Changes to Form ITR14 relevant to companies with cross-border transactions

The South African Revenue Service (SARS) implemented changes to the Income Tax Return (ITR) for Companies on 26 February 2018.

A new IT10 schedule has been introduced by SARS for completion by companies with Controlled Foreign Companies (CFCs) requiring companies to disclose all their CFCs, regardless of the number of CFCs, to enable these companies to comply with the provisions of section 72A of the Income Tax Act.

A group of companies that prepares consolidated financial statements (companies with subsidiaries) will now be required to submit their group structure with their ITR14. In addition, a new question pertaining to country-by-country regulations has also been added to the ITR14 in which SARS asks if the “company is a member of a multinational enterprise (MNE) as defined in the CbC regulations”. If the taxpayer responds in the affirmative, additional information needs to be provided in relation to the MNE.

SARS also noted that documents are required to be submitted, including financial statements, and/or other substantiating material such as the certificates and documents relating to income and deductions, proof of tax credits claimed, and particulars of assets and liabilities at the time of e-filing of the ITR14.

These additional disclosure requirements are expected to provide additional information to SARS for purposes of initial risk assessment in relation to cross border transactions.