SARS Corporate Income Tax

SARS Corporate Income Tax

• For the year of assessment (YOA) commencing on or after 1 January 2024, foreign tax credits cannot be claimed as a rebate in terms of section 6quin due to the fact that this section has been repealed. However, taxpayers can claim this type of foreign tax credit as a deduction in terms of section 6quat (1C).
• As from 1 March 2024, all qualifying companies operating within a Special Economic Zones (SEZ) will be taxed at a rate of 15% which is lower than the current corporate tax rate of 28%.
•  A question has been added on the return wizard for a company to indicate if it has changed its residency status and if it has, from what date.

Return enhancements:

• Dormant companies: The “Dormant Company Details” container now makes provision for dormant companies carrying on the activities of a nominee to declare taxable passive income received or accrued. Please note that it is a legal requirement to submit a tax return even if the company is dormant.
• The ITR14 return now has an option to indicate if the financial year end of the company changed during the relevant year of assessment.
• The containers for Local and Foreign Capital Gains and Losses now make provision for a new line item with a new source code for the “claw back” provisions in terms of section 45(5).
• A new field has been added to the “Non-Residency” container to indicate the date on which the company ceased to be a resident if applicable.
• IRP5 data will be pre-populated and locked. If you have more than twenty IRP5’s the twentieth one will not be locked, you can make changes on it.

Top Tip: To see an example of the new ITR14 form, click here.
Verification of details 
Before completing the ITR14 make sure that that the contact, address, banking and public officer details of the company are correct by verifying and updating it (if required) on the Registration, Amendment and Verification Form (RAV01). You can verify and update the RAV01 details by:

• Clicking on the “Maintain SARS Registered details” menu option on your eFiling profile. SARS may request you to visit a branch to verify any changes to your banking details which may have been done via eFiling.
• Visiting a SARS branch. Please consult the Registration, Amendments and Verification(RAV01) guide to prepare the mandatory supporting documents (relevant material) required for updating of banking and public officer details at a SARS branch.

Top Tip: Submissions and Request for Corrections (RFC) can be done electronically on eFiling or at a SARS branch.
Another tip: By selecting the ‘Refresh Return’ button SARS will automatically pre-populate the IRP5 certificate information available for the company from SARS systems. Any additional IRP5 data not pre-populated by SARS must be manually captured on the ITR14. All other data will be retained.

What is Corporate Income Tax?

Corporate Income Tax (CIT) is a tax imposed on companies resident in the Republic of South Africa (i.e. incorporated under the laws of, or which are effectively managed in, the Republic, and which derive income from within or outside the Republic. Non-resident companies which operate through a branch or which have a permanent establishment within the Republic are subject to tax on all income from a source within the Republic.
We have recently launched a new dynamic  ITR14 return as part of the modernisation of Corporate Income Tax aimed at improving efficiency and compliance. To find out  more about the new enhanced Income Tax Return for Companies (ITR14)  and what you must do, simply click here.
What’s New?
Small Business Corporations are reminded of the legislative amendments pertaining to the “Gross Income” threshold and progressive tax rates..

Who is it for?

CIT is applicable (but not limited) to the following companies which are liable under the Income Tax Act, 1962 for the payment of tax on all income received by or accrued to them within a financial year:

• Listed public companies
• Unlisted public companies
• Private Companies
• Close Corporations
• Co-operatives
• Collective Investment Schemes
• Small Business Corporation (s12E)
• Body Corporates
• Share Block Companies
• Dormant Companies
• Public Benefit Companies.

What steps must I take?

• • Register as taxpayer

  Every business liable to taxation, under the Income Tax Act, 1962, is required to register with SARS as a taxpayer.  You can register once for all different tax types using the

.

Top Tip: You must make sure your business details are up to date before you submit your ITR14. So visit our keeping my business details up to date to find out how to do this. 

• • Submit annual tax return

  Every registered taxpayer is required to submit a return of income twelve months after the end of the financial year, of such taxpayer, in the prescribed form.  Returns can be submitted electronically via  e-filing or manually at a

where the taxpayer is registered.

• Submit provisional tax returns

In addition to annual returns, every company is required to submit provisional tax returns. The first of these returns is required to be submitted six months from the start of the year, and the second at year end, and must contain an estimate of the total taxable income earned or to be earned for that period. Payment of the tax must accompany the return. A third “top-up” payment may be made six months after year-end.

Top Tip: When submitting your return you will need to give the SIC code for your business. 

When should CIT be paid?

• First payment – within six months from the beginning of the year of assessment
• Second payment – on or before the last day of the year of assessment
• Third payment – seven months after the year of assessment for taxpayers with February year-end and six months after year of assessment for all other cases.

How should CIT be paid?

• Online Banking
• Electronic funds transfer
• Bank payments
• eFiling
• Swift payment method (applicable only to foreign payments).