SARS will be imposing administrative penalties from December 2018 for outstanding Corporate Income Tax (CIT) returns.
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:
(1) 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.
(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 to R16 000 per month that non-compliance continues, depending on a company’s assessed loss or taxable income.
A typical message from SARS would be: “According to our records your company has been identified as having one or more CIT returns outstanding. We request that you submit your return to SARS before the end of November 2018 to rectify your non-compliance and prevent penalties being imposed”.
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 are set out in Notice 600 of 15 June 2018 issued by the Acting Commissioner of SARS, Mr Mark Kingon. For further information refer to Government Gazette Number 41704 dated 15 June 2018.