We are inundated with calls from people who have received threatening emails from SARS’s attorneys trying to bully their dormant companies into paying the Administrative Penalties of R200 per month per return outstanding that SARS has been hitting them with. These penalties easily run into 10s of thousands of Rands.

What does the law say about that?

Firstly, all companies are automatically registered as taxpayers by CIPC upon registration as companies.

But, do they have to submit tax returns?

Every year, the Commissioner for Inland Revenue has to, in terms of s66 of the Income Tax Act, publish a Notice (you can Google Government Gazette No 50741) stating who must submit tax returns.

Here’s what it the one above says:

2. Persons who must submit an income tax return

The following persons must submit an income tax return:

(a) Every company or other juristic person, which was a resident during the 2024 year of assessment that— (i) derived gross income of more than R1 000; (ii) held assets with a cost of more than R1 000 or had liabilities of more than R1 000, at any time; (iii) derived any capital gain or capital loss of more than R1 000 from the disposal of an asset to which the Eighth Schedule of the Income Tax Act applies; or (iv) had taxable income, taxable turnover, an assessed loss or an assessed capital loss;

So, on what grounds does SARS impose those penalties? None whatsoever!