South Africa Issues Guide On Accounting Periods
Thursday, February 18, 2016
The South African Revenue Service (SARS) has issued an interpretation note
that confirms taxpayers who cannot conveniently return their annual income from
a business or profession to the last day of February may apply for permission
to draw up accounts to another closing date.
The note deals primarily with natural persons and trusts carrying on a trade.
Natural persons and trusts normally have a statutory year of assessment for
a period running from March 1 one year to the last day of February of the succeeding
However, SARS confirmed that the South African tax code provides relief for
taxpayers who find it inconvenient to render annual accounts for business income
derived during a period ending on the last day of February.
SARS may approve an application to draw such accounts to a date other than
the last day of February if it is satisfied that the whole or some portion of
a taxpayer's income cannot be conveniently returned for a year of assessment,
subject to any conditions that the tax agency may impose.
The taxpayer is not required to apportion any income. The approved closing accounting
date will determine into which year of assessment the results for the accounting
period must be included, and the dates on which provisional tax payments must
Accounts covering up to the end of September will be subject to tax in the
year of assessment ending on the last day of February of the same year, and
accounts covering after September of one year will be granted on the basis that
the income will be subject to tax in the next year of assessment.
Approval to submit accounts to a date other than the last day of February is
limited to taxable income derived from a business or profession. SARS will not
permit taxpayers to draw up their returns for a period other than the statutory
year of assessment for any other income, such as remuneration, interest, rentals,
royalties, and dividends.