Gone are the days of late filing of or outstanding Corporate Income Tax (CIT) returns, without penalty.
In a message sent by the South African Revenue Service (SARS) on 3 October 2018, SARS indicates that, as of December 2018, it will be imposing administrative penalties for late/outstanding Corporate Income Tax (CIT) returns.
Administrative penalties will be imposed on companies (and other persons, natural and juristic) that receive a final demand to submit a return. The basis of the imposition of this administrative penalty is section 210 of the Tax Administration Act of 2011, which states that non-compliance with regards to non-submission of required CIT returns may be subjected to a penalty, as follows:
‘(1) If SARS is satisfied that noncompliance by a person referred to in subsection (2) exists, excluding the non-compliance referred to in section 213, SARS must impose the appropriate ‘penalty’ in accordance with the Table in section 211.
(2) Non-compliance is failure to comply with an obligation that is imposed by or under a tax Act and is listed in a public notice issued by the Commissioner, other than:
(a) the failure to pay tax subject to a percentage based penalty under Part C; or
(b) non-compliance subject to an understatement penalty under Chapter 16.’
The penalties range from R250.00 to R16 000.00 per month that non-compliance continues, depending on the particular entity’s assessed loss or taxable income.
Importantly to note is that it is compulsory for registered companies (and other entities delineated in terms of Notice 600 GG 41704 (15 June 2018)) to submit their income tax returns. Even if a company is dormant, it is still required to submit any outstanding returns prior to 2018 to prevent a penalty being imposed. The criteria for exemptions from such penalties are set out in Notice 600, which is available on the SARS website.
Make sure you get compliant – it’s part of doing business in South Africa.
If RM Tucker Attorneys can assist with any of your corporate/commercial needs, please let us know.