The end of February each year marks the end of the tax year in South Africa. What should South African taxpayers and private investors ensure that they have ticked off before 29 February 2020?

1. Ensure that SARS subsidise your retirement savings to the fullest extent possible. Taxpayers are allowed to deduct a maximum of 27% of their taxable income to retirement funding structures. A maximum subsidy of up to 45% on contributions is most certainly not something to be ignored.
2. Review current CGT exposure across investment portfolios. Capital Gains Tax is a tax that is increasingly becoming more and more relevant in the lives of taxpayers. Investments or assets that have been realised during the course of the tax year that begun on 1 March 2019, will need to be taken into account. Provisional tax on these gains needs to be paid before the end of February.
3. February is also provisional tax time. 29 Feb 2020 is the date on which the 2nd provisional tax payment needs to be made. Great care must be taken to ensure that this provisional tax payment is correctly calculated in order to avoid penalties and interest provisions. Remember to take into account the effect of capital gains when calculating this 2nd provisional tax payment.
4. Log book mileage needs to be recorded. SARS is becoming increasingly more vigilant in terms of travel expense claims and the accuracy thereof. Taxpayers should ensure that they record their motor vehicle mileage on 28 February 2020.
5. Trust Trustees should ensure that distribution of any trust taxable income and/or capital gains to beneficiaries on low tax bases are considered before the end of the tax year. This pro-active action could result in significant tax savings for the trust and its beneficiaries.
6. Tax exempt donations. Taxpayers are allowed to make donations to the extent of R100,000 per tax year before donations tax of 20% is imposed. Investors should ensure that this donation allowance is maximized in each tax year. Investors with loan accounts are urged to exercise caution and take professional advice before merely writing off such loan accounts.
7. Investment valuations. Investors who have offshore investments should ensure that they are in a position to obtain accurate income and capital values as at 28 February 2020. Countries around the world have different tax year ends and not all international institutions render valuations at end of February each year. It is the onus and obligation of the investor to ensure that correct income and capital valuations are obtained.
8. PBO Taxpayers are allowed to deduct from their taxable income, donations made to designated public benefit organizations (PBO’s), to a maximum of 10% of their taxable income. We are living in extra ordinary times in South Africa, with extra ordinary needs, and we urge South Africans to ensure that levels of charitable giving are sustained to combat poverty and whilst about it, why not get a tax deduction! Taxpayers should ensure that they receive the appropriate certificate from the designated public benefit organization.
9. Subsistence expense claims. Employees who have had a hard year on the road travelling for business purposes should ensure that their employers give them the appropriate subsistence allowance and that this allowance is correctly reflected on their IRP5. Taxpayers are then allowed to claim against this allowance, without having the onus of submitting vouchers.
10. Document retention. Last, but by no means least. SARS no longer require substantiating vouchers and corroborating documents to be submitted to them with the tax return. However, taxpayers need to keep these vouchers and documents in a safe place, as SARS may call for them should a tax return be audited and queried. Make sure the documents are not turfed away but safely stored. These vouchers and documents need to be kept for 5 years. This 5 year period runs from the date of the tax assessment to which these substantiating documents relate.

SARS has increasingly become a more vigilant and a more effective organization and private investors are urged to take their fiscal responsibilities seriously. It should always be remembered that with tax affairs, ignorance is not recognized as a valid extenuating factor. Don’t be penny wise and pound foolish, take professional advice to ensure that you are doing the right things and legally taking advantage of all tax saving opportunities.