Business

Tax changes for businesses in South Africa – what you need to know

Staff Writer

 ·23 Jun 2023

The South African Revenue Service (SARS) has introduced system-wide changes for Corporate Income Tax (CIT) which take effect from Friday, 23 June 2023. The changes relate directly to the Income Tax Return for Companies (ITR14) and the Notice of Assessment for Companies (ITA344C).

According to the tax authority, a limited number of source code descriptions will also be updated.

“As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies and tax practitioners to keep abreast of such changes so that companies continue to meet their tax obligations,” SARS said.

SARS provided the following non-exhaustive list of legal changes impacting CIT:

• An update to the core systems to accommodate the assessed loss calculations in terms of section 20.

• An update to the ITR14 to identify paragraph 13(1)(a) and 13(1)(b) deductions for purposes of extending the prescription period on disputes.

• Removal of the Solidarity Fund Donations (excl. any other Donations) container on the ITR14 to align with the new Section 18A requirements.

• The Public Benefit Organisations (PBO) number(s) declared on the return when claiming donations will be validated against the SARS’s PBO register for validity.

• A Share Register will be added to the ITR14 return, which will enable the capturing of the classes of shares, and the details of the holders of shares per class of share.

• The “Taxable Distribution(s) from all Trusts(s)” container will be enhanced to enable the taxpayer to declare the details of each distribution received from a Trust.

• An update to source code descriptions where applicable.

All companies resident in South Africa are obligated to pay Corporate Income Tax (CIT). The tax is applicable, but not limited to, public companies, private companies, non-profits, close corporations and state-owned entities.

“For the years of assessment ending on 31 March 2023 and later, the rate of Corporate Income Tax payable is 27% (previously 28%),” said SARS.

Every business that is liable to taxation must be registered with SARS and pay corporate income tax. An ITR14 must be submitted electronically via SARS’s e-Filing system.

According to SARS, CIT should be paid periodically, with a first payment within six months after the start of the year of assessment, a second payment on or before the last day of the year of assessment and a third payment six months after the end of the year of assessment.

“Payment of tax upon an assessment notice issued by SARS must be done within the period specified in such notice.”

See an example of the updated form below:

Read: SARS is upgrading its systems – here’s what you need to know