Assessed losses that won’t carry forward
SARS seems to be trying everything in the book to squeeze more out of those who pay tax.
Now it’s all about assessed losses.
If your company had an assessed loss at the beginning of any year, it could carry it forward as a deduction against future taxable income provided it traded in that year.
This remains the case for companies whose taxable income is less than R1m.
However, for those whose taxable income exceeds R1m the set-off is limited to 80% of the taxable income.
Evidently, although s20 is not absolutely clear on this, the balance of the assessed loss not so utilised can be carried forward into future years. This means that ultimately, the entire assessed loss will in fact be set off, but over a longer time period.
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