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Corporate Income Tax – SARS Penalises late returns

On 14 December 2018, the public notice that allows the South African Revenue Service (SARS) to impose penalties on companies for not submitting corporate income tax returns was gazetted.

What does this mean for corporates ?

Administrative non-compliance penalties will be imposed on companies that fail to submit a corporate income tax return as required under the Income Tax Act, 1962, for years of assessment ending during the 2009 and subsequent calendar years, where SARS has issued that company with a final demand, and where the company fails to submit the outstanding return within 21 business days of the final demand.

Penalties ?

Penalties will range from R250 to R16 000, depending on the company’s assessed loss or taxable income, for each outstanding return, and will increase by the same amount for every month that the non-compliance continues after the first penalty has been imposed.  This is in accordance with Chapter 15 of the Tax Administration Act, 2011.

Annual submissions ?

It is compulsory for all registered companies – small or large – to submit their corporate income tax returns within 12 months of the end of the company’s financial year.  This can be done on eFiling.

Importantly, dormant companies – as an example, registered companies that have no receipts or assets – are also required to file outstanding returns prior to 2018, to prevent a penalty being imposed.

In conclusion, all corporates should review their outstanding corporate income tax returns and file any outstanding submissions.

If you need any help with the matters noted above, please contact us and we will be happy to assist you.