First things first, what is tax compliance and cashflow planning?

Tax compliance is when you submit your tax returns (for all tax registrations) on time and make payment on time. This will result in no additional money owed to SARS, no penalties and interest and having the benefit of receiving a tax clearance certificates at a moment’s notice.

Cash flow planning is the ability to plan your payments and receipts to pay creditors on time without incurring unnecessary penalties and interest. Part of cash flow planning will be to invest surplus cash and by enhancing your working capital funding and eliminating your asset redundancy.

Knowing your deadlines and planning in advance is the key to tax compliance and optimal cashflow positions.

Missing a tax deadline can be costly:

Here is a summary of the most popular tax types and their deadlines.

Income Tax:

For this tax type you get corporate- and individual income tax. In both registrations you get provisional and non-provisional taxpayers.

Corporate income tax registration will be for a company, closed corporation, trust, or any registered entity. For this tax type, provisional tax is mostly mandatory. The first provisional tax return is due within the first six months after year end. The second provisional tax return is due at year end.
Annual income tax returns are due 12 months after year end.

These dates can be explained as follows:

The tax year end for individual tax registrations is 28/29 February. Provisional tax will be due six monthly.

Taxpayer R will have to file his 2022 (tax year ending 28 February 2022) tax return in November 2022.

Value Added Tax (“VAT”):

There is a penalty for late submission, late payment and interest being accrued until the outstanding amount is settled. Non submission penalties will be raised until all tax returns are submitted.

Pay as you Earn (“PAYE”):

There is a penalty for late submission, late payment and interest being accrued until the outstanding amount is settled. Non submission penalties will be raised until all tax returns are submitted. Non submission penalties will be raised on EMP201 outstanding returns as well as the bi-annual EMP501 reconciliations. EMP501 reconciliations is due every six months. The first EMP501 for a tax year will usually be due by September/October annually, this is for the numbers from 1 March to 31 August. The second EMP501 for a tax year will usually be due by April/May annually, this is for the numbers from 1 March to 28/29 February.

Donation tax:

Security Transfer Tax (“STT”):

Listed securities: Securities transfer tax must be paid by the 14th day of the month following the month during which transfers of listed securities occurred.

Being aware of these tax deadlines, submitting returns on time and paying on time will save you a lot of unnecessary penalties and interest.

Remember that when the deadline falls on a public holiday or the weekend, you must submit and pay on the Friday or business day before that weekend or public holiday.

E-Filing has a payment function where your tax practitioner can set the payment for a certain date. This payment pulls through to your online banking profile. You then authorise this on your banking profile. This payment method will ensure that the correct payment reference is used for the correct tax type. Most banks will allow future dated payments, i.e., completing the Vat return now and setting and authorising the payment for the end of the month. This payment will then be made on 00:01 on the 30/31st or 7th of the month, depending on the date you selected.

By knowing these deadlines, it is not necessary to wait for that phone call. By planning your cash flow, you can save money and make better decisions.