Tax filing: No financial records yet, what now?

Cape Town - Tax filing season for the period March 1 2014 to February 2015 has just kicked off and filing returns can sometimes be a daunting task.

Fin24, in collaboration with the SA Institute of Tax Professionals (SAIT), will as far as possible answer users' tax questions to help make this process as seamless as possible.

"Although taxpayers are keen to file early to get a refund from SARS, they need to ensure that they have all the required supporting documentation before filing, and confirm whether they are legally required to file," said Stiaan Klue, chief executive of the SA Institute of Tax Professionals.

Subject to some exceptions, this year certain taxpayers are not required to file a tax return if their total salary for the year before tax is not more than R350 000.

Klue pointed out that the "R350 000 exemption" is not applicable to taxpayers earning income from more than one employer.

"Also, taxpayers with more than one employer must file even if the salary is minimal. Taxpayers claiming tax-related deductions, such as car allowance or medical expenses, are not exempted from filing either," said Klue.

Sars, who received 17 000 tax returns via branches and mobile units across the country and almost 30 000 returns through eFiling in the first hour after the launch of tax filing season on Wednesday, said it aims achieve the tax collection target of R1.1 trillion set by National Treasury for the 2015-16 fiscal year.

User question: What is a company supposed to do when it has not started trading and has no financial records yet, with regards to filing tax returns?

Piet Nel of the SA Institute of Tax Professionals responds:

The company is obliged to submit a return of income irrespective of whether it has traded or not. Its first return is to be submitted in respect of the period from the date of registration as a company to the last day of the financial year.  

We assume that the fact that it doesn’t have “financial records” means that it has no transactions to record. The company has an obligation to prepare financial statements. From a tax point of view a smaller version of the return is required if the company is dormant. This is managed by marking the correct question when the return is opened. 

* Have a question? Send it to us and we will find an expert to answer.

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