Enhancements to the ITR14 Company Income Tax Return

Enhancements to the ITR14 Company Income Tax Return

• 21 February 2020
• Corporate Tax
• SARS

On 21 February 2020, SARS implemented enhancements to the ITR14 Company Income Tax Return.

Corporate Income Tax (CIT), also known as business tax, is a tax imposed on businesses incorporated under the laws of the Republic of South Africa. The income received from these business, must be derived from within the Republic or through a branch or permanent establishment within the Republic.

As part of the modernisation of Corporate Income Tax (CIT) which is aimed at improving efficiency and compliance, SARS has amended the dynamic ITR14 return. These enhancements include minimal legal changes and alignment of the definition of a foreign controlled company with the international OECD standards.

Note the following:

• The old IT14 return is no longer accepted. Where you have previously requested and saved an old IT14, the old IT14 will be available for viewing; however, the new ITR14 will be presented for completion.
• If the Representative Taxpayer/Public Officer does not submit the ITR14 by the relevant deadline, the company will face an administrative penalty for noncompliance.

SARS has redesigned eFiling in an effort to embrace the benefits of emerging technologies and provide an optimized and secure digital environment. The new look is also intended to help promote voluntary compliance, reduce the administrative burden and provide you, our valued client, with a more intuitive and user-friendly experience. The redesigned functionality on eFiling will be implemented using a phased approach.

The following legislative amendments were introduced in the new ITR14 return for companies:

• Section 6quat(1C) – Foreign tax credits
• Sections 7E and 7F – SARS interest
• Sections 11(jA), 11(j)(i) and 11(j)(ii) – Doubtful debts
• Sections 23(o)(iii) and 10(1)(zL) – Fruitless and wasteful expenditure
• Section 24C – Allowance for future expenditure on contracts

The following new and amended fields and containers were introduced onto the ITR14:

HTML: As the return has been built on HTML5 to enhance the user experience, it allows the return to be used on desktop, tablet and mobile devices.

Return type: The type of company (dormant, micro, share block, body corporate, small business and medium to large business) will be pre-populated on the return based on the answers provided.

New line Items added onto the return:

• SARS interest s7E
• Expenditure incurred in exchange for the issue of venture capital company shares (s12J)
• Levy income, included in the income statement for small businesses only
• Fruitless and wasteful expenditure
• Income exempt in respect of mining rehabilitation company (s10(1)(cP)
• Doubtful debt allowance
• Cryptocurrency
• Period of financial statement line items added into additional assessment information
• Reporting entity information added in the multinational entity (MNE) details

New containers added onto the return: 

• Deduction (s7F) in respect of SARS interest repaid
• Taxable distribution(s) from all trust(s)
• Cryptocurrency transactions (local / foreign) (excluding CGT)
• Doubtful debt allowance
• Deduction i.r.o. s6quat(1C) for foreign taxes paid or proved to be payable to a foreign government of any country on any SA sourced trade income

This article first appeared on sars.gov.za.

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