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Revealed: Two implications of not meeting tax deadlines

by , 21 January 2014
While you might get away with not meeting a work deadline, this isn't the case with SARS. You'll face the music. In fact, here are the two consequences you'll face if you fail to meet a SARS deadline.

SARS doesn't want non-compliant taxpayers. It has designed penalties to act as a threat against non-compliance.

These are:

  1. Fixed amount administrative/non-compliance penalties; and
  2. Percentage based penalty.

Let's go through each one in more detail.

Two implications of not meeting tax deadlines

#1: Fixed amount administrative/non-compliance penalty

If SARS thinks you didn't comply with the tax Act, it'll impose a penalty.

The penalty will be imposed on a monthly basis for every month that any return required remains outstanding for up to 35 months (if your address is valid) or 47 months (if your address with SARS is invalid).

The penalty will be based on your assessed loss or taxable income for the preceding year.

Caution: The penalty starts at R250 per month and increases by the same amount every month that you fail to comply for 35 months (or 47 months if SARS has an incorrect address for you).

#2: Percentage based penalty

If you pay any of the taxes imposed under any tax Act on time, SARS'll impose a percentage based penalty. This is over and above any other penalty or interest that's already been levied.

The Practical Tax Loose Leaf Service explains that SARS'll issue a penalty assessment and must give you notice of the assessment. This must include the following:

  • The non-compliance for which SARS is penalising you;
  • The amount of the penalty;
  • The date for paying the penalty;
  • The automatic increase of the penalty; and
  • A summary of the procedures for requesting remittance of the penalty.

The penalty is due on assessment and must be paid on or before the date stated in the penalty assessment. If your payment of the penalty is late, you'll be charged interest on the unpaid penalty.

As you can see, missing tax deadlines isn't worth it. Make sure you always comply with SARS. We'll keep you updated on any upcoming tax deadlines. And be sure to always check the SARS website for deadlines.

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