Corporate Income Tax

What’s New?

• 7 December 2020 – CIT changes implemented
  
  The Guide was updated with the legislative changes i.e. How to complete the Income Tax Return (ITR14) for Companies.
  
  
• 30 November 2020 – Corporate Income Tax (CIT) Filing season important changes for 2020/21
  
  SARS is in the process of updating the systems, forms and processes pertaining to the filing of Income Tax returns for companies. These changes will be implemented in a phased approach throughout the 2020 /21 period, read more.
  
  
• 27 July 2020 – ITR14 Returns
  
  The eFiling pop up message that restricts the filing of the Income Tax Return for companies (ITR14) for the 2020 year of assessment to companies that intend to deregister with CIPC ONLY has been removed. Companies intending to file for the current year, will be able to file using the existing Income Tax Return for companies (ITR14), provided they are not impacted by legal changes that were promulgated in January 2020. Companies impacted by the legal changes promulgated in January 2020 are encouraged to file their returns when the legal changes are implemented with the new version of the Income Tax Return for companies (ITR14).
  
  See the legal changes that were promulgated in January 2020.
  
  
• 6 July 2020 – Companies
  
  The Income Tax return (ITR14) must be completed and submitted within 12 months after the financial year end of a company. The dates for Filing Season, including CIT, were documented in the Legal Notice to submit returns as published on 3 July 2020.
  

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.

Note:

For CIPC registered companies you are not required to perform a separate SARS tax registration for Income Tax, as your company will automatically be registered via a direct interface with CIPC.

Top Tip: You must make sure your business details are up to date before you submit your ITR14. So visit our keeping my business details up to date webpage to find out how to do this.

• Submit annual tax return
  
  For the 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,

Returns can be submitted electronically via e-filing.

• 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?

• 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.

How should CIT be paid?

• Online Banking
• Electronic funds transfer
• Bank payments
• eFiling
• Swift payment method (applicable only to foreign payments).

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