As of the 1999 tax year, the Receiver of Revenue (SARS) requires tax certificates to adhere to new guidelines. Employee IRP5/IT3(a) tax certificates must be submitted to SARS in a new electronic and a printed format. Pre-printed continuous stationary (with unique numbers) is no longer supplied or accepted by SARS.
In addition, SARS also requires (as of the tax year 2000) that tax calculations adhere to new guidelines. Employee earnings, deductions, fringe benefits, and non-earnings information must also be reported in greater detail on the IRP5/IT3(a) certificates.
This release note highlights the steps you must take in order to process IRP5/IT3(a) certificates on your R/3 system in accordance with SARS guidelines for the tax years 1999 and 2000.
All previous LCPs for your particular release must already be installed before installing this LCP.
- Tax Year 1999
For the 1999 tax year, you must perform the following steps in order to process the new IRP5/IT3(a) tax certificates:
Copying tax forms from one client to another
When applying the LCP for IRP5 tax certificates, the forms: WTAX, WT99, and WLBL are copied into client 000. In order to have these reports available in your logon system, you must run the report edit forms (RPUFRM00) and set the following parameters:
Infotype Taxes (0149)
Maintain if applicable (from the appropriate date) the following fields on infotype Taxes (0149): Directive Number, Nature of Person, Registered Name, Registered Number, and Seasonal Flag.
Note: While entries in these fields are required information for the IRP5/IT3(a) certificates, entries in the fields do not cause retroactive tax calculations in the R/3 system.
Employee Identification Information
Ensure that employee identification information is maintained in the system for all your employees.
Employee Address Information
Ensure that employee addresses have been maintained on infotype Addresses (0006).
SARS - Tax Registration
As an employer, you must ensure that your organization has set up registration information with SARS correctly. This information must also be maintained in the system, see in the IMG Maintain tax registration number for payroll (feature WWTRN) and PAYE tax reference information (table T5W66).
Determine if Tax Certificates Issued Using Old Method - Tax Year 1999
For the 1999 tax year only, you must determine if tax certificates were generated for employees using the 'old' tax procedures. If an 'old' tax certificate was generated for an employee, he or she will automatically receive the status (Exclude TW). In this case, an electronic tax certificate will not be generated for that employee. See in the IMG Determine if 'old' certificates issued (RPCTCIW0).
Generate IRP5/IT3(a) Tax Certificates
Once all the relevant data has been entered into the system (as described above), you are ready to generate electronic tax certificates. To do so, follow the IMG steps in Execute run administration (RPCTCAW0).
Running this program allows you to process the annual South African tax certificates for your employees. As a reference, the program also displays a log indicating the status of the tax certificate runs to date for the given tax year.
Once tax certificates have been successfully generated, you can download the relevant file(s) onto magnetic media and send it to SARS. If the data is rejected by SARS, either the whole set of employees may be re-processed, or individual employees may be removed from the processing. In both cases, a new print file and new data for SARS is created. Once the data has been accepted by SARS, you can print the print file and give employees a paper copy of the certificate.
IRP5 - Retroactive calculations
It is recommended that you close the tax year. To do so, go into the control record and set the earliest retroactive calculation date to 01.03.99 (or the beginning of your 1999 tax year).
If this is not possible, you must rerun IRP5 tax certificate generation process at a later point in time. If an employee's details have changed since the first IRP5 run, the system will automatically cancel the old certificates and issue new certificates.
Form - WT99
In order for any additional information to be added to the IRP5/IT3(a), you must use T512E.
Running IRP5s for people for whom payroll has not been run in a previous month
If an employee is not terminated, the system assumes (for purposes of the IRP5) that the employee is employed until the end of the tax year.
- Tax Year 2000
In addition to the above steps, you must also maintain the following steps for the tax year 2000, in order to meet SARS new tax calculation requirements. Note: This must be done before running payrolls for the tax year 2000.
Gross Earnings Customer Wage Types
You must make the following changes to EACH of your wage types representing gross earnings.
Note: When applicable, you can also set the appropriate indicator for processing class 71 for taxable fringe benefits wage types.
Lump Sum Payments
For the handling of lump sum payments, see the OSS Note 0134327.
Arrear Pension Funds and Clearance Numbers
Note: Each insurance scheme must have its own wage type. Make adjustments to the system accordingly.
Wage types representing arrear pension funds must be stored in the SCRT table.
Note: With the above setting, the system will automatically pass the wage type into the SCRT table for arrear pension funds.
Form - WTAX
In order for wage types (arrear pension funds and lump sums) to be included on the form WTAX, you must add the wage types to the form. Using the view maintenance for table T512E, enter in the table all your wage types (including the clearance number). Note: If no clearance number is entered, tax exemptions are not permitted.
Retirement Funding Indicator
For taxable earnings codes (as specified by SARS), the system will automatically output the earning code twice. The earning code with a Y represents the retirement funding portion of this code, while an N represents non-retirement funding.
In the case where the tax code represents non-taxable earnings, the indicator will always be blank, as the earnings code can never be considered as non-retirement funding.
See the OSS Note 129089 - New IRP5 for 1999
1999 Tax Year
Tax Year 2000
In addition to the further hints for the tax year 1999, the following issues are also relevant for the tax year 2000: