Please take note!

ADDRESSES ON INCOME TAX RETURNS

In December 2008 the South African Revenue Service (SARS) published a list of compliance offences which make it difficult for them to exercise their duty as administrators of our country’s income tax system. One of these offences is that contact details of taxpayers –  and more specifically addresses – that change, are not consistently passed on to them by the taxpayers. At the same time it was announced that an administrative fine of R500 will be imposed if SARS becomes aware of incorrect address details. As from the 2012 tax year SARS also makes it very clear that a taxpayer’s postal address may not be that of his or her accountant or tax practitioner. We are therefore compelled, where necessary, to change our clients’ addresses with SARS, from our address to that of each individual client.

It is crucially necessary that you check the addresses in your returns carefully and inform us of any changes that need to be made. Should you receive any communication from SARS, whether it be in this regard or otherwise, you should refer it to our offices without delay for the necessary attention.

REGISTERED ADDRESSES OF COMPANIES AND CLOSE CORPORATIONS

Over the years it has been normal practice, and in terms of the Companies Act, 1973, permissible, for a company’s statutory records to be maintained and held in safe custody by its auditors. For this reason the addresses of virtually all companies and close corporations are registered with the Department of Trade and Commerce as the address of their auditors. The system naturally presented challenges as the address had to be changed each time a company changed its auditors.

In a case earlier this year the High Court ruled as follows in terms of the Companies Act, 2008:

  • a company’s registered address must be the address of an office maintained by the company and not the office of a third party; and
  • if the company has more than one office, its “principal office” must be its registered office – with “principal office” denoting the place where the administrative business of the company is principally conducted.(If you wish to view the full text of the  Practice Note issued by the Companies and Intellectual Property Commission (CIPC) regarding this matter, go to http://www.cipc.co.za/PracticeNotes_files/PracticeNote2of2012.pdf)

Because of this legal obligation the registered addresses of all entities must now be changed with the CIPC. This brings about an enormous administrative burden for us as the auditors who have to take care of it and, unfortunately, a fee will have to be charged for this service. We shall in due course send clients the necessary documentation to sign in order for the CIPC to be notified.

VAT APPLICATION PROCESS

Any entrepreneur wishing to register for VAT should be aware that the application process is challenging because of SARS’s very strict adherence to the relevant provisions of the applicable legislation and the fact that their requirements are being applied more strictly on an ongoing basis.

The extent of fraud committed with VAT by businesses necessitates SARS looking very closely at the supporting documentation that is required to accompany each application. They also strictly peruse the compliance history of each person involved with the entity wishing to register for VAT, and also the compliance history of any other entities with which they are involved. Furthermore, if in your personal capacity you do not fulfill your obligations towards SARS they will likely not register your entity for VAT since your conduct will indicate that you may also not manage your entity responsibly.

SARS strives to nurture a society that complies 100 per cent with our country’s laws, and each of us must be aware of this when we communicate with them.

You are welcome to contact Christa Marais on 021 840 1600 or at christama@asl.co.za in connection with the  requirements for VAT registration, or if you require our assistance with the registration process.

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