SARS has warned taxpayers that administrative penalties will be imposed for outstanding corporate income tax (CIT) returns from December this year.

According to PwC’s Elle-Sarah Rossato, Section 210 of the Tax Administration Act provides for the imposition of penalties in the case of non-compliance.

“Previously, penalties for outstanding income tax returns were only applicable in the case of outstanding personal income tax returns,” she said.

“However, as per the notice issued by SARS on 1 October, administrative penalties will now also be imposed on corporate taxpayers that receive final demands to submit returns.”

As per the notice, the penalties range from R250 to R16,000 per month that noncompliance continues.

Rossato added that the exact amount will depend on the quantum of the company’s assessed loss or taxable income.

“To rectify any non-compliance and prevent penalties being imposed, corporate taxpayers, including dormant companies, should ensure that outstanding returns are submitted to SARS before the end of November 2018,” she said.

Personal income tax

In a separate notice sent out on Monday, SARS warned of the penalties for the late submission of personal income tax returns.

“Administrative penalties will be applied to late filing of tax returns and range from R200 to R5,000. In accordance with the Tax Administration Act No. 28 of 2011 (TAA), and specifically Section 234 (d), it is a criminal offence not to submit a tax return for any of the tax types a taxpayer is registered for,” it said.

“SARS has clamped down on outstanding tax returns to improve compliance, with 18 taxpayers prosecuted this year for not filing a return.

“These taxpayers, who were publicly named, had ignored SARS’ reminders that they were due to file a return, and now possess a criminal record. Fines ranging from R2,000 to R20,000, as well as admission of guilt fines were handed down by the courts, while some were imprisoned.”