Adv. Carien van Dijk – Tax Director and Master Tax Practitioner at The Supremacy Group
On 1 October 2018, SARS announced that administrative penalties will be issued to companies for any outstanding tax returns.
The penalties will range from R250 to R16,000 per month, for as long as the non-compliance continues, together with the levying of accumulated interest based on 10% per month (as from 1 July 2018). The actual penalty amount will be based on the company’s taxable income or assessed loss.
So what happens if you have a company registered on your name, but it is dormant?
Regardless of whether a company is dormant or trading (with or without a profit), the tax returns have to be filed within the specified due dates, otherwise SARS will regard the company as non-compliant and will issue the abovementioned penalties (and interest) in terms of the Tax Administration Act No. 28 of 2011 (“TAA”).
It should also be noted that SARS also has the right to imprison the directors of the Company in terms of Section 234 of the TAA, which states that it is a criminal offense not to submit tax returns for any tax type a taxpayer is registered for.
SARS if giving all companies until end of November to rectify any non-compliance before the above will be in full force. Are you compliant?