CARBON TAX DEADLINES AND SARS' CARBON TAX POLICY


Important updates:

1. Carbon tax deadlines


The deadline as set by SARS for submission of the customs carbon tax application on a form DA185 to licence for carbon tax is 30 September 2020.

This deadline leads into the opening of the carbon tax liability submission on 1 October 2020, for which the deadline for payment is 29 October 2020.

SARS will offer little leniency on late payment to companies who have not submitted their carbon tax licence applications by 30 September 2020 and are unable to meet the deadline for the carbon tax liability payment on 29 October 2020. At present SARS are experiencing turnaround times of 30 days from submission of an application to final approval. Late payment will most likely result in penalties and interest being applied.

Action point: submit application to license as a matter of urgency by 30 September.

2. SARS external policy


SARS has recently published the two following documents:
· An Excise External Policy on Carbon Tax; and
· An Excise External Completion Manual for DA180 forms and the associated annexures.

At a high level, a summary of these documents include the following:

Excise External Policy Carbon Tax:
  • The Excise External Policy on Carbon Tax outlines the administrative rules regarding the registration and filing of payment forms.
  • The policy document outlines the requirements for taxpayers which is aligned to the Customs Act, such as:
    • Records must be kept for a minimum of five years;
    • Clients have the right to appeal decisions taken in terms of the Customs and Excise Act – these can be made to the relevant appeal committee
    • The policy outlines the list of requirements for registration and licensing, forms to be completed and filed, as well as outlining the submission dates for this year and years to follow.
    • Taxpayers are advised to consider filing their environmental levy return forms as soon as possible after 1 October.
    • It is important to note:
      • If a taxpayers is unable to submit via the eFiling platform due to unforeseen technical challenges, which are totally out of the taxpayer’s resolve, then the completed DA 180, annexures and supporting documents must be handed over to an Auditor Excise (AE) for capturing on the SARS Service Manager (SSM) front-end system. This process should only be used under exceptional cases where eFiling cannot be used by taxpayers.
  • Important for the DA 180 (Payment forms):
    • For the 2019 DA 180 / EXD 180 account submission the GHG emission calculation submitted to DEFF is for twelve (12) months
    • Therefore the DA 180 forms in e-filing cannot be pre-populated as the data cannot be split for seven (7) months
    • For subsequent years the field would however be pre-populated with the DEFF confirmed emission equivalent
    • If a company uses a different methodology, the carbon tax account will generate the necessary annexure(s) for completion by the taxpayer to calculate the emission values in accordance with the formulas prescribed
Excise External Completion Manual DA180 and ANNEXURES
  • The Excise External Completion Manual provides an explanation of the sections of the levy forms which need to be completed for filing
  • The explanations of the fields on the forms are outlined in accordance with the Carbon Tax Act – the sections align with the emission calculations and categories provided in the Act.
SARS has additionally published a list of responses to Frequently Asked Questions on Carbon Tax on 21 September 2020. The responses can be accessed here.

One important note to highlight is question 15 in the FAQs outline the supporting documents required for the allowances. These are summarised as follows:
AllowancesSupporting Documents
Basic AllowancesNone
Trade Exposure AllowanceProof by taxpayer of allowance determination in terms of relevant methodology
Performance Benchmark AllowanceNone (Records must be kept for future SARS audits)
Carbon Budget AllowanceStandard Confirmation Letter from DEFF in legal entity name
Carbon Offset AllowanceRetirement Certificate from DMRE
Cova Advisory Contact:
Zelda Burchell
Carbon and Energy Manager
ZBurchell@cova-advisory.co.za