INDIVIDUAL TAX RETURN RECORD-KEEPING

Article by: Fourways Accountant: ANNJA LOUCA

Record-Keeping Requirements for Individual Tax Returns

Accurate record-keeping is vital for compliance with the Tax Administration Act and other South African tax laws. It plays a key role in:

• Supporting Tax Returns: Substantiating the information reported in your submissions to SARS.
• Handling SARS Queries: Ensuring you can respond effectively to audits or inquiries.
• Financial Management: Providing a clear financial history to assist with personal financial planning and decision-making.

How Long Should Records Be Kept?

The duration for keeping records as per SARS depends on your circumstances:

• Filed Returns: Retain records for five years from the submission date if not audited. >Unfiled Returns: Keep records indefinitely until the return is submitted.
• No Return Required: Keep records for five years or until an audit concludes, whichever is first, if income, capital gains/losses, or other taxable activities occurred.
• Disputes: Retain records for five years or until the final decision on objections/appeals.
• Audits/Investigations: Maintain records until the audit or investigation concludes.

Records should be kept in their original form, well-organized, and safely stored, either physically or electronically, ensuring they meet SARS requirements and are available for inspection.

Can You Keep Records Electronically?

Yes, electronic record-keeping is allowed and can be an efficient way to manage your documents, as long as the records meet the requirements set by the Commissioner.

Ensure your electronic records are organised, secure, and accessible for potential audits or investigations. The records must be in a format that SARS can easily access, read, and analyse correctly.

If you're using accounting software like Xero, documentation explaining how transactions are created, processed, and stored must be available. This includes manuals for the software and hardware, as well as procedures that prevent unauthorised deletion, alteration, or destruction of records.

Your electronic records must comply with the integrity standards outlined in the Electronic Communications and Transactions Act (ECTA), meaning they should be secure and protected from tampering.

Backup and Storage

Measures must be in place to ensure the adequate storage of electronic records, including backups and the storage of all electronic signatures, log-in codes, keys, passwords, or certificates required to access the records.

Using the excuse ‘my laptop was stolen or broken’ is not acceptable to SARS and won’t be recognised as an appropriate defence for their loss. Use either external storage, cloud storage or ideally both!

Proper record-keeping is not only a legal requirement but also a best practice for managing your financial affairs. By following these guidelines, you can ensure compliance with SARS and avoid potential issues during audits or investigations.

If you have any questions or need assistance with your record-keeping, please do not hesitate to contact us. Please visit our website www.anlo.co.za or give us a call on 011 658 1324