OUTSTANDING RETURNS

Penalties for non-compliant taxpayers

Do you have outstanding tax returns due to incorrect filing, delayed payment, malpractice or you were simply unaware of any outstanding returns?

Now is not the time to take risks when it comes to filling your tax returns. SARS has upped its collection power to offset a massive budget deficit with aggressive collection steps. This approach clearly shows you are dealing with a competent revenue authority.

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Administrative non-compliance penalties, which can range from R250 to R16 000 per month, depending on the taxable income of the taxpayer and will be imposed if taxpayers fail to submit their tax returns timeously as required under the Tax Administration Act.

Not only will you be accumulating large amounts of administrative penalties or will you be unable to obtain a refund from SARS due to your non-compliance, but you can possibly even be faced with criminal charges. Continuous non-compliance can lead to criminal prosecution and offenders can be imprisoned for up to a period of up to two years.

ASSESSED LOSS OR TAXABLE INCOME FOR THE PRECEDING YEAR	MONTHLY PENALTY
Assessed loss	R250
R0 – R250 000	R250
R250 001 – R500 000	R500
R500 001 – R1 000 000	R1 000
R1 000 001 – R5 000 000	R2 000
R5 000 001 – R10 000 000	R4 000
R10 000 001 – R50 000 000	R8 000
Above R50 000 000	R16 000

To avoid unnecessary penalties and interest, it is prudent that taxpayers file their tax returns timeously. However, taxpayers should also bear in mind that administrative penalties that have accumulated over a period of time, can always be waived by SARS if the taxpayer submits a carefully drafted request for remission of penalties.

FREQUENTLY ASKED QUESTIONS

WHAT IS AN ADMINISTRATIVE PENALTY?
An Administrative penalty is a penalty imposed by SARS in respect of any incidence of non-compliance as defined in section 210 of the Tax Administration Act.

WHAT MUST I DO WHEN I RECEIVE A PENALTY ASSESSMENT NOTICE FROM SARS?
A non-compliant taxpayer who receives a Penalty Assessment Notice (AP34) must do two things:
1. Remedy the non-compliance, e.g submit the outstanding tax return for which you were penalised;
2. Pay the administrative penalty amount by the due date.

WHAT IS A REQUEST FOR REMISSION (RFR)?
Request for remission of the penalty is a means for the taxpayer to dispute the Administrative Penalty that was levied to his / her account and to request that the penalty be waived.

WHAT CAN I DO IF I DO NOT AGREE WITH THE ADMINISTRATIVE PENALTY THAT HAS BEEN LEVIED AGAINST ME?
A taxpayer, who does not agree with the imposition of the administrative penalty must request a remission of the penalty to SARS using the prescribed RFR1 form. However such an application will only be considered if the non-compliance has been remedied on or before the due date mentioned in the notice of the penalty (i.e. if the outstanding return(s) have been submitted).
Note: The non-compliance does not need to be remedied in the case of not liable, SARS error or Death.
In the RFR you must explain the exceptional circumstances which led to your non-compliance. The RFR will only be allowed where circumstances beyond your control resulted in your non-compliance.

MEET THE TEAM

Jashwin Baijoo

Associate Director
Head of Strategic Engagement & Compliance
Admitted Attorney, LLB, LLM (Tax)
Master Tax Practitioner (SAIT)
Professional Tax Specialist (SA)
SAIPA Tax Committee Member

Our multidisciplinary team of highly qualified tax attorneys and chartered accountants will be able to assist you to submit any outstanding returns and to assist you in successfully remitting administrative penalties that were imposed in previous years due to outstanding returns. Any information shared with our tax attorneys will be protected by legal privilege.

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Many businesses, and especially small and medium sized entities, have jumped at the opportunity to apply for debt deferral or debt compromises. This allows the company some breathing space and even offers the opportunity to wipe their debt slate clean at a “reduced” cost.

Our specialist tax debt relief team is comprised of both tax attorneys and chartered accountants, to ensure the legally correct and most beneficial compliance solution is created for each and every client. We ensure legal professional privilege in all SARS debt relief negotiations, focusing on more complex and high value tax debt engagements with SARS. To ensure the benefit of our services outweigh the professional costs, we do not engage on matters where the tax debt owed to SARS is under R150 000,00.

Kindly note that our offices are closed between 25 December 2024 and 1 January 2025 and as such there will be a delay in our normal expeditious response times. Our teams are taking a short festive season break and will address your query upon their return on Thursday, 2 January 2025.