companies in the field “Exempt local and foreign dividends” in the section of the return headed “Amounts considered non-taxable.” You do not have to include the value of the dividend withholding tax paid on your behalf.

Ecsponent’s Class B preference shareholders

If you are invested in the capital growth provider, Ecsponent’s Class B preference shares, and you are not receiving a regular payment from us but have invested for a five-year term, you will not receive an IT3B. Only once your investment reaches the end of its five-year term will you receive an IT3C certificate.

The IT3C certificate reflects capital gains, or the growth you received on your investment. Depending on your personal tax circumstances, you may be liable for capital gains tax in the tax year when this investment matures. Until then, there is no need to reflect any information on your tax return and you will not receive a tax certificate from Ecsponent.

General tax filing tips

  • Tax Season runs until November, although provisional taxpayers who submit their returns via eFiling, have until January 2017 to submit their 2015/2016 returns.
  • Make sure you have the correct supporting documents organised and available for verification purposes. You will only need to submit these documents to SARS upon request and they don’t need to be filed with your original tax return.
  • Use only the actual values that are reflected on your supporting documents and complete your return honestly, correctly and submit it on time.
  • Keep your information safe from opportunists and remember that SARS will never:
    • request your banking details or other personal details in any communication that you receive by post, email, phone or SMS
    • send you any hyperlinks to other websites – even those of banks.

For more information about Tax Season 2016, visit SARS website. If you need information from Ecsponent, or a copy of your IT3B certificate, please contact us.