Your contributions as an SMME help to grow and strengthen our economy. SARS is dedicated to making it simple to meet your tax obligations. The goal of this newsletter is to give you simplified information and the guidelines you need to comply with your tax obligations.
SARS participated in the Township Economies Conference and EXPO that was held at Emperor’s Palace in the City of Ekurhuleni on 30 and 31 July 2024. The focus of this innovative event was “Unlocking our townships economic potential”. Delegates included industry experts, business leaders, policymakers, township business owners and community residents. The event presented SARS with the opportunity to engage with taxpayers on their business and individual tax matters through the Mobile Tax Unit.
PAYE Bi-Annual Filing Season 2024
The Bi-Annual EMP501 Reconciliation Submission period is from 16 September to 31 October 2024.
You must always back up current information on your computer prior to installing the latest version, as the installation may delete your current information. You must also delete any beta test version downloaded prior to installing the latest version of e@syFile™. Before importing the file, make sure that it aligns with the requirements in the most recent BRS to prevent rework.
View the BRS – PAYE Employer Reconciliation for 2024/25 for more information and guidance on the submission process.
SMME employers are advised to submit EMP201s monthly as this will make it easy for the bi-annual submission. Employers can use any of the following channels:
- eFiling (request and submit);
- eFiling ISV (submit); or
- e@syFile Employer (request and submit).
Channels to submit EMP501
- Employers with less than 50 employees can use SARS eFiling or SARS e@syFile™.
- Employers with more than 50 employees must use SARS e@syFile.
Penalties for non-compliance
- An employer who files an EMP501 reconciliation late will be penalised under the provisions of paragraph 14(6) of the Fourth Schedule to the Income Tax Act.
- The penalty will equal 1% of the year’s PAYE for each month that the return is late, up to 10% of the year’s PAYE.
- If the EMP501 is received at any point during the 10 months after the close of the Filing Season, the 1% incremental administrative penalty will stop recurring.
Company Income Tax deregistration process at SARS
Companies that are registered or generating profits or income in South Africa are subject to the Company Income Tax (CIT). These companies must register for CIT with SARS, file annual and provisional tax returns, and pay their CIT liability on time to avoid penalties and interest charges.
However, a company may no longer need to register for CIT if it has ceased trading, undergone liquidation or dissolution, or has no taxable income or assets in South Africa. In these cases, the company can apply for deregistration from CIT with SARS and stop receiving CIT compliance obligations.
Applying for CIT deregistration with SARS
The company must ensure that it has filed all its previous tax returns and paid all its tax liabilities before applying for CIT deregistration. If the company has any outstanding tax obligations, it must contact SARS to arrange for settlement or dispute resolution. Before approving the application, SARS may also conduct an audit or verification of the company’s affairs.
To be deregistered, the company must prove that it meets one of the following criteria:
- It has ceased to trade or carry on any business activity in South Africa;
- It has been liquidated or dissolved by court order or voluntary resolution;
- It has no taxable income or assets in South Africa and does not intend to derive any in the future; or
- It is a dormant company that has not traded for at least three consecutive years and has no intention of trading in the future.
It must also submit supporting documents, which may include:
- A letter from the company’s Board of Directors or a resolution stating the reasons for applying for CIT deregistration;
- A copy of the company’s final financial statements or audited accounts;
- A copy of the company’s liquidation or dissolution notice or certificate;
- A declaration of assets and liabilities of the company;
- A confirmation of the company’s bank account closure or balance; or
- Proof of payment of any outstanding tax debts or penalties.
The company can submit the application and supporting documents online via eFiling, email, or at a SARS branch. Upon processing and approval of the application, SARS will issue a confirmation letter to the company and deactivate its tax reference number. The company will then no longer be liable for CIT or any related compliance obligations. However, the company must keep its records for at least five years after deregistration in case of any queries from or audits by SARS.
Employer deregistration at SARS
- An employer who has ceased to operate or employ must apply for company deregistration to avoid further compliance obligations.
- The employer must submit an EMP123 form and supporting documents to SARS.
- The employer must pay any outstanding tax debts or penalties before they can be deregistered.
- The employer will receive a confirmation letter, and their tax reference number will be deactivated.
Voluntary Disclosure Programme
The Voluntary Disclosure Programme (VDP) is permanently available to a qualifying individual, company, or Trust that seeks to voluntarily disclose and regularise its tax affairs. SARS urges all taxpayers who may be in default on their tax affairs to approach SARS via the VDP. It is crucial to willingly seek assistance and guidance from the service to resolve your issues before SARS pursues you for non-compliance.
A defaulting taxpayer will be granted relief under the VDP if the disclosure:
- Is voluntary;
- Is full and complete in all material respects;
- Involves a default that has not occurred within five years of the disclosure of a similar default;
- Involves a behaviour referred to in the understatement penalty table in section 223 of the Tax Administration Act;
- Would not result in a refund due by SARS; and
- Is made in the prescribed form and manner.
Who can apply?
All SMMEs that have tax defaults, seek relief from penalties and want to avoid possible criminal prosecution can voluntarily disclose their outstanding tax affairs.
If an SMME is registered for SARS Voluntary Disclosure Programme (VDP) these are the key things to consider:
- Previous default – If you’ve defaulted within five years of disclosing a similar issue, you might not be eligible for the VDP again.
- Voluntary Disclosure – The disclosure must be made before SARS initiates an audit or criminal investigation
- Complete Disclosure – The disclosure must be full and complete in all material aspects.
How to apply?
All prospective applicants can apply for VDP via SARS eFiling.
Need help?
Write us an email: [email protected]
Call us: 0800 864 613
Visit: Voluntary Disclosure Programme (VDP)
What’s new? – WhatsApp
SARS has launched a new WhatsApp channel to provide clarity and certainty, as well as make it easy for taxpayers to obtain relevant information. Taxpayers can now use WhatsApp to interact with SARS for tax advice and specific personal Income Tax queries. To use the WhatsApp SARS number (0800 11 7277):
- Read and accept the terms and conditions for using the platform; and
- Text “Hi” or tax related query to SARS.
SMMEs can use this platform to answer general tax-related questions, although the tax service menu currently caters to Personal Income Tax.
Click here to learn more about our WhatsApp channel and other mobile tax services.
#YourTaxMatters www.sars.gov.za
