Monthly Archives: July 2013

Congratulations to Antoinette, Maria and Vivian

Congratulations to Antoinette, Maria and Vivian as you celebrate a significant
anniversary of your employment at Newtons. Clearly, reaching this milestone
is a very special occasion for you. It is also a very special occasion for
Newtons since it is a testimony of your loyalty to us over the years. All three
of you are a valued member of our team and your continued contributions
are vital for Newtons success!

Congratulations
Vivian Ntlati (33 years), Maria Kganare (35 years), Antoinette Coetzee (37 years)

Provisional tax

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Provisional tax is exactly what the word says.  A taxpayer provides for his final tax liability in advance by making at least two payments in the course of the year of assessment.  These payments are based on the taxpayer’s estimated taxable income.  When the final tax liability is determined upon assessment the payments already made are subtracted from the liability and the taxpayer only pays in the outstanding amount or receives a refund, if payments made during the year exceeds the final liability on assessment.

It is not a separate tax but merely a mechanism to pay the income tax during the tax year in which the income is earned.

The aim is to help taxpayers meet their liabilities in the form of two payments, instead of in the form of a single, large sum on assessment. A third payment after the end of the tax year, but prior to the issuing of the assessment, is optional.

Who should pay provisional tax?

  • Any person who receives income (or to whom income accrues) other than remuneration is a provisional taxpayer. Examples include rental income, interest income above the annual exemption or other income from the carrying on of any trade.
  • Companies (excluding public benefit organisations and recreational clubs).
  • Trusts and all beneficiaries of trusts
  •  Anyone that the Commissioner notifies that he/she is a provisional taxpayer.
  • In terms of the definitions of “employee” and “provisional taxpayer” in paragraph 1, as well as the provisions of paragraph 11C, directors of private companies and members of close corporations are regarded as employees. They are not considered to be provisional taxpayers unless they have income that falls within the scope of provisional tax income.

How are the provisional payments determined and when should it be paid?

The amount of tax payable and the date of payment are determined as follows:

First Period Second Period Third Period (voluntary)
Half of total estimated tax for the full year; The total estimated tax for the full year; The total tax estimate payable for the full year;
Less the employees tax deducted for this period (6 months); Less the employees tax paid for the full year; Less the employees tax paid for the full year;
Less any allowable foreign tax credits for this period (6 months). Less any allowable foreign tax credits for the full year; Less any allowable foreign tax credits for the full year;
Less the amount paid for the first period. Less the amount paid for the 1st and 2nd provisional tax periods.
First payment must be made within six months of the beginning of the year of assessment. Second payment must be made no later than the last working day of the year of assessment. (voluntary) Within seven months of the year of assessment, where the year of assessment ends in February, and within six months of the year of assessment, in any other case.

 Interest and Penalties

Section 89bis interest:

  • Interest at the prescribed rate (currently 8,5% per annum subject to changes as published in Government Gazette) is payable on late payments in respect of first, second and third periods.

Section 89quat interest:

  • Interest in terms of Section 89quat is either levied on an underpayment of tax or paid on an overpayment of tax from the ‘effective date’.

Paragraph 20 penalty:

Provisional taxpayers with a taxable income of up to R1 million

  • An estimated taxable income for the second period must be equal to the lesser of the basic amount or 90% of the actual taxable income for the year.
  • Where the estimate is less than 90% of the actual taxable income and also less than the basic amount, a penalty is levied (deemed to be a percentage based penalty under Chapter 15 of the Tax Administration Act) equal to 20% of the difference between the amount of normal tax calculated in respect of such taxable estimate, and the lesser of:

o The amount of normal tax calculated in respect of a taxable income equal to 90% of such actual taxable income; and

o The amount of normal tax calculated in respect of a taxable income equal to such basic amount, at the applicable rate.

Provisional taxpayers with a taxable income above R1 million

  • An estimated taxable income for the second period must be equal to 80% of the actual taxable income for the year.
  • A penalty, which is deemed to be a percentage based penalty imposed under Chapter 15 of the Tax Administration Act; will be equal to 20% of the difference between the amount of normal tax as determined in respect of such estimate, and the amount of normal tax calculated, at the rates applicable in respect of such year of assessment, in respect of a taxable income equal to 80% of such actual taxable income.

Some final notes on provisional tax:

    • SARS will no longer be issuing IRP6 returns to provisional taxpayers. If a taxpayer qualifies as a provisional taxpayer, he/she must request an IRP6
    • A taxpayer can request an IRP6 return via the following channels:
  1. eFiling
  2. The SARS Contact Centre
  3. The SARS branch office / Taxpayer Service Centre
  • If a taxpayer is not liable for provisional tax, he/she is not required to submit IRP6 returns.
  • If a taxpayer is liable for provisional tax and the amount payable for the period is nil, he/she must still submit the return.
  • Where the estimate must be made more than 18 months from the latest preceding year and in respect of a period that ends more than one year after the latest preceding year of assessment, the basic amount shall will be increased by an amount equal to eight per cent (8%) per annum of that amount, from the end of such year to the end of the year of assessment in respect of which the estimate is made.
  • For further detail, visit the official SARS website (www.sars.gov.za) where you will find a comprehensive guide on provisional tax or you can contact your friendly Newtons Tax Advisor.

Source:  www.sars.gov.za

Article written by Elizna Prinsloo

Vacation workers

Every June and July Holiday we give students from the Free State University an opportunity to experience what the real working environment is like.

June and July University Workers

Leasego Moreetsi, Anchen Niemand and Masego Fout.

Vacation workers

Sanet van Niekerk, Nthabiseng Mtaung, Daisy Nengovhela and Tanya Spangenberg.

July Holiday workers

Cee Gugwini, Hope Ramaseli and Lizette Coetzee.

 

Newtons, Tjhabelang and Spur for 67 minutes

Newtons had the pleasure of supporting Tjhabelang at the Falcon Spur as part of their 67 Minutes for Mandela day. From 5pm to 9pm we enjoyed good food, great friends an opportunity to give something to Tjhabelang! The Spur agreed to donate 10% of their profit for the whole evening to Tjhabelang! The amount donated to Tjhabelang was R2355.00.
Newtons and Tjhabelang
Tjabelang

Newtons and 67 minutes for Madiba!

On the 18th of July 2013, Newtons handed over 20 bags full of toiletries for the children of Kidz Care Trust. Karen Maclachlan from Kidz Care Trust, collected the bags and was very excited to hand it over to the children. Kidz Care Trust is a non-governmental organization which serves the community of Bloemfontein. Their aim and responsibility is to decrease the number of children living on the streets. There are currently 16 Boys residing at the shelter. Kidz Care Trust also runs a Drop-in Centre in partnership with Park Road Police Station for the boys residing on the street.

 

Why and how to pay CIPC annual fees

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1. Why do we have to lodge and pay annual returns?

The new Companies Act, no 71 of 2008, requires all companies (and close corporations) to submit an annual return to enable the CIPC to have on record the most relevant and recent information pertaining to that company. This annual return consists of a prescribed form that summarises the required information, together with the payment of the applicable annual fee.

The annual return must be lodged within 30 business days which follows the anniversary date of the incorporation date of the company.

2. The prescribed forms

The prescribed form CoR30.1 must be completed and can only be submitted online on the CIPC website.

The following compulsory information must be submitted together with the annual return or within 20 business days afterwards:

  • Certified copies of all the directors’ identity documents, AND
  • A copy of the latest audited financial statements, or properly completed form CoR30.2 in the case of a company (or close corporation) that is not required to file audited or independently reviewed annual financial statements.

3. The prescribed fees

The prescribed fees that are payable with the annual returns are:

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All persons lodging an annual return must first register as a customer on the CIPC website because a reference is required, irrespective of what payment method is used. The payment of the annual return amount may only be made via an electronic payment, preferably by credit card or alternatively, the amount can be deposited in the CIPC bank account. The reference number of the customer is required on any of these forms of payments to enable the CIPC to identify the company who is paying the annual return fee.

4. The consequences of non-lodging and payment of annual fees

If a company fails to submit the annual return by the due date, the following penalties will be levied by the CIPC:

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The CIPC will send a limited number of reminders to the company that fails to lodge and / or pay the applicable annual return. If the company still fails to submit the annual return, the CIPC will proceed to deregister the company. Even though it is possible, following new rules and practices by the CIPC, it is a lengthy and cumbersome process to restore a company that is classified as deregistered.

Contact carel@newtons-sa.co.za for more information.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

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Requirements to restore a deregistered company

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There are various circumstances in which a company (or close corporation) can become deregistered at the CIPC.

 

  1. The company itself can apply for deregistration at the CIPC, for any number of reasons.
  2. If a company has not submitted and paid its annual returns for more than two successive years, the CIPC will inform such a company of the fact and the intention of the CIPC to deregister said company. If such a company does not take any steps to remedy the situation, the CIPC will proceed to finally deregister it.
  3. If the CIPC believes that the company has been inactive for seven or more years.

However, it is possible to restore such a company or close corporation which has been finally deregistered, but all outstanding information and annual returns (including the fees) will have to be lodged with the CIPC. An additional R200 prescribed re-instatement fee must also be paid.

Recently, the CIPC has set additional requirements to do this, which also impacts on the time, administration and cost to restore such a company. These requirements took effect from 1 November 2012.

The steps and requirements for the re-instatement process are:

  1. The proper application CoR40.5 form Application for Re-instatement of Deregistered Company must be completed and submitted, originally signed by the duly authorised person.
  2. A certified copy of the identity document of the applicant (director / member) must be submitted.
  3. A certified copy of the identity document of the person filing the application must be submitted.
  4. A Deed Search, reflecting the ownership of any immovable property (or not) by the company, must be obtained and submitted together with the application.
  5. If the company does in fact own any immovable property, a letter from National Treasury must be submitted, indicating that the department has no objection to the re-instatement of the company.
  6. Also, if the company does in fact own any immovable property, a letter from the Department of Public Works must be submitted, indicating that the department has no objection to the re-instatement of the company.
  7. An advertisement must be placed in a local newspaper where the business of the company is conducted, giving 21 days’ notice of the proposed application for re-instatement.
  8. If the deregistration was due to non-compliance with regards to annual returns, an affidavit indicating the reasons for the non-filing of annual returns must be submitted.
  9. If the company itself applied for deregistration, an affidavit indicating the reasons for the original request for deregistration must be submitted.
  10. Sufficient documentary proof indicating that the company was in business or that it had any assets or liabilities at the time of deregistration must be submitted.
  11. All outstanding annual returns must be submitted and paid, along with any penalties.

Upon compliance of all of the above requirements, the CIPC will issue a notice to the company that it is restored.

Contact carel@newtons-sa.co.za for more information.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

Click here to view full disclaimer