'All of the taxes in the world don't mean a thing if you can't collect on them', says Forbes. And just as the US is increasing its tax collection efforts, so is SARS. That's why tax audits are on the rise, so it's the perfect time to make sure your business is paying over all its taxes correctly - especially capital gains tax. Here's what you'll need to do.
Taxing authorities from Tennessee to New Jersey are reporting shortfalls and lags in collections activities, says Forbes
That's why US tax authorities are becoming more aggressive and seizing assets to make up revenue shortfalls.
And SARS is on a similar tax collection drive at the moment.
Just look at Julius Malema for proof.
The National Prosecuting Authority's Asset Forfeiture Unit has pounced on Julius Malema and attached a R4 million farm, which is now being auctioned off, according to IOL
That's because Malema could owe SARS up to R16 million, says MoneyWeb
But it's businesses that are the hardest hit when SARS does a tax audit.
The problem is, there are lots of grey areas involved in tax, where businesses can be breaking the tax laws without even knowing it.
The most common tax type business owners struggle with?
Capital gains tax!
It's up to you to pay over CGT correctly and keep track of all the assets your business disposes of…
SARS won't remind you about this as it can't keep track of your assets, so there's no set deadline for this that applies to everyone, to remind you when your capital gains tax
And if you're under a tax audit, you'll face huge penalties from SARS if it finds hidden assets that you haven't included as 'assets and liabilities' in your business tax return.
That's why FSP Business
suggests you update your business' asset register.
Make sure that you've listed property as well as any kind to assets that are movable or immovable, tangible or intangible, says SARS
Fill out the 'assets and liabilities' section of your tax return correctly!
Then be sure to mention any assets you've disposed of in the 'assets and liabilities' section of your tax return.
If SARS does audit your business, at least you'll have proof of accounting for all your assets correctly, which means there's less chance you'll face penalties from SARS.