Chartered Accountants Viewpoint September 2022

Dear Client

Please take note of the following income tax return filing dates:


Please take note of the following important dates:

  • EMP501 midyear reconciliation 31 October 2023
  • Personal Income Tax for NON-PROVISIONAL taxpayers 23 October 2023

THIS MONTH’S TOPIC: BENEFICIAL OWNERSHIP

The declaration deadline is looming.
IS YOUR ORGANISATION COMPLIANT?

What is “beneficial ownership” and why is this an area of concern for legislators and the government?

As many may be aware, South Africa was officially grey-listed by the FATF (Financial Action Task Force) in February 2023.

Citing unsatisfactory preventative controls surrounding terrorism financing and money laundering, the FATF (Financial Action Task Force) grey-listed South Africa and, in response, the South African government instituted the General Laws (Anti Money Laundering and Combating Terrorism Financing) Amendment Act of 2022.

The act, in effect, necessitates beneficial ownership declarations.

Is this applicable to me?

The following entities are required to submit their beneficial ownership details:

  • All companies registered with the CIPC (Private Companies, Close Corporations, Non-Profit Companies, Incorporations, and certain State-Owned-Companies);
  • All Trusts registered in South Africa.
Why should I comply?

To enforce compliance, the following sanctions may be applied by the relevant legislative bodies for non-compliance:

Direct sanctions may include:

  • A fine not exceeding R10
  • A period of imprisonment for a period not exceeding 5
  • A combination of a fine and
  • A suspension, by the master of the high court, of a person’s eligibility to be a trustee of a
  • A suspension of a person’s eligibility to be a director of a company.

Indirect sanction:

  • Tax compliance on SARS will be shown as non-compliant. This could affect, for example: tender processes and approval, foreign investment allowances, and third-party financing from banks.

It is our belief that indirect sanctions will be the most prevalent sanctions imposed. The relevant legislative authorities do, however, have the power to impose harsher direct sanctions for refusal to comply.

When is the Compliance Deadline?

COMPANIES:

The submission process is as follows:

  • We need to submit your Beneficial Ownership documents to CIPC in the month of your Annual Return.
  • If a company’s annual return was due between May 2023 – October 2023 we have to submit the Beneficial Ownership before the next Annual Return is due.
  • When registering a new company you have 10 days after incorporation, to submit the Beneficial Ownership.

TRUSTS:

Beneficial Ownership for Trusts is to be submitted twice:

  1. Initial submission is to be made to the Maser’s Office through the online submissions.
  2. Beneficial Ownership for Trusts is to be submitted with the SARS income tax return for 2023.
    The deadlines are as follows:

    • Non-provisional taxpayers – 23 October 2023
      • This includes trusts that have no taxable income or have distributed all income to beneficiaries.
    • Provisional taxpayers – 24 January 2024
      • Trusts that are subject to normal tax on their taxable
How do I comply?

Submission of the beneficial ownership information, as well as supporting documents, is crucial to ensure compliance and prevent sanctions as described above.

Contact us for more information.

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