08 April 2005 – Outstanding Income Tax Returns for 2003 & 2004

Do you have an outstanding tax return for either 2003 or 2004 or both tax years? YOU ARE KNOWINGLY IN TROUBLE WITH SARS, WITHOUT KNOWING IT. “IGNORANCE OF THE LAW IS NOT AN EXCUSE”

On the one side of the coin: YES you are in trouble with SARS but also on the other side of the coin: NO you are not, IF you know the correct procedures or know somebody who knows the correct procedures.

Firstly, why do I say YES? If a tax return for a previous year is outstanding when your tax returns for 2005 is issued by SARS, you do not qualify for an extension to submit your 2005 return until the outstanding returns has been submitted. If the right procedures are not followed, you will also be liable for penalties on the late submission of an income tax return, which can be as much as 200% of your income tax, as well as interest.

Secondly, why do I also say NO? By following the correct procedures, I legally exploit a loophole in the latest changes to the Office Procedures of SARS. By legally exploiting the loophole, you get two months extension to submit the outstanding returns for 2003 and 2004 and also avoid the penalty on late submission of an income tax return, but you might still be liable for interest.

Two weeks ago, I followed the procedure for a new client’s outstanding 2003 and 2004 tax returns, and a SARS official asked me how did I came across the loophole, to which my reply was that I worked as a Tax Auditor for 2 years at SARS, and that one has be awake when dealing with SARS and their Office Procedures.

Your are invited to send an email to herman@e-taxcalc.co.za with suggestions about newsletter topics. The topic on which we receive the most suggestions will be considered as the topic for the newsletter after the secrets of the company car.