HOW TO COMPLETE THE IT14 RETURN - Sars efiling

1 How to COMPLETE the it14 RETURN | 1 INTRODUCTION This guide is designed to help to accurately COMPLETE income tax returns for companies and close corporations (CC). For assistance visit your local SARS branch or contact the SARS Contact Centre on 0800 00 SARS (7277). Your attention is also drawn to the Practice Notes/Interpretation Notes issued by SARS which can be accessed at The RETURN must be completed and submitted within 12 months after the financial year end of the company/close THE RETURN The it14 RETURN contains existing data printed in pink. To correct or update information, write over the pink text in black ink and capital letters. Use a black pen to COMPLETE the RETURN and keep your writing within the spaces provided. DO NOT strike through the squares that are not applicable. Do not use correcting fluid if you have made a mistake.

2 We also request that you do not fold the RETURN as it will delay the processing of the RETURN . All relevant sections of the RETURN must be completed. An incomplete RETURN will be sent back and will be marked as Not submitted until the completed RETURN is received. This could result in penalties for the late submission of the RETURN . The following fields/sections on the RETURN are mandatory: Signature: The tax RETURN is a legally binding declaration to identify all income received/accrued and all income taxable in the hands of the company/CC. An unsigned RETURN is therefore of no value. The year of assessment (this version of the RETURN can also be used when you are submitting a RETURN for prior years); The tax reference number; Particulars of the company/CC, including the following details: Registered name of the company/CC; Financial year end; Preferred means of contact; Postal address; Registered address; Physical address; Particulars of the Public Officer, including: Surname; Initials; Domicilium Citandi Et Executandi (address for legal purposes); Contact telephone number; and Date of appointment.

3 Bank account details (if applicable); Tax practitioner details (if applicable); Assessment, audit and other information (all); Financial information items, including: Capital/revenue related; Employees/remuneration related; Financing related; Other tax allowances/limitations;HOW TO COMPLETE THE it14 RETURN2 | How to COMPLETE the it14 RETURN Corporate rules; International related; Mining activities; and Short term STARTED Although the financial statements/financial information will be required to COMPLETE the income tax RETURN , NO documentation (other than that which has been requested specifically) must be submitted with the RETURN . All documentation, however, must be retained by the taxpayer for a period of five years after submission of the RETURN . Where the current it14 RETURN does not reflect the necessary fields for the declaration of income or the provision of a specific deduction in the current year of assessment (which might be applicable to a previous year of assessment), the relevant income/deduction must be shown under Other in the applicable section of the RETURN .

4 A schedule must be prepared specifying the relevant components of the income/deductions which comprise the information indicated under Other . This schedule must be retained for a period of five years after the date of the submission of the RETURN to be available should SARS require OF THE RETURNSIGNATURE The public officer is obliged to ensure that COMPLETE and accurate disclosure is made of all relevant information as required on the income tax RETURN . Misrepresentation, neglect or omission to furnish such a RETURN , or furnishing false information, may render a person liable to penalties and/or additional assessments (together with interest) and/or note: If the RETURN is not signed it will be returned and regarded as not having been received. This could result in penalties for the late rendition of the RETURN . If the company/CC is registered as an eFiler and the RETURN is submitted electronically, the password received during registration as an eFiler will serve as the digital RELATING TO THE COMPANY/CC Ensure that the following details are completed in the blocks provided: Year of assessment; Income tax reference number; and Company/CC registration OF DECLARATION COMPLETE the date of declaration of the income tax RETURN in the blocks OF THE COMPANY/CC Ensure all the details relevant to the company/CC are completed accurately and in full.

5 This includes the registered name, trade name, VAT reference number, to COMPLETE the it14 RETURN | 3 PARTICULARS OF PUBLIC OFFICER Ensure all the relevant details are completed accurately and in full. BANK ACCOUNT DETAILS Ensure all the relevant details are completed accurately and in full. TAX PRACTITIONER DETAILS If the company/CC makes use of a tax practitioner to COMPLETE the RETURN , this section must be completed by the tax , AUDIT AND OTHER INFORMATION It is important that all the applicable fields in this section are completed because the information in this section is used during the assessment process. Dormant Companies If the company has been indicated as dormant and has assets, liabilities and/or reserves, the balance sheet information section of the RETURN must be completed. If the company has been indicated as dormant and has derived income during the year, all applicable fields of the RETURN must be completed.

6 Personal Service Provider If the company has been indicated as a personal service provider, the amount of employees that are in the company s service that are non-connected persons must be completed. Province where main industry is carried on The codes for the different provinces are listed in the table below:CODEPROVINCE01 Northern Province02 Mpumalanga03 North West04 Gauteng05 Free State06 KwaZulu Natal07 Eastern Cape08 Western Cape09 Northern Cape Source Code of main industry This is the principal activity practiced by the company. The codes for the different industries are listed alphabetically in the table below:4 | How to COMPLETE the it14 ReturnSOURCE CODEDESCRIPTION0100 Agriculture, forestry and fishing0200 Mining and quarrying0300 Food, drink and tobacco0400 Textiles0500 Clothing and footwear0600 Leather, leather goods and fur (excluding footwear and clothing)0700 Wood, wood products and furniture0800 Paper, printing and publishing0900 Chemicals and chemical, rubber and plastic products1000 Coal and petroleum products1100 Bricks, ceramic, glass, cement and similar products1200 Metal1300 Metal products (except machinery and equipment)1400 Machinery and related items1500 Vehicles, parts and accessories1600 Transport equipment (except vehicles, parts and accessories)

7 1700 Scientific, optical and similar equipment1800 Other manufacturing industries1900 Electricity, gas and water2000 Construction2100 Wholesale trade2200 Retail trade (including mail order)2300 Catering and accommodation2400 Transport, storage and communication2500 Financing, insurance, real estate and business services2600 Long term insurers2700 Educational services2800 Research and scientific institutes2900 Medical, dental and other health and veterinary services3000 Social and related community services3100 Recreation and cultural services3200 Personal and household services3300 Specialised repair services3400 Agencies and other services3500 Employment (salary) Main Source of income Use the Source Code Booklet 2010 available on the SARS website to determine the correct profit SHEET INFORMATION The figures to be used are the figures reflected in the annual financial statement of the company/CC (not the group or consolidated annual financial statements).

8 INCOME STATEMENT INFORMATION The figures to be used are the figures reflected in the annual financial statement of the company/CC (not the group or consolidated annual financial statements). GROSS PROFIT/LOSSHow to COMPLETE the it14 RETURN | 5 When completing the relevant part of the RETURN , the normal accounting meaning attached to the terms reflected in the tax RETURN must be followed. In the event that a company does not have any cost of sales, for example a property rental company, the turnover and gross profit will be the same amount. Inventory adjustments (write-off of obsolete/slow-moving stock): This does not represent the change between closing and opening inventory but the actual write-off for obsolete, slow-moving and/or damaged items that have been written off for the year of assessment. Inventory adjustment (write off reversed credit amount): Previous year s write-off of obsolete and slow moving stock now reversed.

9 EXPENSE ITEMS Alterations and improvements This excludes repairs and maintenance. A summary of the costs, together with a brief description of the nature of the alterations and improvements must be prepared. Compensation paid to employees / directors for loss of office, etc. A schedule must be prepared that reflects the amounts paid and the circumstances leading to the payment thereof. Consulting, legal, and professional fees The total amount for this expense item must only include fees that were paid for services other than audit fees or auditor s services. A schedule must be prepared listing: Name of the person to whom the payment was made; Date of the payment; Nature and purpose of each service; and Amount paid. Insurance premiums unrelated to assets of the company This must include premiums paid to endowment funds and premiums paid on behalf of other parties.

10 A schedule must be prepared listing the description of the premium, the amount, the risk insured and the name of the entity to which the payment was made. All the agreements and insurance policies relating to these premiums must be retained by the company. Restraint of trade A schedule must be prepared that reflects the following: Balance brought forward from the previous year; and Amount carried forward to the next year. Repairs and maintenance A schedule must be prepared that reflects the following: Nature of the payment by category; and Travelling expenses outside the republic Prepare an itinerary in respect of each trip undertaken detailing the following: By whom the trip was undertaken; Position held in the company; Dates of departure and RETURN ; Names and addresses of firms visited; Duration of visit at each firm; Purpose of each visit; Full details of expenses incurred, under appropriate separate headings; Portion of non-business expenses included in the above; and If a spouse has accompanied the traveller, the expenses attributable to the spouse.