28 January 2019 – Administrative Penalties for Corporate Income Tax (CIT) to be imposed!

  • SARS will be imposing CIT Administrative penalties from 28 January 2019. Administrative penalties will be imposed on companies that receive a final demand to submit a return. In terms of Section 210 of the Tax Administration Act of 2011, non-compliance with regards to non-submission of required CIT returns may be subjected to a penalty, as follows:
    • If SARS is satisfied that non-compliance 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.
    • 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:
      • the failure to pay tax subject to a percentage based penalty under Part C; or
      • non-compliance subject to an understatement penalty under Chapter 16.

The penalties range from R250 to R16 000 per month that non-compliance continues, depending on a company’s assessed loss or taxable income.

Please note that it is compulsory for registered companies to submit their income tax returns. 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 the exception in 2018 is set out in Notice 600 of 15 June 2018.

  • Corporate Income Tax (CIT) Filing Season: Important Changes coming 

    SARS is updating the systems and processes pertaining to the filing of Income Tax returns for Companies to make provision for legal changes and continuous improvement enhancements:

    • Enhancement of the current ITR14 form to allow for most recent legislative changes
    • Pre-pop of certain special allowances previously claimed
    • Replacement of the ITA34 with the new Notice of Assessment (ITA34C)
    • Enhancements to letters due to the renaming of the ITA34 to ITA34C and the legislative changes.

For the 2018 year of assessment, the filing requirements are as follows:

    • Every company or other juristic person, which is a resident that:-
      • derived gross income of more than R1 000
      • held assets with a cost of more than R1 000 or had liabilities of more than R1 000 at any time during the 2018 year of assessment
      • derived any capital gain or capital loss of more than R1 000 from the disposal of an asset to which the Eight Schedule of the Income Tax Act applies, or
      • had taxable income, an assessed loss or an assessed capital loss must submit a return.

Please note that it is compulsory for registered companies to submit their income tax returns. If a company is dormant, it is still required to submit any outstanding returns prior to 2018, to prevent a penalty being imposed.