6 ways to reduce your company's chances of a SARS audit
Although no company is immune from a SARS audit, there are number of factors that'll increase your risk. To spot these factors, SARS will look for any discrepancies in the information you company has submitted. But, you can ensure you're not SARS' next target by doing the following six things...
SARS is always on the lookout for non-compliant behavior. For example, it'll identify risks by asking specific questions on tax returns and by sending out payroll and transfer pricing questionnaires.
'It looks out for any large changes in ratios that can be measured in the annual financial statements, such as gross and net profit margins, revenue, financing options and connected parties disclosed from year to year,' says The Practical Tax Loose Leaf Service.
But, you can avoid increasing your company's risk of a SARS audit doing the following things:
How to avoid a tax query from SARS
Keep good financial and credit record for your company. You must keep your day-to-day records for a minimum of five years.
Don't miss any due dates, like submitting your Employer Reconciliation Declaration to beat the deadline of 31 May 2013.
Meet all your obligations in terms of income tax, PAYE and Vat. This includes filling your returns correctly and on time.
Disclose your income correctly on your annual tax return.
Your company must stay up to date with tax legislation, like the Income Tax Act.
Ensure all invoices issued by you are valid Vat invoices.
There you have it! Following these rules will ensure your company isn't on SARS' radar for non-compliance.