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South Africa: Measures to clarify eligibility for relief from PAYE, provisional tax (COVID-19)

South Africa: Eligibility for relief from PAYE

A bill—the Disaster Management Tax Relief Administration Bill—presented on 24 June 2020, introduces a new proviso to the definition of “qualifying taxpayer” (i.e. those taxpayers who qualify for the automatic deferral of pay-as-you-earn (“PAYE”) and provisional tax) under the relief measures in response to the coronavirus (COVID-19) pandemic.


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The definition of “qualifying taxpayer” includes a taxpayer that conducts a trade during the year of assessment ending on or after 1 April 2020 but before 1 April 2021 and has gross income of R100 million or less during that year of assessment. Taxpayers with a gross income over the R100 million gross threshold do not qualify for automatic relief and must apply to the South African Revenue Service (SARS) for relief on a case-by-case basis.

KPMG observation

Given the uncertainty that the COVID-19 pandemic has created for businesses, some taxpayers were unsure whether their gross income for the year would fall above or below the R100 million threshold and were therefore unsure whether or not to automatically apply the PAYE and provisional tax relief.

The newly introduced proviso to the definition of “qualifying taxpayer” provides that the requirement in relation to the R100 million gross income limit will be deemed to have been met if the Commissioner for SARS is satisfied that the taxpayer’s estimate of the gross income for that year of assessment, when making a reduced payment, was calculated with due regard to the factors and was not deliberately or negligently understated.

Read a June 2020 report [PDF 129 KB] prepared by the KPMG member firm in South Africa

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