SARS Bank Account Access
It is important to be vigilant and honest on your tax return. SARS has access to your bank accounts through third parties such as banks. SARS may raise additional assessments if they detect undeclared income, which can also attract penalties and fines. Take the time to ensure that your tax return is accurate and complete, and that you have documents and records to support your claims. Respond promptly to SARS with any required explanations and documents. Utilize the dispute mechanism if you do not agree with additional or estimated assessments. Request a compromise or repayment plan if you cannot immediately settle your account with SARS.
The 2024 tax season opens on the 15th of July 2024. From 1 July, SARS will start issuing auto assessments for non-provisional taxpayers. Here are a few things you need to know:
Criminal Offences:
The following actions or inactions relating to non-compliance may constitute a criminal offence and may attract criminal charges, penalties, and interest:
- Failing to register or notify SARS of a change in registered details.
- Failing or neglecting to register as a tax practitioner.
- Failing or neglecting to submit a tax return or document to SARS.
- Failing or neglecting to retain documents/records required by SARS under the Tax Administration Act.
- Submitting or making a false statement.
- Issuing an erroneous, incomplete, or false document.
- Pretending to be a SARS official.
Steps to Stay Compliant:
To avoid getting into trouble with SARS and the law, take the following steps:
- Check and ensure that your details (such as addresses, personal details, etc.) are recent and up-to-date on eFiling.
- If you provide tax services, ensure that you are registered as a tax practitioner and are compliant with the requirements of SARS and your controlling body. If you are a taxpayer, ensure you are using the services of a registered tax practitioner.
- Submit your tax returns on time.
- Keep records and documents that support your tax return and always ensure that your tax return is a true reflection of your income and deductions for the tax year under review.
Common Questions:
Does SARS have access to all my bank accounts?
Yes, SARS can access your bank account information through third-party data providers like banks.
Do banks report deposits to SARS?
Banks are required to report certain deposits to SARS, which helps them verify your declared income.
How does SARS verify your bank account?
SARS verifies bank accounts by cross-referencing data from your tax return with information provided by banks.
Who can see my bank account?
Besides you and your bank, SARS can access your bank account details for tax compliance purposes.
SARS Knows What’s in Your Bank Account:
Some people believe they can hide information from SARS. However, it is in your best interest to declare all income you received during the year of assessment, as it is highly likely that SARS knows more about your finances than your spouse or family members do.
In some developed countries, a taxpayer’s tax return is linked to their bank account. This way, the taxpayer is obliged to account for everything that happens in their bank account on their tax return. SARS is developing a similar system. SARS now requires certain taxpayers to explain why the revenue declared on their tax return does not match the deposits in their bank accounts. Unsatisfactory answers have led to additional estimated assessments and, in some cases, heavy penalties being imposed.
For example, if a taxpayer declares R1.5 million on their tax return but the deposits in their bank accounts suggest a revenue of R5 million, the taxpayer must explain to SARS why the revenue collector should not raise additional assessments for the “under-declared income.” If you do not respond or do not supply adequate reasons as to why the deposits were not declared, or that they relate to loans and inter-account transfers, or potentially from other non-taxable income, then SARS may raise these assessments.
How Does SARS Know What’s on Your Bank Statements?
When you submit your tax return, SARS may request you to submit your bank statements as part of the supporting documents. Additionally, SARS has had access to taxpayers’ information from third-party data providers such as banks and other financial institutions since 2012.
What Happens if You Do Not Agree with SARS Assessments?
The burden of proof lies with the taxpayer. SARS has dispute mechanisms that can be used to challenge these assessments. These procedures often take time and may require supporting documents to support your claims. But SARS may require the taxpayer to reconcile amounts line by line and to explain each line with evidence. For example, why a deposit stands out, why it was made, and why it was not included in the taxpayer’s income.
What if SARS is Correct but I Cannot Pay Them?
It is important to note that SARS can instruct the taxpayer’s bank to deduct monies from an account and pay it over to SARS. Therefore, it is important for a taxpayer to approach SARS and request a compromise or a repayment plan if they feel they are not in a position to settle the amounts due.
Ensure Your Compliance:
Stay proactive and ensure your tax affairs are in order. If you need assistance with your tax return or navigating SARS requirements, contact us today for expert guidance and support. Let’s ensure you stay compliant and avoid unnecessary penalties and stress.
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