How do you record for interest income for the individual from the Close Corporation on a credit balance on the member's loan? Can I create a certificate on Easyfile but not file it, like you do with member's salary declared after year-end?
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
The matter is dealt with in the 6 January 2016 notice, GG 39575, Notice 1, ​issued under the Tax Administration Act, 2011. It deals with the “Returns of information to be submitted by third parties in terms of section 26 of the Tax Administration Act, 2011”.
The notice, in paragraph 2, lists the persons required to submit a return as specified in paragraph 3 of the notice. A company, as in your example, is not included as a person required to do so, unless one of the following applies:
2.10 Any person, who for their own account carries on the business as an estate agent as defined in the Estate Agency Affairs Act, 1976, and who pays to, or receives on behalf of, a third party, any amount in respect of an investment, interest or the rental of property;
2.11 Any person, who for their own account practices as an attorney as defined in section 1 of the Attorneys Act, 1979, and who pays to or receives on behalf of a third party any amount in respect of an investment, interest or the rental of property;
2.12 A person liable to pay withholding tax on interest in terms of section 50F(2) of the Income Tax Act.