Tax Registration of Employees

All employees in a business should be registered for tax. If you have any trouble registering your employees for tax with SARS call us today and speak to a professional tax expert that will assist you in resolving the issue.

Legislation should always be the starting point when it comes to all tax-related issues. Taxpayers often fear and respond negatively when seeing communications from the South African Revenue Service (“SARS”) before asking themselves in the terms of what section of the Income Tax Act they are obliged to provide the information.

A good example was for instance the request from SARS for employers to register employees as taxpayers. Is this a valid request and if yes, in terms of what section of the Act, is the employer obliged to do so?

Section 67 of the Income Tax Act states that every person who becomes liable for normal tax or who becomes liable to submit a tax return must apply to the Commissioner to register as a taxpayer. Section 67 also states that any person whose income is derived solely from net remuneration and is only subject to SITE withholding, is not required to register as a taxpayer.

Section 69 of the Income Tax Act examines the duty to furnish information or returns. This section is relevant to employers as it governs the monthly and annual returns that are submitted. Amongst others, Section 69 stipulates that every person shall, if required by the Commissioner, furnish the Commissioner with the full names, address and income tax reference number, “if that number is available”.

Critical in this instance, is the reference to the word “available”. Where the information is available, it should be provided to SARS. Where the information is unavailable, it cannot be provided to SARS. Accordingly, where an employee is not registered as a taxpayer, the tax reference number cannot be furnished to the Commissioner as it is not available. In addition, when the employer has made numerous requests to an employee to provide his/her tax reference number without the employee complying, this information would be unavailable.

SARS, in its requests to employers may potentially be relying on Section 69 (3) of the Income Tax Act. In essence, Section 69(3) states that every person to whom a return or a written request for information is sent by the Commissioner, they must complete the return or comply with the written request for information in accordance with the requirements of the Commissioner; and return it to the commissioner.

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