Trusts urged to register for income tax

Monday, May 30, 2022

The South African Revenue Service (SARS) has advised representative taxpayers of trusts of their duty to register trusts for income tax purposes.

In a statement, SARS on Friday said: “Trusts are included in the definition of a 'person' in terms of the Income Tax Act, 1962 (ITA), and as such the trustees or representative taxpayers have a responsibility to register all trusts for income tax purposes”.

The revenue collector said trusts that were required to register include all local trusts, non-resident trusts that are effectively managed in the Republic of South Africa as well as non-resident trusts that derive income from a South African source.

It said: “The representative taxpayers of trusts are the trustees of a trust, but the responsibility to submit the tax return may be conferred on a specific trustee or a tax practitioner.

“SARS wishes to remind trustees of trusts that they are required to ensure that the tax returns of trusts are submitted. Currently a trust, whether active or dormant, must submit an income tax return on an annual basis in line with the requirements issued annually by the Commissioner. For the 2021 year of assessment, the filing season for trusts opened on 1 July 2021.”

SARS reminded representative taxpayers of trusts that the availability of the Voluntary Disclosure Programme (VDP) subject to the requirements thereof, should a trust not be registered for income tax purposes.

SARS warned that delays or no submission of all outstanding income tax returns would result in penalties and interest.

SARS Commissioner, Edward Kieswetter, reaffirmed SARS’ commitment to provide clarity and certainty to taxpayers so that they can effortlessly fulfil their legal obligations, and trusts are one of the vehicles that are used by taxpayers to operate in a number of ways. –

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