If you're nervous about the state of your business' tax affairs, best you check everything's in order. Because SARS has just acquired new powers to find out whether taxpayers are lying about their finances. This will make it easier for SARS to check your business' tax compliance than before. But it also means your business may have new filings to submit...
New Tax Administration Act
regulations that were gazetted last month mean SARS doesn't have to rely on just your business' financial reports and tax returns to check if you're telling the truth about your finances, says Business Repor
Now, SARS can also extract information from banks and other third parties you do business with.
There's nothing to worry about if everything's in order.
Make sure your business' financial records prove your tax compliance and don't raise any red flags that'll lead to a tax audit…
If you've fudged the truth a little in your business tax returns, SARS will find this out in a flash.
For example, you're more likely to face a tax audit if your business' financial records include uncommon high-risk factors like a travel allowance for your desk-bound secretary, explains former SARS official, Antonie Goosen in The Practical Tax Loose Leaf Service
Added to this, there's a whole new set of filings that certain institutions would have to submit twice a year, adds the Business Report.
These company-types will have new SARS filing obligations as third-party information sources
This will affect JSE-listed companies and those that issue bonds, debentures and similar financial instruments on their behalf, as well as medical schemes, estate agents and attorneys.
That's because the disposal of shares, unit trusts, private investments and even second-hand policies has capital gains tax
(CGT) implications, says FSP Business
And while third-party data verification had been part of the income tax system for at least the past five years, the new legislation makes it easier for SARS to get hold of this information.
While previously this was done by listing specific types of information required from third parties, like interest returns by banks or certain returns required from companies, third parties now have a duty to automatically submit returns of information based on public notice.
So beware of this and get ready for SARS to contact your business for more information!