Glossary of Terms

Ad Valorem duties and taxes
Duties and taxes which are calculated on the basis of value.

Ad Valorem Products
These products are generally those which are seen as ‘luxury items’ and include, amongst others, Motor Vehicles, Electronic Equipment, Cosmetics, Perfumeries and other products. They will be subject to Ad Valorem Excise Duty.

Administrative non-compliance Penalty
An Administrative non-compliance penalty is a penalty imposed by SARS in accordance with Chapter 15 of the TAA.

ADR1
Alternative Dispute Resolution – Notice of Objection

ADR2
Alternative Dispute Resolution – Notice of Appeal

Alternate Dispute Resolution (ADR)
ADR is a form of dispute resolution other than litigation, or adjudication through the courts. It is less formal, less cumbersome and less adversarial and a more cost effective and speedier process of resolving a tax dispute with the South African Revenue Service.

Alternate period
A period, whether of 12 months or not, commencing on the day following the last day of the preceding alternate period in relation to the employer and ending on a date falling not more than 14 days before or after the last day of February, or such greater number of days as the Commissioner, having regard to the circumstances of the case, may allow.

Annual payment
An amount of net remuneration that is, in accordance with the employee’s conditions of service or the employer’s practice, paid in a lump sum to the employee or it is an amount that is calculated without reference to a period.

Annuity
Usually a fixed sum of money or benefit paid to a person in monthly, quarterly, yearly or similar, recurrent instalments.

AP34
Penalty assessment notice

Authorised Debit Push
These are payment transactions initiated on the eFiling site and authorised for each transaction. The transaction is only successful after the bank has confirmed that the transaction went through. This payment mechanism utilises the inter-banking facility, ACB that involves the initiation of payment instructions from the originating bank to the clients bank. The Debit Push mechanism may reverse due to insufficient funds once the request is processed by the originating bank. This is similar to a debit order.

BRICS
The world’s top emerging economies – Brazil, Russia, India, China and South Africa

Brokers
A labour broker is a person who, for reward, provides and remunerates workers for a client and is either in or not in possession of an exemption certificate (IRP 30). The labour broker either makes available his / her own employees to perform work for a client or he / she procures workers for a client. The labour broker pays the workers.

Capital Gains Tax (CGT)
Tax levied on the profits realised from the disposal of capital assets or investments by a taxpayer. A capital gain is the excess of the proceeds over the base cost.

CIPC
Companies and Intellectual Property Commission

Commissioner
The Commissioner for the South African Revenue Service (SARS).

Declaration of arrival or declaration of departure
Any declaration required to be made or produced to Customs authorities upon the arrival or departure of a means of transport by the person responsible for the means of transport or his / her agent and containing the necessary particulars relating to the means of transport and to the journey, cargo, stores, crew or passengers.

Dividend declared
Approval of the payment or distribution of a dividend by the directors of a company or by any other person with comparable authority or in the case of the liquidation of a company, the liquidator thereof.

dividend withholding tax
Dividends tax is a withholding tax that is withheld and paid to SARS by the company paying the dividend or by a regulated intermediary (i.e. a withholding agent).

Domicilium Citandi et Executandi
Address for legal purposes

e@syFile
A Software package provided by SARS which has the functionality to create reconciliation documents in the prescribed formats and produce a ZipCentral file for submission purposes.

EMP501
Employer reconciliation declaration form.

EMP601
Tax certificate cancellation declaration form.

EMP701
Reconciliation adjustment declaration form.

Employee tax certificate
A certificate in the form prescribed by the Commissioner which shows the remuneration paid or payable to the employee/former employee by the employer and the sum of amounts of Employees’ Tax deducted or withheld by the employer from such remuneration. The Employee Tax certificate format is prescribed on the: 1999 to 2007 format: IRP5 and IT3(a); and From 2008 format: IRP5/IT3 (a).

Estates Duty
Estate duty is levied in terms of the Estate Duty Act, 1955, Act 45 of 1955 (the Act) and constitutes a tax which has been levied on deceased estates since 1 April 1955. Under current legislation it is levied on the dutiable amount of the estate which exceeds R3 500 000, at a rate of 20%.

Import duties and taxes
Customs duties and all other duties, taxes or charges which are collected on or in connection with the importation of goods, but not including any charges which are limited in amount to the approximate cost of services rendered or collected by the Customs on behalf of another national authority (*) (*) General Annex, Chapter 2 of the revised Kyoto Convention.

IRP5
Refers to an Employee Tax certificate which reflects remuneration received, certain deductions and Employees’ Tax deducted or withheld during the period of employment in a particular tax year.

National budget
The projected revenue and expenditure that flows through the National Revenue Fund. It does not include spending by provinces or local government from their own revenues.

Physical Presence Test
A natural person, who is not ordinarily resident in South Africa at any time during a relevant year of assessment but meets with all three requirements of the physical presence test, will be deemed to be a resident. To meet the requirements that person must be physically present in South Africa for a period or periods exceeding – (i) 91 days in aggregate during the year of assessment under consideration; (ii) 91 days in aggregate during each of the five years of assessment proceeding the year of assessment under consideration; and (iii) 915 days in aggregate during those five preceding years of assessment. If that person fails to meet any one of these three requirements, he/she will not satisfy the physical presence test and will, for the purpose of the Act, be a non-resident.

Public Benefit Organisations
The term “public benefit organisation” is defined in section (30)1 of the IT Act as an organisation that is not for gain, a non-profit organisation whose sole object is to conduct, and be involved in, one or more public benefit activities.

Registered tax practitioner
The duty to register as a tax practitioner applies to– Every natural person who: Provides advice to another person with respect to the application of a tax Act; or Completes or assists in completing a document to be submitted to SARS by another person in terms of a tax Act; Such person must register as a tax practitioner with SARS within 30 days after the date that person for the first time provides advice, or assists in completing documentation. The duty to register as a tax practitioner does not apply to a person who: Provides the advice and completes or assists in completing a document solely for no consideration to that person or his or her employer or a “connected person”, as defined in section 1 of the Income Tax Act No.58 of 1962, in relation to that employer or that person; Provides the advice solely in anticipation of or in the course of any litigation to which the Commissioner is a party or where the Commissioner is a complainant; Provides the advice solely as an incidental or subordinate part of providing goods or other services to another person; Provides the advice or completes or assists in completing a document solely:- to or in respect of the employer by whom that person is employed on a full time basis or to or in respect of that employer and “connected persons” in relation to that employer; or under the direct supervision of a person who is registered as tax practitioner in terms of the subsection above. A person may not register as a tax practitioner if :- During the preceding five years, that person has been removed from a related profession; during the preceding five years, that person has been convicted (whether in the Republic or elsewhere) of theft, fraud, forgery or uttering a forged document, perjury, an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act No.12 of 2004), or any offence involving dishonesty – for which the person has been sentenced to a period of imprisonment exceeding two years without option of a fine or to a fine exceeding the amount prescribed in the Adjustment of Fines, 1991 (Act No.101 of 1991).

Year of assessment
The year of assessment for taxpayers covers a period of 12 months. For individuals and Trusts, the commencement date of the year of assessment starts on 1 March and ends on the 28/29 February each year. For Companies and Close Corporations the year of assessment is the applicable financial year.