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2019 FIRST PROVISIONAL TAX RETURNS AND PAYMENTS DUE 31 AUGUST 2018


August sees the first provisional tax deadline for 2019 of all registered provisional taxpayers with February year ends. 

While SDK is in the process of working with you to determine your first provisional tax payment and to ensure compliance with SARS, here are a few factors to consider:
  1. Provisional tax is not a type of tax, it should rather be seen as a pre-payment of your income tax.
  2. The first provisional tax period is generally an estimate of what you anticipate your taxable income to be in the next tax year of assessment.
  3. It is highly recommended that the taxpayer should not submit an estimate which is less than the basic amount.
  4. Payments to SARS should be made by 28 August 2018 to limit the risk of payments be deemed late.


SARS PAYMENT METHODS

Please note that SARS no longer accepts payment per cheques. Alternative payment options are the following:
  1. Electronic Transfer (EFT)
  2. Making payment at your bank using the tax statement as proof
  3. E-Filing

How is the first provisional tax calculated?

Step 1: The total estimated taxable income for the year x the relevant tax rate = Tax payable for the whole year.

Step 2: Then the tax payable for the whole year is divided in half to obtain the portion of tax due for the first six months of the year.

Step 3: Any tax credits (such as employees tax, foreign tax credits and medical tax credits) are deducted from the tax amount calculated in step 2 to obtain the amount that needs to be paid to SARS by 31 August.


SARS verifications and first provisional tax declarations

SARS has started to request supporting documentation for the first provisional tax declarations that have been made, mostly where the declaration is less than then basic amount. The type of supporting documentation that you should have ready should it be requested from SARS is:
  1. Current year management accounts used to calculate the estimate income
  2. Tax Computation
  3. Reasons for amounts used in declaration
The above list is not extensive, and SARS may request any information they deem necessary to verify the declaration made.



CIPS NEWS

Lodgement of Annual Returns to CIPC

What is it?:  This is a statutory return in terms of the Companies and Close Corporations Acts and therefore MUST be complied with.
Who:  All Private, Public, External, Incorporated Companies and Close Corporations
When:  Companies:   have 30 business days from the date that the entity become due to file annual returns before it is in non-compliance with the Companies Act, and a penalty will be due.  Close Corporations have from the first day of its anniversary month up until the thereafter to file Annual Returns before it is non-compliance with the Close Corporations Act.
How:  Annual Returns can only be filed electronically on CIPC’s website (you first have to register as a costumer).
Cost:  This cost will be calculated according to your annual turnover
What happens if I do not lodge my Annual Returns on an Annual basis:  Failure to do so will result in the Commission assuming that the company and/or close corporation is not doing business or is not intending on doing business in the near future. Non-compliance with annual returns may lead to deregistration, which has the effect that the juristic personality is withdrawn and the company or close corporation ceases to exist.


Lodgement of AFS or FAS

Companies are required to file either one of the following with its annual returns submission:
  • its audited financials; 
  • reviewed financials; or 
  • financial supplement (FAS) CoR30.2

When to submit AFS:

- If your entity still has a Memorandum of Association (MOA), an have not adopted the new Memorandum of Incorporation (MOI) yet.  Companies act requires a compulsory audit to be performed in such instance.
- Memorandum of Incorporation stipulates an audit must be performed (compulsory).
- The entity’s PI Score is above 350
- The Entity’s PI Score is between 100 and 350 and the financial statements are internally compiled.

If you submit the Annual Financial Statements, it must be in a format called IXBRL format.
If the month of incorporation (annual submission month) is prior to the company’s yearend, use the previous year signed Annual Financial Statements and Turnover for submission of Annual Returns.


When to submit a FAS:

- The entity has a Memorandum of Incorporation and the criteria set out below are all met.
- Memorandum of Incorporation requires no audit to be performed (Voluntary).
- The entity’s PI Score is below 350
- The entity’s PI Score is between 100 and 350 and the financial statements are independently compiled.
- If the entity is Dormant

In our next newsletter we will have more information about the “10% penalty on revenue if you fail to file Annual Financial statements with CIPC within 6 months”


Should you need any information, please do not hesitate to email Natasha Bruwer (Natasha.b@sdkca.co.za) from our secretarial department.


 
     
 














August 2018 NEWSLETTER
The New Travel Allowances: How Do They Affect You and Are They Working?
The 2018/2019 tax year sees important changes to how, as an employee, you can be reimbursed for your business travel expenses. Both employers and employees should know how they will affect you in practice.

We discuss the three types of travel allowance, the new changes, the reasons why SARS has made them, and the administrative burden and other considerations for employers.

That’s all important of course, but your bottom line question is always going to be “What’s best for me?” Two practical examples should help you decide.
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Good Staff Relationships Are Just As Important As Pay
ArticleImage A happy, productive and stable workforce is the first prize for all businesses, and recent workplace research has revealed some of the more important issues in play.

For example as an employer wanting to boost your staff retention levels, the best place for you to start is to understand the reasons employees give for quitting their jobs. How important are pay levels? Hours worked? Relationships with management and colleagues? And what do workers want to see in their employer/employee relationships?

Read on for the insights we’ve gleaned for you from the survey results…
   
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Box Clever With Cash When You Retire
ArticleImage Heavyweight Boxing Champions might not always spring to mind as a prime source of financial insight, but George Foreman certainly put his finger on it when he told the world “The question isn’t at what age I want to retire, it’s at what income.”

Whatever retirement income you ultimately decide will be enough for you, one of the many things you need to consider is just how much money you should cash in from your retirement savings. 

We take a look at what you should take into account when making that vital decision, at the tax implications and at what you should do with whatever cash you take out.
   
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SARS’ New Service Charter - A Positive Step
ArticleImage In rebuilding SARS as a world class institution and in positively re-engaging with taxpayers, management has just released a new Service Charter to replace the old Client Charter.

We discuss the highlights of the new Charter, the undertakings now given to taxpayers, and what is expected of taxpayers in return.

Of particular interest perhaps are the various time limits that SARS will now “endeavour” to comply with for services such as new registrations, assessments, payment of refunds, providing reasons for queried assessments and considering objections. 
   
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Your Tax Deadlines for August and SARS’ World Map of International Tax Agreements
ArticleImage If you are an individual provisional taxpayer your first 2019 provisional payment is due on 31 August. 

P.S. If South Africa’s various double taxation agreements, information exchange agreements and other international tax treaties are of interest to you, have a look at SARS’ inter-active world map of them on its “International Treaties & Agreements – Map” page here.
   







Disclaimer

The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.


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