Government and SARS (South African Revenue Service) have agreed to assist companies in South Africa on certain conditions. These conditions are:
- Be either:
- Individual
- Partnership
- Trust
- Company/ Close Corporation / Share Block / Co-operative
- Have a gross income of R100 Million or less during the year of assessment ending on or after 1 April 2020
- Be fully Tax Compliant
Government has allowed a deferral of payment of 35% of the total PAYE liability per period, without SARS imposing administrative penalties and interest for the late payment thereof. This deferment is only on PAYE and does not include SDL and UIF.
Companies wanting to make use of this relief are still required to submit the EMP201 return with the FULL PAYE that should be paid before any deferral is calculated. SARS has stated that to determine the value of the deferral, Company’s must:
- Request a Statement of Account. This statement should reflect a COVID-19 Tax Relief (the deferred amount) for PAYE and the total payable for the period in question.
Or
- Manually calculate the deferred amount. This value is calculated on only the PAYE value.
COVID-19 tax relief – PAYE
SARS has further stated that it is the company’s responsibility to ensure that the Tax Status is maintained though out this process to ensure that penalties and interest are not imposed. If the Company’s tax status is changed, SARS may insist on all funds being paid.
Note. The PAYE relief will continue even with ETI being Claimed.
Repayment of the PAYE that is deferred must commence on or before the August 2020 EMP201 return due date: 07 September 2020. The repayment is to be completed with the final portion being paid by 5 February 2021
Here is an example of the planning for the PAYE tax relief
To check if you are tax Complainant you will need to contact us. Info@nel-associates.co.za
COVID-19 tax relief – SDL
On the 21st of April 2020 the President announced a Payment Holiday for SDL. This payment holiday is for 4 months and are applicable in the following periods:
- May 2020 -EMP201 due date: 5 June 2020
- June 2020 -EMP201 due date: 7 July 2020
- July 2020 -EMP201 due date: 7 August 2020
- August 2020 -EMP201 due date: 7 September 2020
The payment holiday is only applicable to Company’s who are required by law to contribute towards SDL. This payment holiday is not linked to the company’s tax status and will be applied when completing the EMP201 return automatically.
No repayment of SDL is required
COVID-19 tax relief – VAT
There is no VAT deferral.
SARS has announced measures to assist with Tax Refunds. I recommend contacting us for further detailed information.
To contact us please email Info@nel-associates.co.za
COVID-19 tax relief – Provisional Tax
Government has allowed a deferral of a portion of the first and second provisional tax liability to SARS, without SARS imposing administrative penalties and interest on the deferred amounts.
Companies that wish to make use of this deferment need to be compliant as stated above. Government and SARS have stated the proposed amendments are deemed to have come into operation on 1 April 2020 and apply to the following periods:
- First provisional tax periods ending on or after 1 April 2020 but before 1 October 2020
- Second provisional tax periods ending on or after 1 April 2020 but before 1 April 2021
The calculation will be completed as follows:
- First Provisional Tax Period: 15% of total estimated tax liability
- Second Provisional Tax Period: 65% of total estimated tax liability
- Third Provisional Tax Period: Deferred 35% of tax liability
When completing the returns you will still need to declare the total estimated tax liability as per normal.