Carbon tax payment requirements for SARS

Carbon tax payment requirements for SARS

Your company’s installed capacity is above the allocated threshold for your industry which means that you have had to report your GHG emissions to, and register with, the Department of Environment, Forestry and Fisheries (DEFF) before 31 March 2020. So now what?

Your company will have to make a payment to SARS, based on your emissions reported to DEFF at a rate of R120 per tonne of CO2e for the 2019 period.

There are two steps involved to ensure that you can make payment to SARS:

Step 1

The first step is the licencing of your emission generating facilities with SARS (usually before 31 July annually but due to the coronavirus pandemic, this deadline has been extended to 31 October 2020 for the 2019 period). This needs to be done immediately.

The licensing procedure is as follows:

1. Download from from SARS website

  • The Carbon Tax licence procedures fall under the Customs and Excise branch of SARS
  • Two forms will need to be completed, namely, DA185 and DA185.4B2

2. Submission of forms

3. Supporting documents

  • Certified copy of the registration certificate of the business
  • Certified copy of identity or passport documents of individuals, partners, all members of close corporation, and trustee/all directors of the company
  • Confirmation of physical address of the company
  • Confirmation of business or applicant bank details
  • Resolution or consent on a company letterhead
  • Letter of authority/Power of Attorney for person submitting applications on behalf of a company/director.

 

 

The forms and supporting documents should be submitted at the nearest Customs and Excise office. The following branches will be in charge of the carbon tax licensing applications:

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  • Alberton
  • Pretoria
  • Cape Town
  • Durban

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  • Port Elizabeth
  • Bloemfontein
  • Upington
  • Stellenbosch

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Due to the COVID-19 restrictions, alternate arrangements have been made to send this application to carbontax@sars.gov.za for the time being.

No licence fee is applicable and licenses should be renewed on an annual basis. Only the DA185 and DA185.4B2 forms will need to be submitted each year for renewal of the licence (this needs to be done 30 days prior to the expiration of the preceding licence). The supporting documents only need to be submitted for the initial submission.

Step 2

The second step with regards to SARS is the creation of a carbon tax levy account (to be done on 1 October 2020).

This process will need to be done via SARS eFiling for each facility through the ‘Excise Levies and Duties’ option:

The DA180 form comes with six annexures and completion notes:

  • DA180.01A.1 – Fuel Combustion (Stationary)
  • DA180.01A.2 – Fuel Combustion (Non-Stationary)
  • DA180.01B.1 – Fugitive (Oil and Natural Gas)
  • DA180.01B.2 – Fugitive (Coal Mining and Handling)
  • DA180.01C – Industrial Process
  • DA180.02 – Carbon Tax Allowances
  • Completion notes to DA180 carbon tax account

Your company will be required to fill in all relevant fields pertaining to your operations. These forms can be downloaded from SARS.

You can also obtain further information regarding the submission of the annual carbon tax environmental levy account in this link, including frequently asked questions.

Carbon tax liable companies should aim to start the account preparation process on 1 October so that if there are any teething problems with any of the systems, there will be sufficient time to rectify these errors.

Once your account is created and information entered on the SARS eFiling platform, you will be able to make payment of your carbon tax liability to SARS.


If you need assistance with any of the above, please contact Teegan Govindasamy at Teegan.govindasamy@climateneutralgroup.com

Teegan Govindasamy | Carbon Advisor

Teegan works with companies to help them understand and furthermore minimise their carbon tax liability in South Africa.

Paying less carbon tax = investing in carbon offsets

Paying less carbon tax = investing in carbon offsets

On 23 July 2020, the Department of Mineral Resources and Energy (DMRE) launched the Carbon Offset Administration System (COAS) which will allow carbon tax liable entities to further reduce their carbon tax through an additional tax relief mechanism known as the carbon offset allowance. An offset price lower than the current carbon tax price (R120/tCO2e for 2019) will generate a saving for carbon tax liable entities.

Climate Neutral Group’s portfolio of eligible offsets comprises a wide range of project types such as landfill gas to energy, renewable energy and energy efficiency as well as the Group’s flagship Wonderbag project. These offsets can be used within the first phase of the carbon tax (1 June 2019 – 31 Dec 2022).

The approval process of an offset project is extensive as it needs to be located in South Africa only and registered under either the Clean Development Mechanism, Gold Standard or the Verified Carbon Standard, amongst other qualifying criteria by the DMRE.

The deadline for carbon tax submission is fast approaching (29 October 2020) and there are a few additional steps that need to be followed in order for entities to make use of this additional tax relief mechanism. A carbon tax offset certificate (Regulation 8(e) of the Carbon Offset Regulations) must be generated by the COAS and then submitted to SARS before making payment of your final carbon tax liability.

Climate Neutral Group can assist with all the steps required to ensure that your company receives this tax relief mechanism for the 2019 period. Get in contact with one of our carbon tax advisors below:

Silvana.claassen@climateneutralgroup.com or Teegan.govindasamy@climateneutralgroup.com.

> Begin the registration process with the Carbon Offset Administration System.

Climate Neutral Group can provide your company with a variety of carbon-related services that include:

  • Carbon management & offsetting advisory firm
  • Mandatory reporting
  • Carbon tax liability
  • Carbon offset development
  • Assistance with setting up your COAS account
  • Carbon footprint and (CDP) reporting
  • Low carbon transition plans
South Africa launches Carbon Offset Administration System

South Africa launches Carbon Offset Administration System

The implementation of the South African Carbon Tax has finally reached completion with the launch of the Carbon Offset Administration System (COAS). This follows the gazetting of the regulations on trade exposure and performance benchmarks one month ago and the announcement by SARS three days ago that restrictions on applications for Carbon Tax registration/licensing have been lifted.

What this means is that everything is in place for South Africa’s carbon-tax payers to prepare their carbon tax environmental levy account, due 31 October 2019. More importantly, the administrative systems are now operational meaning that all applicable allowances can be claimed, including those for trade exposure and carbon intensity performance as well as for allowances resulting from the investment in carbon offsets as per section 13 of the Carbon Tax Act.

The Carbon Offset Administration System will be managed by the Department of Mineral Resources and Energy (DMRE) and will allow project developers to submit project applications and emitters to surrender offsets against their carbon tax obligations.

Credits from South African projects certified under the CDM, Gold Standard, and Verified Carbon Standard (VCS) will be allowed providing they meet the criteria outlined under the gazetted Carbon Offset Regulations.

If you are a taxpayer as per the Carbon Tax Act No 15 of 1 June 2019, now is the time to reduce the financial implications of the tax by purchasing carbon offsets. Climate Neutral Group has a wide portfolio of eligible credits that can be used under South Africa’s Carbon Tax.

Emitters and project owners are invited to register and set up their COAS account:

http://carbon.energy.gov.za/Maintenance/admRegistration.aspx

For more information, please find the Media statement from the Department of Mineral Resources and Energy below:

MediaStatement-South-African-Carbon-Offsets-Administration2020