On 23 April 2020, National Treasury released a media statement with respect to further tax measures introduced to combat the COVID-19 pandemic. On 1 May 2020, National Treasury also released the Draft COVID-19 Tax Bills that have been updated to reflect the relief measures requiring legislative amendments.
One of the measures announced by National Treasury, was to allow larger businesses to apply to SARS on a case-by-case basis to defer tax payments without incurring penalties, where such businesses can show that they are incapable of making tax payments due to the COVID-19 pandemic. Larger businesses are those businesses with a gross income of more than R100 million (previously R50 million).
Following this announcement, SARS has now provided guidance on the process to be followed and the requirements that should be met to apply for the waiving of penalties for tax debt.
APPLYING FOR THE WAIVING OF PENALTIES BY LARGER BUSINESSES
Larger businesses (i.e. businesses with a gross income of more than R100 million) that are able to prove that they are incapable of settling tax debts timeously due to the COVID-19 pandemic, may apply to SARS for the deferment of payment without incurring any penalties.
Applications should be submitted to SARS by sending an email to COVID19IPAaboveR100m@sars.gov.za
ADDITIONAL PAYMENT DEFERRAL RELIEF FOR SMALLER BUSINESSES
SARS has also indicated that smaller businesses (i.e. businesses with a gross income of R100 million or less) can apply for additional deferral of payment of tax liabilities, without incurring penalties.
Applications should be submitted to SARS by sending an email to COVID19IPAbelowR100m@sars.gov.za.
The following should be included in the email submitted to SARS via the respective dedicated mailboxes:
- A letter requesting deferred arrangements, stating the reasons for the request and the specific tax periods;
- Latest Annual Financial statements and latest management accounts;
- A list of debtors and creditors; and
- Cash flow projections for the next three months.
It is also important to note that:
- The respective dedicated mailboxes are only for instalment payment arrangements on COVID-19 relief requests, and requests not pertaining to COVID-19 will be deleted without confirmation of receipt thereof; and
- Requests must be made per entity and not on a group level.