SA tax penalties on companies

Tax Penalties

On 14 December 2018, the public notice that allows the South African Revenue Service (“SARS”) to impose penalties on companies for not submitting income tax returns was gazette. This is a new addition to the legion of penalties already faced by companies and permits the imposition of a monthly penalty on a company ranging from anything between R250 to R16 000 a month.

Other penalties also faced by companies include:

  • A 10% penalty for not filing a VAT return on time (if VAT registered);
  • A 10% penalty for not filing a employees’ tax return on time (if registered as employer)
  • A 10% penalty for not filing a provisional tax return on time;
  • A 20% penalty for not accurately submitting a provisional tax return; and
  • A penalty ranging from anything between 5% and 200% in the case of a taxpayer making an understatement.

Ensuring tax compliance by corporates is obviously important, hence the always lingering threat of sanction in the form of a monetary penalty for non-compliance. However, ensuring tax compliance should never amount to an abuse of power or infringement of taxpayer’s rights.

Article: SAIT