Beware the New Corporate Income Tax Penalties! And Your Tax Deadlines For November

There are only run-of-the-mill tax deadlines for November but companies need to take note of a new warning from SARS that it will be imposing administrative penalties from December 2018 for outstanding Corporate Income Tax (CIT) returns.  Until now, penalties have only been imposed for failure to lodge personal returns.

The penalties, says SARS, “range from R250 to R16,000 per month (see Table below) that non-compliance continues, depending on a company’s assessed loss or taxable income” (our emphasis), and will apply to companies which have been issued a final demand to submit a return.

Note also that this also applies to dormant companies: “If a company is dormant, it is still required to submit any outstanding returns prior to 2018 to prevent a penalty being imposed.”

Table: Amount of Administrative Non-Compliance Penalty

 Assessed loss or taxable income

for ‘preceding year’

Assessed loss R250
R0 – R250,000 R250
R250,001 – R500,000 R500
R500,001 – R1,000,000 R1,000
R1,000,001 – R5,000,000 R2,000
R5,000,001 – R10,000,000 R4,000
R10,000,001 – R50,000,000 R8,000
Above R50,000,000 R16,000

(Adapted from the Tax Administration Act)