Corporate Income Tax

What's New?

  • 12 November 2018 - Administrative Penalties for Corporate Income Tax (CIT) to be imposed

    SARS will be imposing administrative penalties from 07 December 2018 for outstanding Corporate Income Tax (CIT) returns.

    Administrative penalties will be imposed on companies that receive a final demand to submit a return. In terms of Section 210 of the Tax Administration Act of 2011, non-compliance with regards to non-submission of required CIT returns may be subjected to a penalty, as follows:
    • If SARS is satisfied that noncompliance by a person referred to in subsection (2) exists, excluding the non-compliance referred to in section 213, SARS must impose the appropriate ‘penalty’ in accordance with the Table in section 211.
    • Non-compliance is failure to comply with an obligation that is imposed by or under a tax Act and is listed in a public notice issued by the Commissioner, other than:
      • the failure to pay tax subject to a percentage based penalty under Part C; or
      • non-compliance subject to an understatement penalty under Chapter 16.

The penalties range from R250 to R16 000 per month that non-compliance continues, depending on a company’s assessed loss or taxable income. Companies that have outstanding CIT returns are requested to submit their return to SARS before the end of November 2018 to rectify non-compliance and prevent penalties being imposed.

Please note that it is compulsory for registered companies to submit their income tax returns. If a company is dormant, it is still required to submit any outstanding returns prior to 2018 to prevent a penalty being imposed. The criteria for the exception in 2018 are set out in Notice 600 of 15 June 2018.

  • 5 November 2018 - Corporate Income Tax (CIT) Filing Season: Important Changes coming

    SARS is updating the systems and processes pertaining to the filing of Income Tax returns for Companies to make provision for legal changes and continuous improvement enhancements. These changes will come into effect from 7 December 2018:

    • Enhancement of the current ITR14 form to allow for most recent legislative changes
    • Pre-pop of certain special allowances previously claimed
    • Replacement of the ITA34 with the new Notice of Assessment (ITA34C)
    • Enhancements to letters due to the renaming of the ITA34 to ITA34C and the legislative changes.

For the 2018 year of assessment, the filing requirements are as follows:

    • Every company or other juristic person, which is a resident that:-
      • derived gross income of more than R1 000
      • held assets with a cost of more than R1 000 or had liabilities of more than R1 000 at any time during the 2018 year of assessment
      • derived any capital gain or capital loss of more than R1 000 from the disposal of an asset to which the Eight Schedule of the Income Tax Act applies, or
      • had taxable income, an assessed loss or an assessed capital loss must submit a return.

Please note that it is compulsory for registered companies to submit their income tax returns. If a company is dormant, it is still required to submit any outstanding returns prior to 2018, to prevent a penalty being imposed.
 

  • 7 March 2018 - Grace period for the submission of the new IT10B schedule for Controlled Foreign Companies (CFC)

On 26 February 2018, the old IT10B Adobe PDF schedule was replaced with a simplified MS Excel IT10B schedule. The new schedule enables taxpayers to declare all CFC information for years of assessment 2012 onwards in one consolidated schedule that does not exceed the file upload limitation on the SARS eFiling.

In order to accommodate taxpayers who have already prepared their CFC information in the old schedule, SARS will grant all taxpayers a grace period in which the old schedule will be accepted as a valid supporting document for all income tax return submissions prior to 1 June 2018. The limitation of uploading only the first 10 schedules as supporting documents to the income tax return, in cases where there are more than 10 CFCs, will remain applicable in respect of the old schedule. SARS, however, urges taxpayers who have not yet started preparing their CFC information to make use of the simplified MS Excel IT10B schedule.

From 1 June 2018 all taxpayers who, together with any connected person, held at least 10% participation rights in any CFC must complete the CFC information in the new IT10B schedule. The new IT10B schedule must be uploaded as a supporting document in respect of CFCs for all income tax returns submitted from 1 June 2018 onwards. 

  • 26 February 2018 - Enhancements to the Income Tax Return for Companies (ITR14)
SARS implemented several changes to the Income Tax Return for Companies on 26 February 2018. Read more here.

 

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.

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 client information system.
  • 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 SARS branch 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. To find out your relevant code please click here.

When should CIT be paid?

Provisional Tax
  • 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.
Tax on Assessment
Payment of tax upon an assessment notice issued by SARS must be done within the period specified in such notice.
 
Corporate Income Tax is payable at a rate of 28%.

How should CIT be paid?

Payments can be made using the following options:
  • Online Banking
  • Electronic funds transfer
  • Bank payments
  • eFiling
  • Swift payment method (applicable only to foreign payments).
Note: Please refer to the guide on SARS Payment Rules for more information on the above methods of payment.
 
To access this page in different languages click on the links below:
Last Updated: 12/11/2018 1:44 PM     print this page
SARS eFiling eFiling Login eFiling Register Now eFiling Forgot Password eFiling Forgot Username E@syFile
FIND A PUBLICATION
FIND A FORM
FIND AN FAQ