Rishen Narsing, CA(SA)
The ITR14 company tax return is the annual reckoning: everything your business did in the financial year, translated into the figures SARS uses to assess income tax. It is not simply a copy of your income statement. Accounting profit and taxable income are different numbers, and the journey between them is where most returns go wrong.
This guide covers who must file, when, what SARS asks for, the adjustments that matter, and how to file a return that does not attract a verification letter three months later.
Who files an ITR14, and by when
Every company registered with CIPC is a taxpayer, and every taxpayer files. That includes companies that traded at a loss, companies that did not trade at all, and companies in the process of being wound down.
| Situation | Filing obligation | Note |
|---|---|---|
| Trading company with a profit | Full ITR14 with financial statements | Provisional tax already paid is credited against the assessment |
| Trading company with a loss | Full ITR14 | The assessed loss is carried forward, subject to the loss limitation rules |
| Dormant company | Nil ITR14 | Still required, still penalised if omitted |
| Company deregistered mid-year | Final return to date of deregistration | Do not simply stop filing |
From accounting profit to taxable income
This is the heart of the return. Your financial statements are prepared under an accounting framework, whether that is IFRS or IFRS for SMEs. The Income Tax Act has its own rules, and the two disagree in predictable places.
| Item | In the accounts | For tax | Effect |
|---|---|---|---|
| Depreciation | Per your useful life policy | Replaced by the section 11(e) or 12 allowances | Add back accounting depreciation, deduct the tax allowance |
| Provisions and accruals | Recognised when probable | Generally only deductible when incurred | Add back most general provisions |
| Doubtful debts | Per your expected credit loss model | A statutory allowance formula applies | Adjust to the allowed amount |
| Fines and penalties | Expensed | Not deductible | Add back |
| Entertainment and donations | Expensed | Restricted, donations need a section 18A receipt | Add back or restrict |
| Prepaid expenses | Spread over the period | Section 23H timing rules | Adjust the deduction |
What SARS asks you to attach
The ITR14 wizard adapts to the answers you give, so the document list depends on your size and activity. Have these ready before you start:
- Signed annual financial statements for the year, with comparatives.
- The tax computation reconciling accounting profit to taxable income.
- A fixed asset register supporting the wear and tear claim, ideally reconciled to a recent asset verification.
- Provisional tax records, the IRP6 submissions and payment confirmations for the year.
- Supporting schedules for any material or unusual item: related party loans, assessed losses brought forward, capital gains, foreign income.
The Small Business Corporation election
If your company qualifies as a Small Business Corporation, the saving is significant enough to be worth checking every year. The tests are cumulative and all must be met:
- 1Gross income for the year is below the SARS threshold.
- 2All shareholders are natural persons throughout the year.
- 3No shareholder holds shares or an interest in any other company, with limited exceptions.
- 4Investment income and income from personal services stay below a set proportion of total receipts.
- 5The company is not a personal service provider.
12 mo
From year-end to the filing deadline
Nil
Return still due for dormant companies
5
SBC tests, all of which must be met
5 yrs
How long to keep the supporting records
How to avoid a verification
A SARS verification is not an accusation, but it costs you weeks and it holds up refunds. Most of the triggers are consistency problems you can eliminate before filing.
- 1Reconcile turnover across returns. Your ITR14 turnover, your VAT201 declarations for the year and your financial statements should tell the same story. Where they legitimately differ, for example zero-rated exports or non-supply income, keep the bridge schedule.
- 2Match payroll. Salaries in the accounts should reconcile to your EMP501 submissions.
- 3Explain the swing. If profit moved sharply, be ready to say why in one paragraph, with the underlying schedule.
- 4File financial statements that match the return. Different numbers in the AFS and the ITR14 is the fastest route to a query.
- 5Do not leave the balance sheet inconsistent. Directors' loan accounts, assessed losses and deferred tax must roll forward from last year's assessed figures.
Verifications almost always come down to one number that does not agree with another number SARS already holds. Reconcile before you file and the letter never arrives.
Rishen Narsing, CA(SA)
Where the ITR14 fits in the compliance year
The annual return is the last step in a cycle that started twelve months earlier. Accurate monthly processing feeds a reliable trial balance, which feeds sound provisional tax estimates, which means the final assessment holds no surprises. It also runs in parallel with your CIPC annual return, which is a separate filing to a separate regulator.
Related reading: before you file, check whether you would be better off under turnover tax or the Small Business Corporation rates, work through depreciation vs wear and tear allowances for the capital allowance schedule, and review any director's loan account movements.
How Synergy helps
Our tax services cover the full company cycle: provisional estimates, the annual computation and ITR14, and any SARS correspondence, verification or dispute that follows. Where we also prepare the annual financial statements, the return and the statements are built from the same reconciled trial balance, which removes the most common cause of a query.
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