In a move that will significantly impact the financial services sector, the South African Revenue Service (SARS) has announced a series of form and system changes to the Income Tax Return for Companies (ITR14) and Notice of Assessment for Companies (ITA34C). The changes, set to be introduced from 23 June 2023, will also include updates to a limited number of source code descriptions.
The changes are part of SARS’s ongoing efforts to streamline tax processes and ensure compliance with evolving legislation and regulations. The updates are expected to have a significant impact on companies, tax practitioners, and individuals involved in personal finance, credit, lending, and banking sectors.
One of the key changes includes an update to the core systems to accommodate assessed loss calculations as per section 20. This change is expected to enhance the accuracy of tax calculations and ensure that companies can better manage their tax obligations.
In addition, the ITR14 will be updated to identify paragraph 13(1)(a) and 13(1)(b) deductions, extending the prescription period on disputes. This move is expected to provide companies with more time to resolve any tax-related disputes.
In line with the new Section 18A requirements, the Solidarity Fund Donations container will be removed from the ITR14. This change aligns with the broader shift towards more stringent regulation of charitable donations in the financial sector.
The Public Benefit Organisations (PBO) number(s) declared on the return when claiming donations will now be validated against the SARS’s PBO register for validity. This is a significant step towards ensuring transparency and accountability in the sector.
In a move that will be of particular interest to those in the motor vehicles and insurances sectors, a Share Register will be added to the ITR14 return. This will enable the capturing of the classes of shares, and the details of the holders of shares per class of share.
The “Taxable Distribution(s) from all Trusts(s)” container will be enhanced to enable the taxpayer to declare the details of each distribution received from a Trust. This is expected to provide more clarity and transparency in the reporting of trust distributions.
SARS has expressed gratitude towards compliant taxpayers for filing their tax returns and paying their taxes on time. The support from tax practitioners is also appreciated, and SARS has emphasized the critical role that practitioners play in bridging the gap between taxpayers and the revenue service.
As legislation, regulations, and tax law are continuously changing and evolving, it is of utmost importance for companies and tax practitioners to keep abreast of such changes. This will ensure that companies continue to meet their tax obligations and that the financial services sector remains robust and compliant.
Stay tuned to Rateweb for more updates on these changes and how they will impact the financial services sector.