Income tax

Essential information when completing your corporate income tax return

* This content is brought to you by Arro

By Hélène Fourie

Completing the corporate income tax return (ITR14) is becoming increasingly difficult for some taxpayers due to the required information and details that must be disclosed for SARS to issue an accurate assessment.

Helen Fourie

Failure to provide full disclosure and correctly complete prescribed forms can result in far-reaching sanctions and assessments by SARS.

Taxpayers are also reminded to keep all supporting information for a period of five years after the date of submission of the return.

Three-year limitation period

Section 99 (1) of the Tax Administration Act provides for a three-year limitation period, after which SARS cannot reopen an assessment unless a taxpayer has committed fraud, has made a misrepresentation or if there has been no disclosure of material facts.

If any of the above cases apply, section 99 (2) of the Act can be exercised by SARS, which states that the statute of limitations will no longer apply, thus giving SARS the right to reopen a case. assessment beyond the three-year limitation period.

This means that failure to accurately complete IRB14 could result in a subsequent SARS income tax assessment beyond the three-year period.

Calculation of tax

It is important to ensure that the tax calculation section of ITR14 is meticulously completed and that deductions are claimed in the correct category or section. Failure to do so could compromise the accuracy of the disclosure in the income tax return and, therefore, the limitation of the assessment.

Capital gains tax

Full and proper disclosure of capital gains tax transactions is essential, especially when capital losses are incurred. Proper disclosure will ensure that the correct capital loss balance is carried forward to future tax years, to offset against future capital gains. If the capital loss is not disclosed properly, it could result in the loss of the capital loss by the business.

Read also : Tax strategy – why it matters and when it should start

Underestimation penalties

Failure to properly complete ITR14 could result in underestimation penalties imposed by SARS. This could vary from 10% to 150%, or even 200% if the taxpayer’s behavior was considered to be an obstruction or a recurrence. It should be noted that any adjustment to an assessed loss will be subject to an underestimation penalty, at 28% of the calculated shortfall.


It is essential that taxpayers understand the consequences of submitting inaccurate information on the ITR14 filing, even if it is unintentional. Caution and diligence must be exercised to ensure that taxpayers can rely on the three-year limitation rule and prevent SARS from levying penalties for underestimation.

In order to mitigate any potential risk, taxpayers are advised to consider undertaking a review of their corporate tax returns submitted within the past three years. The good news is that if errors are identified, certain procedures can be followed (depending on the type of error) to rectify them.

For many taxpayers, however, a proactive approach like this is beyond their basic capabilities or capabilities. This is where the contribution of specialists becomes crucial. Arro is able to provide our clients with expert advice and assistance, working with them to develop proactive tax solutions. It is important to note that the Arro team is able to recognize potential challenges the taxpayer may face early on, identify and manage risks and determine planning opportunities.

The key message for taxpayers is: don’t wait for tax challenges to emerge; Get expert advice now to make sure you stay compliant and stay in control of your financial future.

(Visited 23 times, 23 visits today)

Leave a Reply

Your email address will not be published.