There is a direct interface between the CIPC and SARS. While convenient, this can result in non-compliance from a tax perspective.
Corporate tax compliance obligations
Section 23 of the Tax Administration Act No. 28 (2011) (“the TA Act”) requires a registered taxpayer to communicate to SARS within 21 business days any changes that relate to:
- Postal address;
- Physical address;
- Representative taxpayer;
- Banking particulars;
- Electronic address for communication;
- Such other details as may be required by public notice.
Therefore, it is important to ensure that the taxpayer profile is reviewed as part of every company’s corporate tax compliance process. Most profile details can be amended on SARS eFiling by completing the Registration, Amendments and Verification form (RAV01). The only instances where the public officer would be required to visit a SARS branch to amend the profile details are when the changes relate to the:
- Nature of the entity or taxpayer type;
- Enterprise registration number; and
- Bank details (i.e. when the taxpayer is notified via SARS eFiling that additional validation is required.)
CIPC compliance obligations
The Companies Act No. 71 (2008) also contains a number of compliance obligations, which includes reporting changes to the:
- Number of shares issued;
- Financial year-end; and
- Registered address.
Effective 1 January 2020, companies are also required to complete a Compliance checklist prior to the submission of the annual return.
Discrepancies between SARS eFiling and CIPC profile details
Because of the direct interface between the CIPC and SARS, it is important to ensure that the profile details of the taxpayer reported to the CIPC and SARS are the same. Any discrepancies will be flagged by the SARS eFiling system as an instance of non-compliance, and may also negatively impact on the functionality of the system. For example, if the public officer registered on SARS eFiling is different to the one according to the CIPC’s records, the SARS eFiling system may limit the user rights of the public officer on SARS eFiling, as the system still associates another individual’s CIPC profile details to that of the registered public officer.
Therefore, it is advisable to incorporate a review of registered CIPC and SARS eFiling details as part of the corporate tax compliance process and also prior to issuing shares as part of a corporate tax restructuring.