Mazujinn Comprehensive guide to the ITR14 return for companies. Do I need to pay tax? How do I query my debt? At the very least, this needs to be prepared for the year-end audit or review as it is a schedule that is checked as part of our procedures. We therefore recommend these reconciliations be updated monthly with your month end procedures. Should the exercise reveal an error in submissions it is likely to result in penalties as it fodm after the period closed.
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South Africa tax authority employs data analytics Saved As it embarks on becoming a world-leading revenue authority, South Africa is making use of increasingly sophisticated systems-based audits. SARS is embarking on becoming a world-leading revenue authority, making use of increasingly sophisticated systems-based audits and data analytics.
This new approach to data extraction has far-reaching implications for taxpayers in South Africa, who will need to understand not only the new form but also how they can prepare to meet any challenges to their data. As far back as , in line with its modernization initiatives, SARS introduced an additional process to the annual corporate income tax return submission and assessment process VAT declaration.
Form IT14SD process When an annual corporate income tax return is submitted, SARS assesses it and asks the taxpayer to review the return submitted against the assessment issued. In the event that there are any discrepancies, the taxpayer is required to amend its return accordingly. If there are no discrepancies, the taxpayer will then be required to complete and submit an IT14SD return.
All unreconciled differences must be explained. All taxpayers will be given 21 calendar days to complete and submit the return. If SARS does not agree with the explanations provided, it may allocate the return for an audit. Should there be any unexplained or insufficiently explained unreconciled differences, the initial corporate income tax return submitted will likely be audited. Potential taxpayer exposure Taxpayers who submit IT14SD returns with unexplained or insufficiently explained unreconciled differences may be exposed to an audit by SARS.
Furthermore, should SARS deem any explanation of any unreconciled difference to be insufficient, a revised assessment to the Corporate Income Tax return IT14 may be issued for that year.
This could then provide SARS with sufficient grounds to reopen prior-year assessments, going back for a period of five years and assess the taxpayer accordingly. Furthermore, interest on the outstanding tax liability and the penalty imposed will accrue until the total debt is settled. However, this will not waive the obligation imposed by SARS to pay the debt prior to the resolution of any appeal.
It should be noted that a favorable result from any appeal is not guaranteed for the following reasons: The taxpayer would have signed a declaration that the information and disclosures on the IT14 return are true and correct. By not making any amendments, this is likely to be seen as a second declaration made by the taxpayer that the information disclosed on the IT14 return is true and correct.
Next steps It is of utmost importance that taxpayers align their internal processes and systems to ensure that accurate information can be extracted in order to facilitate this added process initiated by SARS. This will become an annual submission requirement going forward.
We recommend that taxpayers review or update their systems to ensure that they are able to extract the information required by the IT14SD in the shortest amount of time. Further, taxpayers should ensure that there are no unreconciled differences. If there are, these need to be explained in detail to avoid an audit by SARS. In addition, we would recommend that as soon as the taxpayer receives a request for the submission of the IT14SD, the taxpayer should immediately apply for a submission extension to increase the time it has to extract and reconcile the information and to explain any differences found.
South Africa tax authority employs data analytics
HELP: SARS has requested me to submit an IT14SD
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