Starting from 1 September 2024, individuals planning to withdraw from the savings pot of the Two-Pot Retirement System must be registered for tax. Unregistered individuals must complete their registration before applying to their relevant fund, as unregistered requests will be rejected by SARS.
Key Points:
- Tax Registration: Contributions to retirement funds are not taxed, but withdrawals will be taxed at the individual’s applicable rate. Taxpayers must ensure they have no outstanding returns or debts to SARS, as these will be deducted from the withdrawal amount.
- Application Process: Taxpayers can register for tax using SARS’s digital channels, including eFiling, the SARS MobiApp, and the SARS Online Query System. Once registered, the pension fund will apply for a tax directive from SARS, which will be issued within 48 hours if the taxpayer is compliant.
- Debt Deductions: Any outstanding debt to SARS will be deducted from the withdrawal amount. If there is a debt arrangement with SARS, the withdrawal will not be affected.
- Tax Calculator: A tax calculator is available on eFiling and the SARS website to help pension fund members estimate their payout.
Should you have any queries in this regard please do not hesitate to contact our offices for professional advice.
© 2020 Nexia SAB&T. ALL Rights Reserved. Nexia SAB&T is a member of Nexia International, a leading, global network of independent accounting and consulting firms that are members of Nexia International Limited. Nexia International Limited, a company registered in the Isle of Man, does not provide services to clients. Please see the “Member firm disclaimer” for further details.