SARS is expected to make a number of new provisions in this year's income Tax Amendment Act or TAA. The reason? Strengthening the act will ensure SARS recovers as much as it can from companies that've registered with it. But don't see this as all bad news - you still have the right to make input tax deductions from SARS if you're a registered Vat vendor! Here's how...
SARS says while there are just more than two million companies on the South African tax register, only 791,000 of these are liable to submit tax returns and 395,000 of them have no taxable income at all.
That's why company tax collections for the 2013-14 tax year are budgeted at R170 billion.
And companies with taxable income over R1 million – there are believed to be just 23,000 of these on the register – will pay about 30% of the total company tax, says The Business Day's BDLive
But don't despair – it's not just a one-way cashflow out of your business and into SARS' coffers.
You can still get money BACK from SARS – if you know how.
Here's how to ensure SARS refunds your business input tax claims…
See, input tax is the Vat you pay to your suppliers in the course of carrying on your business or enterprise, says FSPBusiness
But you can't claim back input tax on each and every business expense from SARS.
For example, don't even think of claiming back for staff refreshments that you provide like coffees, teas, soups or even staff canteens – where you don't recover the costs from your staff, explains the Practical Vat Loose Leaf.
These expenses don't relate to the actual making of supplies in your business.
It's easy for an inaccurate input tax claim to trigger a Vat audit…
Not only will SARS disallow your claim, but trying to get an input tax refund for these purchases will raise a red flag for SARS to audit your business and see where else you're trying to get back money you're not due.
SARS is really clamping down in this regard, especially as tax dodgers are becoming a risk to revenues globally, says The Business Day's BDLive
So make sure you're not claiming for expenses that SARS won't refund you for in the first place.
You could just face an audit that'll mean you pay SARS more in the long run!
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