In terms of the Tax Administration Act No.28 of 2011 (“TAA Act”), with specific reference to Sections 210 and 211, SARS can impose a fixed amount penalty where a taxpayer is non-compliant due to a failure to comply with an obligation imposed in terms of a tax act.
Failure to file your annual income tax return would potentially fall within the provisions of these sections of the TAA Act.
What is important is that, in order for SARS to apply the provisions set out in Sections 210 and 211, SARS must have listed the non-compliant behaviour specifically in a public notice issued by the Commissioner.
To date, in the context of annual income tax returns, this has only been done with reference to individual tax returns and has not included corporate or trust annual tax returns.
SARS has thus been unable to apply the fixed amount penalties to corporate tax payers who have not submitted these annual tax returns timeously.
Why this has been the case up to this point in time is unknown but this is about to change.
SARS have indicated that as from 1 December 2018 they will be applying the fixed percentage penalties to corporate taxpayers who have one or more corporate income tax returns outstanding.
Although at this point the Commissioner has not yet factually issued the required public notice this is certain to happen in the next few weeks.
In principle what this means is that non-compliant corporate taxpayers will have until 30 November to file all annual tax returns that should already have been filed.
If this is not done SARS will start applying the fixed amount penalty provisions which vary from a low of R 250 per month to a high of R 16 000 per month.
If returns are long outstanding this could result in extremely high penalties being levied against taxpayers in the very near future.
So simply put, non-compliant corporate taxpayers need to get their house in order over a very short timeframe.
Director | Corporate and International Taxation
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