Application for a TAX DIRECTIVE - directors remuneration. I would like to know if the company can apply for directive for previous years ? 2016,2017,2018 if not are they then compelled to pay 10% penalty for each month and interest?
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
It is not clear why you asked for assistance in this regard. It can't be applied for retrospectively.
The application, by an employer, for a directive is made in terms of paragraph 11 of the Fourth Schedule to the Income Tax Act. Its purpose is to direct the employer “to refrain from deducting or withholding employee’s tax from remuneration due to an employee – a director in this case.
The 10% penalty is imposed where the amount withheld, or where the person was a director of a private company, the amount determined under the formula in paragraph 11B of the Schedule, was not paid by the seventh day of the next month. A directive, if applied for before the payment became due, would not have assisted to get the late payment penalty remitted.