Tax Returns: A Guide to the 2025 Tax Season
Tax returns are a vital part of our financial obligations as citizens. Every year, taxpayers are required to submit their tax returns to the South African Revenue Service (SARS) to ensure they are in compliance with tax laws. The upcoming 2025 tax season introduces several key updates that will impact both individuals and provisional taxpayers. In this guide, we will explore the important dates, changes, and what to expect from the filing process.
Key Dates for the 2025 Tax Season
The 2025 Filing Season for personal income tax opens on 7 July 2025. SARS has set the following dates for different taxpayer groups:
- Auto Assessment Notices: 7 July 2025 to 20 July 2025
- Individual Taxpayers: 21 July 2025 to 20 October 2025
- Provisional Taxpayers: 21 July 2025 to 19 January 2026
- Trusts: 19 September 2025 to 19 January 2026
It is crucial for taxpayers to be aware of these dates to ensure they submit their tax returns on time and avoid potential penalties.
Updates to the Tax Return Process
Certain Provisional Taxpayers Can Participate in Auto Assessment
For the 2025 Tax Season, SARS will identify eligible provisional taxpayers and invite them to express their interest to receive an Auto Assessment. Eligible and interested provisional taxpayers will be included in the Auto Assessment population.
Section 6quat
With effect from 1 March 2025, section 6quat of the Income Tax Act (the ITA) has been amended for taxpayers to fully use foreign tax credits for the taxes paid on capital gains in the foreign jurisdiction to the same extent in relation to the taxes paid in South Africa on the same gains.
From the 2025 tax year, SARS will maintain any unused foreign tax credits to be carried forward automatically in the subsequent years of assessment, up to six years.
Section 11(nA) and 11(nB)
With effect from 1 March 2025, employers must report sections 11(nA) and 11(nB) of the ITA details on the IRP5/IT3(a) certificate. These changes will affect the ITR12 tax return so that section 11(nA) source code 4042 will be reflected on the IRP5/IT3(a) tax certificate, and a new source code 4058 relating to section 11(nB) will be reflected in the “Other Deduction” field.
Definition of “Provisional Taxpayer” in Paragraph 1 of the Fourth Schedule
With effect from 1 March 2025, a labour broker who received an approved certificate of exemption will be included in the definition of provisional taxpayer. This means that these labour brokers must comply with provisional taxpayer requirements such as submitting IRP6 tax returns.
Section 12H Learnership Agreement
The termination date for the Section 12H Learnership Agreement (as per the ITA) has been extended from 1 April 2024 to 31 March 2027.
Allowable Interest Expenses on Foreign Interest in Terms of Practice Note 31
The "Allowable interest expenses incurred in the production of interest received" line item has been introduced within the "Foreign Interest" container of the ITR tax return. This aligns with Practice Note 31.
Backdated (Antedated) Salaries and Pensions
New source codes 3623 and 3673 have been introduced to the ITR12 tax return for backdated (or antedated) salaries and pensions.
Section 10(1)(i) Interest Exemption
To apply the Section 10(1)(i) exemption correctly, the executor will now be able to declare the "Interest Earned Date From" and "Interest Earned Date To" within the investment-income container on the deceased estate tax return, where such dates exceed the year of assessment during which the taxpayer passed away.
Exempt Local and Foreign Dividends
Two new source codes have been introduced for local (source code 4306) and foreign (source code 4307) dividends, now placed within the non-taxable container on the ITR12 tax return.
Section 9H Change of Residence
Starting from the 2025 tax year, RSA tax-resident and non-resident taxpayers will see a specific ITR12 and IRP6 tax-return type based on their registration status with SARS, as follows:
ITR12
• RSA tax residents will be presented with the resident wizard questionnaire.
• Non-residents will be presented with the non-resident wizard questionnaire.
• Taxpayers who ceased RSA tax residency during the year of assessment will be presented with both the resident and non-resident questionnaire.
IRP6
• RSA tax residents will be presented with the resident return.
• Non-residents will be presented with the non-resident return.
• Taxpayers who ceased RSA tax residency during the year of assessment will be presented with both the resident and non-resident return.
Trust Income Changes
From the 2025 tax year, SARS will apply a 50% communal estate where income from a trust is declared, and the taxpayer is married in community of property.
Unused Balances (Section 11F, Section 18A, Section 20)
SARS will print the following note on the ITA34 when unused balances are not automatically carried over to the subsequent year of assessment:
SARS did not consider your carryover/brought forward amount(s) as the current return is under the verification review. SARS will initiate the amendment of the return to account for the carryover/brought forward amount once the verification case is finalised.
Enhancement of Banking Details
To improve the user experience with the Registration, Amendments, and Verification Form (RAV01) and the ITR12 tax return, taxpayers will be presented with a list of their verified banking details available to SARS. Taxpayers will need to select this information when updating their bank-account details, rather than manually entering them.
Reinstatement of RSA Tax Residency
The Registration, Amendments, and Verification Form (RAV01) will allow taxpayers who previously ceased being RSA tax residents to indicate the reinstated date on the “Reinstatement Date of RSA Tax Residency” line item.
Changes to the ITR12 Tax Return
The ITR12 tax return form has been updated for the 2025 tax season. Key updates include:
- Provisional Taxpayer Changes: From 1 March 2025, labour brokers who receive an approved certificate of exemption will be considered provisional taxpayers. This means they must comply with provisional taxpayer requirements, including submitting IRP6 tax returns.
- New Source Codes for Backdated Salaries and Pensions: For backdated (antedated) salaries and pensions, new source codes (3623 and 3673) have been introduced in the ITR12 tax return form.
Interest Exemption and Trust Income Changes: Changes to tax residency, trust income reporting, and section 10(1)(i) interest exemption will also impact your filing for 2025.
Filing Your Tax Return
It is essential for taxpayers to understand the updates to the ITR12 form and how they might affect the submission of their tax returns. Whether you are an individual taxpayer, provisional taxpayer, or trustee, ensure that your return is accurate, up-to-date, and submitted before the deadline.
SARS offers various tools to help taxpayers navigate the tax return process. With these tools, filing a tax return has become easier than ever. However, taxpayers should be diligent in ensuring all information is correct to avoid delays or complications.
The 2025 tax season brings several new updates to tax return procedures, including changes to provisional taxpayer requirements, new source codes, and adjustments for foreign tax credits. These changes are designed to streamline the process and offer greater flexibility for taxpayers.
Remember, meeting the filing deadlines is crucial. Ensure that you keep track of important dates and review any changes that may apply to your situation. By staying informed, you can avoid penalties and ensure that your tax returns are filed smoothly.
For more information or assistance with your tax return, contact
Core Accountants and Tax today!
