As an employer, how many years can one go back to make amendments to an EMP501; i.e. certificate cancellations or additional tax certificates? If relevant, please state the specific section in the Income Tax Act.
Author: The Payroll Authors Group of South Africa
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
There is no limitation on the number of year which an employer are allowed to correct any EMP501 declaration made by him. The provisions of paragraph 13 of the Fourth Schedule is clear that the tax certificate must contain the true amounts of remuneration and deductions for that specific period. This means that if any of the amounts declared on a previous tax certificate is not correct, the declaration made by the employer is not true. SARS deem revised declarations as voluntary disclosures and welcome them in order to ensure that the tax situation of each employee is correct. However, should an employer not correct the relevant information and SARS exercise an audit, the provisions of paragraph 5(5) may be applicable where the amount under-deducted, etc. will be deemed a penalty due and payable by the employer. It is recommended that the corrections be made in order to avoid a SARS audit identifying the errors and raise a possible penalty up to 200%.