There is practically one working month left in 2025. May it be productive for you all.
Tax issues
SARS and influencers
Something a little light hearted to start off this month’s newsletter. Some news outlets published stories about “SARS coming after social media influencers! Influences beware!” with variations on this very click bait title. The gist of the articles were how social media influencers need to declare their gross income, and yes, even that free gadget you got to review.
SARS took note of these articles and issued their own response. The interesting take away from their response is that there was a grain of truth to the hype. Following extract from the SARS media statement:
SARS has been expanding its segmentation model. SARS recognises standard taxpayers (comprising taxpayers with a single income and simple returns); Large and International Businesses; High Wealth Individuals; Public Benefit Organisations; Prominent and Related Entities; Estates; Tax Practitioners; and Employers.
The latest additions to this segmentation model are National and Provincial Government; Social Influencers; and the Gig Economy. The segment of social influencers is composed of modern entrepreneurs, who can be classified as sole proprietors or independent contractors. These are technologically savvy individuals who have identified a niche in the market to provide a generalised offering that leverages their social following. When managing this segment, SARS will handle each such situation on a case-by-case basis according to current income-tax brackets. Some of these cases may generally fall into the provisional-taxpayer category.
So watch this space, there will be lot more guidance and a lot more scrutiny on influencers in future.
Greylisting update
We’re officially off the list! As of 24 October 2025, South Africa is no longer on the FATF list. However, this does not mean that the changes made can be forgotten. A large part of the reason we were removed from the list is the significant improvements made to address systemic weaknesses in the oversight function of government. These will continue to be assessed, and if we stop moving forward, we could be reinstated.
It is however a fantastic achievement to have been removed from the list this quickly.
Changes to s18A certificate
As per Government Gazette No 53589, there is now a revised list of requirements for s18A certificates and the information that needs to be recorded for them. The list below is copied verbatim from the Gazette:
2.1 Information relating to the donor:
2.1.1 Nature of person (natural person, company, trust, etc.);
2.1.2 Identification type and country of issue (in the case of a natural person);
2.1.3 Identification or registration number (in the case of a juristic person);
2.1.4 Trading name (if different from the registered name);
2.1.5 Income tax reference number;
2.1.6 Contact number;
2.1.7 Electronic mail address;
2.2 Information relating to bona fide donations of property made in kind:
2.2.1 An adequate and accurate description of the donation of property made in kind;
2.2.2 The deemed amount of the deduction of a donation of property made in kind determined under section 18A(3) or (3A) of the Income Tax Act;
2.3 Information relating to the receipt issued:
2.3.1 A unique receipt number.
Essentially, donors are left with a choice. If they want to claim the s18A deduction, they must provide this information to the charity. If not, then the donation will not be eligible for the s18A deduction.
Valuation of trading stock
The last time SARS issued any form of explanation regarding the valuation of trading stock was PN 36 of 1995. This has finally been repealed and replaced with IN 140: Diminution in the value of closing stock. A key feature of this IN is the incorporation of case law developments and clarification of how SARS views a “net realisable value” reduction in trading stock.
A key feature is that for tax purposes, the drop in market value must have already occurred or been in existence at the end of the year for the write down to be allowed for tax purposes. Write downs on anticipated losses/damages are not acceptable for tax purposes. There is also a great write up in the IN on goods subject to seasonal or fashion changes – think clothes or certain electronics. Please read and ensure your understanding is up to date!
