South Africa

Taxable period

The corporate tax year is the same as the company’s financial year. It may be changed upon application showing reasonable cause.

Tax returns

Annual income tax returns must be submitted within one year from the end of the company’s tax year. The annual tax return includes a supplementary reconciling return where requested. Furthermore, schedules apply for CFCs, short-term insurers, mining companies, headquarter companies, and learnership allowances.

‘Signed off’ financial statements are required to be submitted with the annual tax return.

Payment of tax

Payments are made with provisional returns filed at six-month intervals from the tax year-end based on an estimate of taxable income for the year. Interest is charged on any underpayment outstanding for more than six months after the tax year-end, except in the case of February year-ends, in which case it is seven months. Any balance (together with interest) is then paid following assessment.

Tax audit process

There is no prescribed audit process, and an audit can be initiated by any factor as determined by the SARS. The audit or inspection will commence with a request from the SARS for the taxpayer to make available any such records or information as may be required.

Statute of limitations

Tax debts to the state prescribe after a period of 15 years. Tax returns submitted that have been assessed may not be reopened after a period of three years from date of assessment by the SARS or five years if it is a self-assessment by the taxpayer, unless there has been fraud, misrepresentation, or non-disclosure by the taxpayer.

The prescription period may be extended by three years in the case of an assessment by the SARS or by two years in the case of self-assessment in respect of certain complex matters, such as transfer pricing and general anti-avoidance cases.

Topics of focus for tax authorities

The SARS, in their 2020/21 to 2024/25 Strategic Plan, stated that the key strategic focus of the SARS will be the following:

• Providing clarity and certainty for taxpayers and traders of their obligations.
• Making it easy for taxpayers and traders to comply with their obligations.
• Detecting taxpayers and traders who do not comply, and making non-compliance hard and costly.
• Developing a high performing, diverse, agile, engaged, and evolved workforce.
• Increasing and expanding the use of data within a comprehensive knowledge management framework to ensure integrity, derive insight, and improve outcomes.
• Modernising SARS systems to provide digital and streamlined online services.
• Demonstrating effective resource stewardship to ensure efficiency and effectiveness in delivering quality outcomes and performance excellence.
• Working with and through stakeholders to improve the tax ecosystem.