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We have already outlined how to register as an essential business during the national lockdown here, and the process of applying for the temporary employee/employer relief scheme (TERS) here.

Now, 2oceansvibe’s favoured tax experts, Galbraith | Rushby, are covering what happens if your tax submissions are filed late as a result of COVID-19…

What happens if your tax submissions are filed late as a result of COVID-19, and you incur interest and penalties? Currently, SARS has not relaxed submission deadlines and are requiring tax returns to be submitted timeously.

The Tax Administration Act contains section 187 (7), which states that if interest is payable as a result of circumstances beyond the taxpayer’s control, SARS can direct that the interest is not payable. The circumstances referred to are a “natural or human-made disaster”, “civil disturbance or disruption in services”, or “serious illness or accident”.

The coronavirus would most certainly be a natural disaster and could very well lead to civil disturbance and disruptions in services. However, you will be required to prove a direct link between the pandemic and your inability to pay the tax due.

Similarly, section 218 provides for relief from penalties if exceptional circumstances exist and the person can show that they were incapable of complying. The list of exceptional circumstances is:

• Natural or human-made disaster,
• Civil disturbance or disruption in services,
• Serious illness or accident,
• Serious emotional or mental distress,
• A delay by SARS to provide sufficient information for an adequate response for information by SARS,
• A serious financial hardship, such as:
  • In the case of individuals, lack of basic living requirements or
  • In the case of business, an immediate danger that the continuity of the business operations and the continued employment of its employees is jeopardized or
• Any other circumstance of analogous seriousness.

SARS have not made any announcement or public statement as to what will be necessary to prove a causal link between COVID-19 and the interest or penalty.

Visits to SARS branches

However, SARS has issued a letter to tax practitioners stating that appointments will be available at SARS for services that are not available online. However, these should be kept to a minimum.

SARS will issue a letter to the tax practitioner, which will need to be produced in the event of being stopped on the roads.

For expert guidance on taxes, and tax compliance, contact Galbraith | Rushby here.