South African Olympian and Paralympian Oscar Pistorius was recently fined 'less than R1 million' for failing to declare all his assets to SARS in his bail hearing over the murder of his girlfriend, Reeva Steenkamp, which led to a tax audit. Your business could face a tax audit for not declaring your assets to SARS, too. Here's how to make sure you've stuck to the rules when it comes to declaring your assets, to prevent a hefty fine from SARS...
Oscar Pistorius is having a rough time at the moment.
Set to appear in court next week, SARS has found that Pistorius wasn't honest about all his assets that he was made to declare during his bail hearing, says TheDailyMaverick.
While Pistorius said in a court affidavit during his R1 million bail application that he owns three houses and a vacant plot with a combined value of nearly $1 million, Pistorius is said to also own another house in Johannesburg.
This led to Pistorius' tax audit by SARS.
As a result of Pistorius' undeclared assets, SARS has fined him for unpaid taxes, adds TheIndependent.
But you don't have to be in the media limelight like Pistorius to attract SARS's attention.
Because chances are your business will face a tax audit at some point, as SARS is doing all it can to increase taxpayers' compliance.
Here's why your business is likely to face a tax audit by SARS…
A tax audit is usually triggered if there's a discrepancy between your asset base and declared income.
That's why SARS' main focus will be a review of the structure of your business' tax returns.
And simply putting a zero in the wrong place on your business tax return is enough to trigger a tax audit by SARS, says FSP Business
If SARS then finds you've been hiding assets, you'll face huge penalties as you won't have been paying your capital gains tax
over to SARS correctly.
So best you make sure everything's in order when it comes to declaring your assets to SARS, says FSPBusiness
The easiest way to ensure your business declares all its assets correctly to SARS…
You can do so by keeping an asset register, which is a record of all the fixed assets like property, equipment, motor vehicles and machinery that your company owns, that goes into detail to describe the assets' cost price and purchase date, says the Practical Accountancy Loose Leaf.
If this seems like a mammoth task and you don't already have an asset register in place, get started today by doing a quick inventory.
Then, all you need to do is remember to update your asset register each time you buy or sell any assets in your business.
That way, you won't get 'confused' about your assets like Pistorius did, when SARS audits your business.