Tax Season 2017 is due to kick off on 1 July, meaning it is time for taxpayers to submit their returns for income earned between 1 March 2016 and 28 February 2017. 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 asummary of dividends paid from us. It 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 20%. In other words, the 20% tax has already been paid on your behalf and it reflects on the summary of dividends paid.

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 a summary of dividends paid.

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 summary of dividends paid from Ecsponent.

General tax filing tips

  • Tax Season runs until November, although provisional taxpayers who submit their returns via eFiling, have until January 2018 to submit their 2016/2017 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 2017, visit SARS website. If you need information from Ecsponent, or a copy of your summary of dividends paid, please contact us.