South Africa: Proposed penalty regime, individual taxpayers not filing income tax returns

Regarding penalty provisions when individual taxpayers fail to file an income tax return

Regarding penalty provisions when individual taxpayers fail to file an income tax return

The South African Revenue Service (SARS) on 28 July 2021 released a revised draft public notice and an explanatory note regarding the penalty provisions when individual taxpayers fail to file an income tax return.

Currently, a failure by an individual taxpayer to file an income tax return (form ITR12) for years of assessment commencing on or after 1 March 2006 is subject to a fixed-amount penalty when the taxpayer has two or more outstanding income tax returns.

Under the proposal, the fixed-amount penalty would apply if the individual taxpayer has, as of 1 December 2021:

  • Two or more outstanding income tax returns from the 2007 to 2020 tax years of assessment, or
  • One or more outstanding tax returns from (and including) the 2021 tax year of assessment

Then, beginning 1 December 2022, the non-compliance penalties would be levied on any outstanding income tax return, for years of assessment beginning on or after 1 March 2006. Accordingly, assuming the draft notice is finalized, if an individual taxpayer misses the 2021 tax filing deadline, there would be an immediate levy of administrative non-compliance penalties.

Read an August 2021 report [PDF 512 KB] prepared by the KPMG member firm in South Africa

 

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