Your Tax Deadlines for May 2024

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  • 07 May – PAYE submissions and payments
  • 24 May– Value-Added Tax (VAT) manual submissions and payments
  • 30 May – Excise duty payments
  • 31 May – VAT electronic submissions and payments, & Corporate Income Tax (CIT) Provisional Tax payments where applicable

Beneficial Ownership Registers – Now Mandatory with CIPC Annual Returns

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“It is imperative that ALL companies and close corporations ensure compliance with the beneficial ownership filing requirements, to ensure good corporate governance and business continuity.” (CIPC)

Following changes to the Companies Act on 24 May 2023, company directors and members of close corporations are obliged to lodge and maintain a detailed Beneficial Ownership (BO) Register, along with a list of supporting documents with the CIPC (Companies and Intellectual Property Commission). This register and documents must also be kept up to date within tight timelines and verified annually.

Pre-existing companies with their anniversary date after the promulgation of the amended Companies Regulations were required to file their beneficial ownership information with their annual returns. Registers for new companies and amendments must be lodged within 10 days. This means that all entities in CIPC’s register must have filed their beneficial ownership information by 24 May 2024 – one year since it became mandatory.

The Commission, citing a huge number of non-compliant entities that are yet to file their beneficial ownership and/or securities register information, is enforcing compliance by implementing more serious consequences.


Consequences of non-compliance

  • A new “hard-stop functionality” has been implemented by the Commission. That will prevent any non-compliant entities from filing their annual returns, which brings its own consequences.
  • The late filing of annual returns will incur penalties.
  • Banks, service providers or customers often require businesses to have up-to-date annual returns before engaging in business.
  • The Commission will take further and necessary enforcement actions with regards to entities which continue to be non-compliant, such as:
  • investigation into the administration and governance processes of non-compliant business,
  • issuing of compliance notices; and/or
  • referral for deregistration and even final deregistration due to non-compliance.
  • It is also a criminal offence to submit false or incorrect information to the CIPC.


What is required for compliance?

  • Identify the beneficial owners of a company – these are individuals/natural persons who, directly or indirectly, ultimately own 5% or more of the company, or exercise effective control of that particular company.
  • For each beneficial owner identified, collect the following:
  • full names, date of birth, correctly certified copy of ID or passport;
  • business or residential and postal address;
  • email address;
  • confirmation as to the participation and extent of the beneficial interest;
  • supporting documents.
  • Collate the information in a register, which must be filed with CIPC, and upload the supporting documents to CIPC’s website.
  • Keep the register up to date, with changes filed with CIPC as soon as practically possible, but no later than 10 business days after notification.
  • An updated register must also be submitted with the annual returns each year.
  • The information must be treated as confidential and adequate precautions must be taken to prevent theft, loss, damage, destruction and falsification.


Top tip for hassle-free compliance      

Our assistance will prove invaluable in ensuring your business remains compliant with both CIPC’s beneficial ownership requirements and annual return requirements, particularly following the hacking of the CIPC website and the problems and delays that followed.

We can also guide you through the complexities of CIPC compliance, manage the tedious processes and take care of the ongoing maintenance requirements, thereby eliminating your risk of non-compliance, which constitutes an offence and can incur administrative penalties.

Your Employer Annual Declaration is Due by 31 May

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Employers must submit their annual reconciliation declarations (EMP501) with accurate and up-to-date payroll information about their employees by 31 May this year.

This is among the requirements imposed on employers by the Fourth Schedule to the Income Tax Act:

  • deducting or withholding employees’ tax from remuneration,
  • paying the above to SARS monthly before the 7th of the following month,
  • reconciling employees’ tax during the annual and the interim reconciliation, and
  • issuing tax certificates (IRP5s/IT3(a)s) to employees timeously.

A SARS focus area 

The employer-reconciliation process is a focus area for SARS, not only to ensure compliance among employers, but also because it enables SARS to issue individuals with income tax auto-assessments.

SARS uses the IRP5/IT3(a) certificate information submitted by employers through the annual reconciliation process to prepopulate the employees’ annual income tax returns (ITR12), and employees cannot change this information.

This means the employer-reconciliation process is also a key phase in the Income Tax Filing Season, because incomplete or incorrect information will make it difficult for employees to fulfil their tax obligations and because employees require IRP5 and IT3 certificates to file their income tax returns in time during tax season.

As such, SARS says it vigorously pursues employers that fail to comply and, where necessary, aims to make tax non-compliance hard and costly through hard enforcement, for example, court action, asset seizure and criminal prosecution.


What needs to be done?

  • Register employees who are not registered for income tax.
     
  • Review the year’s EMP201 declarations that declare the total tax liability for each tax period for:
    • Employees’ Pay-As-You-Earn (PAYE) tax,
    • Unemployment Insurance Fund contributions (UIF),
    • Skills Development Levy (SDL)
    • Employment Tax Incentive (ETI) amounts (if applicable).
  • Submit any outstanding monthly declarations (EMP201) and settle all payments due to avoid administrative penalties for non-compliance or late submission, and to reduce interest charges on delayed or outstanding amounts.
  • Ensure the values on the EMP201 declarations and on the tax certificates balance to the actual payments made to SARS.
  • If any discrepancies are identified in the EMP201 declarations, these must be corrected when submitting the EMP501.
  • The EMP501 Annual Reconciliation Declarations must include:
    • Monthly employer declarations (EMP201).
    • Information about payments made (excluding penalties and interest paid).
    • Employee tax certificates (IRP5/IT3(a) generated) covering the tax year from 1 March 2023 to 29 February 2024.
  • Monitor the status of your submission to ensure the EMP501 has been successfully filed with SARS – a submission rejected as incomplete or due to a data error is considered not to have been submitted, and the taxpayer will be liable for non-compliance penalties.
  • Keep accessible employer records with a register that contains each employee’s personal details and financial records as prescribed by the Commissioner for at least five years.
  • Also complete the interim reconciliation process in September/October each year to enable an easier and more accurate annual reconciliation submission and an up-to-date employee database.


Consequences of non-compliance 

  • ETI refunds (unused ETI amounts) can only be claimed by submitting interim and annual reconciliations (EMP501s). Failure to do so will result in ETI refunds being forfeited.
  • Submitting an incomplete EMP501 or submitting an EMP501 after the due date will result in administrative penalties, amounting to 1% of the year’s PAYE liability. This penalty increases by 1% monthly, reaching up to 10% of the year’s PAYE liability. A penalty assessment notice (EMP301) will be issued. It is possible to incur two penalties for the same period i.e. both a PAYE late payment penalty and PAYE administrative penalties.
  • In addition, it is a criminal offence for an employer wilfully or negligently to:
    • Fail to submit full and complete EMP201 or EMP501 returns to SARS by the due date.
    • Fail to issue an IRP5 or IT3(a) certificate to an employee within the specified periods.
    • Fail to deduct or withhold PAYE or UIF, or not to pay any PAYE or UIF deducted or withheld over to SARS as required by law.
    • Use or apply PAYE deducted or withheld for any purpose other than to pay that amount to SARS.

Any person found guilty of one of these offences is liable, on conviction, to a fine or imprisonment for up to two years.


We can help!

Let us help you review your employees’ tax obligations and prepare for submission of the Annual Reconciliation Declaration. Similarly, if penalties and interest have already been imposed on your business, we can assist in requesting remission from SARS.