'Audits are a fact of life and have to be dealt with, but they don't have to be a traumatic and expensive experience,' says The Practical Tax Loose Leaf Service.
In fact, by practicing good compliance strategies and preparing in advance for audits, you can take the sting out of the tail of this necessary evil.
And since a SARS auditor will pinpoint certain aspects of your business to check for any inconsistencies, it's crucial you know what these specific risk areas are.
This'll go a long way in easing the stress factor involved in a SARS audit because 'you can pay particular attention to those facets of your business and make 100% sure no errors have crept in that could incur costly penalties or engage the interest of the audit team,' says the Loose Leaf.
A SARS auditor will take these two steps when reviewing your company's income taxes
1. A SARS auditor will go through your company's computation of taxable income very carefully. He'll do this to check that your company's not trying to avoid taxes, or trying to score with tax deductions and allowances that it's not eligible for.
In doing this he'll make sure that:
2. Then, he'll review your income statement and any notes you've made. He's going to check:
Remember, a SARS auditor will be interested in every aspect of your company's record-keeping and operations that'll indicate the true state of compliance.
So knowing what a SARS auditor will look for when reviewing your company's income taxes will help you ensure all your affairs are in order.