Industry updates | February 2023
Please take note of the following industry updates that may be relevant to you and your business.
COMPLIANCE AND ADMINISTRATION
Due dates for reporting and payments- February 2023:
TAX ADMINISTRATION
1. Provisional Tax Returns- Deadline:
The Second provisional tax return (IRP6) for the 2023 tax year is due to SARS by the 28th of February.
SARS will levy admin penalties for late submission as well as over or under declaration of your provisional tax.
Please ensure timely and accurate submission.
2. Late submission of an income tax return:
An administrative penalty for the late submission of an income tax return is levied under section 210 of the Tax Administration Act, No. 28 of 2011 (TAA). Currently the penalty imposed for the late submission of an income tax return in respect of an individual or company is as follows:
- Personal income tax (PIT): With effect from 1 December 2022, a penalty will be imposed when the taxpayer has failed to submit one or more income tax returns in respect of the 2007 and subsequent years of assessment.
- Corporate income tax (CIT): The penalty is imposed where the company has failed to submit an income tax return for years of assessment ending during 2009 and subsequent years, specifically where SARS has issued the company with a final demand referring to the public notice requiring the submission of the outstanding income tax return, and the company failed to submit the return within 21 business days of the date of issue of the final demand.
The abovementioned administrative penalties are based on a taxpayer’s taxable income and can range from R250 up to R16 000 per month where a taxpayer fails to remedy the non-compliance.
3. SARS timelines and closure period:
The festive season triggers expected delays in dispute resolution processes, which is dealt with from a Legislative perspective by deeming certain days to be dies non. Where a period is regarded as dies non, it means that these days will not be counted for the purpose of calculating the respective time periods.
The Legislative basis for dies non can be found in section 1 of the Tax Administration Act, No. 28 of 2011 (the TAA), where a ‘business day’ is defined as follows: “business day means a day which is not a Saturday, Sunday or public holiday, and for purposes of determining the days or a period allowed for complying with the provisions of Chapter 9, excludes the days between 16 December of each year and 15 January of the following year, both days inclusive”
Based on the definition, the days between 16 December of a year and 15 January of the following year (both days included), are excluded from the time periods allowed to comply with the provisions of Chapter 9 (Dispute Resolution) of the TAA.
4. Submitting NIL returns? SARS wants to know why:
With the submission of nil tax returns for purposes of obtaining a Tax Compliance Status (TCS) being brought into sharp focus in the 2022 proposals, SARS is conducting surveys to find out why taxpayers and tax practitioners really submit nil returns.
SARS has selected a sample of taxpayers and tax practitioners to participate in an ongoing survey to determine why they submit nil returns. SARS has further indicated the survey results will assist SARS in reviewing and improving its internal processes.
- Domonique Ramos | 01 February 2023