Final SARS Carbon Tax Rules Released

Our team at Catalyst Solutions would like to wish you a prosperous 2020. This year will get off to a flying start from a carbon tax point of view with taxpayers required to license and prepare for the submission of the first returns and payments for the carbon tax period ending 31 December 2019. 

On the 23rd of December 2019, SARS released its final carbon tax rules. A summary is provided below –LicensingA taxpayer must obtain a consolidated licence for its emissions facilities as its customs and excise manufacturing warehouse. A customs and excise manufacturing warehouse is defined as ‘a combination of each of the emissions facilities of a taxpayer.’ Previously, a licence for each emissions facility was required. This change allows a taxpayer to obtain one licence for all its emissions facilities.
A taxpayer is not required to apply for a licence if the activity has a basic tax-free allowance of 100% or a tax threshold specified as ‘not applicable.
The period for licence application commenced on the 2nd of January 2020. There is no deadline by when licensing needs to have taken place, but it can be assumed to be before the 1st of July 2020 when the period for submission of returns and payment opens.
A licence will be approved by SARS effective from the 1st of June 2019.Returns and PaymentThe carbon tax must be calculated using a methodology approved by the Department of Environment, Forestry and Fisheries (DEFF) or readily available activity data and emission factors in the Intergovernmental Panel on Climate Change (IPCC) 2006 Guidelines or emission factors that are country-specific. The allowances and tax rate as specified in the Carbon Tax Act should be applied.
A consolidated annual account and its annexures are due for each tax period, along with a consolidated payment for the total environmental levy. The rules also note that ‘any supporting documents the Commissioner may request’ will also need to be submitted.
The documents and payment must be submitted before the penultimate working day in July every year following the tax period.
If you need assistance with licensing then please contact – – 084 2996873 513 8177
Remember that commentary is also due on the 17th of January 2020 on the draft regulations governing the performance allowances.

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