My client's business was registered in October 2017, so the first year of operation can end February 2019 (17 months). I need to get SARS to make the 2018 income tax return as not required as the client needs a tax clearance urgently. What is the best way
Important:
This answer is based on tax law for the year ending 28 February 2019.
Answer:
We don’t think that it would be correct to submit a nil return for the 2018 year of assessment.
A company’s year of assessment is its financial year (refer to the relevant definitions in section 1(1) of the Income Tax Act). The first year of assessment can be for a period that is more or less than 12 months. In terms of the Companies Act (in section 27) the first financial year of a company begins on the date that the incorporation of the company is registered, as stated in its registration certificate and ends on the date set out in the Notice of Incorporation, which may not be more than 15 months after the date as stated in its registration certificate.
We don’t know what date was set out in the Notice of Incorporation. Our view is that the first year of assessment can’t be for a period of 17 months. Because the company’ financial year ends on the last day of February, we don’t believe that SARS would grant approval to the company to submit a nil return either, but one could request them to do so. Your problem is that that will take time.
We suggest that a return be submitted for February 2018.