The South African Revenue Service (SARS) has recently implemented comprehensive adjustments to the Corporate Income Tax (CIT) system, which came into effect from the 23rd of June, 2023. These modifications directly pertain to the Income Tax Return for Companies (ITR14) and the Notice of Assessment for Companies (ITA344C).
Staying Informed
SARS emphasizes that a select number of source code descriptions will also undergo updates.
“As laws, regulations, and tax statutes continuously evolve, it remains crucial for companies and tax professionals to stay informed about such alterations to ensure their continued adherence to tax responsibilities.” stated SARS.
Key Changes to Corporate Income Tax
SARS has outlined several legal amendments impacting CIT, including:
- Enhancement of Core Systems: The core systems will be updated to accommodate assessed loss calculations as per section 20.
- Updates to ITR14: The ITR14 will be updated to distinguish deductions under paragraph 13(1)(a) and 13(1)(b) for the purpose of extending prescription periods on disputes.
- Solidarity Fund Donations: The Solidarity Fund Donations container will be removed from ITR14, aligning with new Section 18A requirements.
- Validation of PBO Numbers: Public Benefit Organisations (PBO) numbers declared in returns for donation claims will be validated against SARS’s PBO register.
- Inclusion of Share Register: The ITR14 return will include a Share Register, allowing the recording of share classes and holder details per class.
- Enhanced Trust Distribution Reporting: The “Taxable Distribution(s) from all Trusts(s)” container will be enhanced, enabling taxpayers to declare individual distribution details from Trusts.
- Updates to Source Code Descriptions: Source code descriptions will be updated as necessary.
Obligations for All Companies
All companies operating within South Africa are obligated to fulfill Corporate Income Tax (CIT) payments. This applies to public companies, private companies, non-profit organizations, close corporations, and state-owned entities.
SARS clarified, “For assessment years ending on or after 31st March 2023, the Corporate Income Tax rate is set at 27% (previously 28%).”
Meeting Tax Obligations
Every taxable business is required to register with SARS and remit corporate income tax. Submission of the ITR14 is to be carried out electronically through SARS’s e-Filing system.
SARS advises that CIT payments should be made periodically, with the first payment within six months from the assessment year’s start, a second payment by the year of assessment’s end, and a third payment six months after the assessment year concludes.
“It’s imperative to settle tax payments within the specified timeframe outlined in the assessment notice issued by SARS.”
Conclusion
Remember that these tax changes are crucial for businesses to understand and adapt to. Stay informed and aligned with these modifications to ensure compliance with your tax obligations.
