Monthly Archive for: ‘September, 2020’

Fixed rate penalties can be imposed by SARS for non–compliance with any procedural or administrative action or duty imposed or requested, for example: Not registering when required to Not informing SARS where there is a change in registration details Not filing returns Not retaining records as required by SARS The fixed rate penalty does not apply where the percentage base …

The percentage based penalty is imposed where SARS is satisfied that the taxpayer has not paid the tax as and when required under a Tax Act. This penalty is equal to a percentage of the tax not paid. The following percentage based penalties will be imposed:

The understatement penalty is a percentage in accordance with the table set out below and is applied to the shortfall of the tax. It applies to all taxes and could be charged when there is a default in rendering a return, an omission from a return, an incorrect statement in a return and, if no return is required, the failure …

Provisional tax is payable by all taxpayers except natural persons if: That person does not derive any income from the carrying on of any business, and Taxable income of that person for the year of assessment will not exceed the tax threshold, or The taxable income of that person for the year of assessment which is derived from interest, foreign …

In order to qualify as a PBO an entity needs to have as its main object the carrying out of one or more public benefit activities in a non-profit manner substantially in South Africa. These activities need to qualify in one or more of the following categories: welfare and humanitarian health care land and housing education and development conservation, environment …

Residents are taxed on their worldwide income, subject to certain exclusions. Definition of resident Natural Person (see flowchart further in this guide) any natural person who is ordinarily resident in South Africa, or any natural person who is not ordinarily resident in South Africa but who: is physically present in South Africa for a period exceeding 91 days in aggregate …

A Controlled Foreign Company (CFC) means any foreign company where more than 50% of the total participation rights or voting rights are directly or indirectly exercisable by one or more residents. South African residents must impute all 35 income of a CFC in the same ratio as the participation rights of the resident in such a CFC, subject to a …

Foreign Dividends received from a non–resident company are taxable.Foreign dividends are, however, exempt as follows: If received by a resident who holds at least 10% of the equity shares in the foreign company The shareholder is a company which is in the same country as the foreign company paying the dividend If declared by a company listed on the SA …

Residents are allowed to deduct all foreign taxes paid in respect of foreign source income from the tax payable in South Africa on such foreign income. Any excess credits may be carried forward. Where foreign tax is withheld on South African source income, the taxpayer can claim a deduction against income.

Note: The records, books of account and documents must be retained in their original form in a safe place, or electronic format as prescribed by the Commissioner or in a form authorised by a senior SARS official.