Business Income Tax Return Definition

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Corporate Income Tax

What's New?

• 10 September 2021 – Company Income Tax System and Form changes

  SARS introduced form and system changes to the Income Tax Return for Companies (ITR14) and the Notice of Assessment for Companies (ITA34C). A limited number of source code descriptions were also updated.  For more information click here.

• 16 July 2021 – Companies can file their ITR14 tax returns

  The eFiling pop up message for the filing of the Income Tax Return for companies (ITR14) for the 2021 year of assessment that intend to deregister with CIPC ONLY has been removed. SARS apologises for any inconvenience caused. A company must submit its ITR14 tax return within 12 months of its financial year-end. For more information, see the Guide on How to complete the Income Tax Return ITR14 for Companies.

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.

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 2021 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, taxable turnover, 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 (excluding Body Corporates, Share Block Companies and Public Benefit Companies) is required to submit provisional tax returns (IRP6). 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?

Provisional Tax

• 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.

Tax on Assessment

Payment of tax upon an assessment notice issued by SARS must be done within the period specified in such notice.

Corporate Income Tax is payable at a rate of 28%.

How should CIT be paid?

Payments can be made using the following options:

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

Note: Please refer to the guide on SARS Payment Rules for more information on the above methods of payment.

To access this page in different languages click on the links below:

• Afrikaans
• IsiZulu
• Sepedi
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Table of Contents

• 12/11/2021
• 12:24

Business Income Tax Return Definition

Source: https://www.sars.gov.za/types-of-tax/corporate-income-tax/

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