In South Africa, SARS is using more advanced technology to check if people are paying the right amount of tax. They compare information from banks, employers, and other sources, and can even look at your lifestyle to see if it matches what you declare.
Getting flagged doesn’t always mean you have done something wrong, but certain mistakes or unusual patterns in your tax return can draw their attention. Knowing what commonly triggers an audit can help you submit your tax return correctly and avoid extra stress.
Income Discrepancies
One common red flag is when the income you report on your tax return doesn’t match the information SARS already has from third parties, such as your employer (IRP5), bank (IT3b certificates), or investment platforms. Even minor differences can trigger an audit.Excessive or Unusual Deductions
Claiming unusually high deductions like travel, entertainment, or home-office expenses that don’t align with your job, industry standards, or income level can draw attention. SARS may then ask you to provide supporting documents.Undeclared Capital Gains
Capital gains from the sale of property, shares, or other assets must always be declared. SARS actively cross-references deeds office records, stockbrokers, and investment companies. Failing to report capital gains is a major audit trigger.Lifestyle Not Matching Declared Income
If your lifestyle such as luxury cars, international travel, or multiple property ownership appears inconsistent with your reported earnings, SARS may investigate the source of your funds. This is often referred to as a “lifestyle audit.”Frequent Large Tax Refunds
Taxpayers who consistently submit returns resulting in refunds, particularly when linked to large deductions or allowances, are more likely to face additional scrutiny.Major Year-to-Year Variations
Significant changes in reported income, expenses, or claims, without proper explanation or documentation, can raise red flags and trigger closer scrutiny.
If you have any questions or would like to find out more, call us on (011) 794-5582 or email us on info@tlok.co.za