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.
DISCLAIMER: The material and information contained in this article is for general information purposes only. You should not rely upon the material or information in this article as the basis for making any business, legal or other decisions.