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SARS: Delay of Section 11G & withdrawal of PN31
- 16 July 2024
- SARS Issues
- South African Accounting Academy
It was previously communicated on 16 November 2022 that SARS intends to withdraw Practice Note 31: “Interest paid on moneys borrowed” (PN 31) for years of assessment commencing on or after 1 March 2023. In the same notice it was also requested that representation be made for legislative amendments in place of PN 31 as part of the Budget 2023 Annexure C process.
Following the representations received National Treasury proposed the introduction of section 11G – “Deduction of expenses incurred in the production of interest”, which was taken up in the Taxation Laws Amendment Act No.17 of 2023.
The proposed effective date of section 11G is for years of assessment commencing on or after 1 January 2025.
PN 31 can be downloaded at https://www.sars.gov.za/wp-content/uploads/Legal/Notes/LAPD-IntR-PrN-2012-21-Income-Tax-Practice-Note-31-of-1994.pdf
Click here to access the Notice issued by SARS:
https://www.sars.gov.za/latest-news/notice-from-sars-withdrawal-of-practice-note-31/
Relevance to Auditors, Independent Reviewers & Accountants:
- The Income Tax Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor, independent reviewer and accountant, you need to be aware of the latest guides, notices and other publications issued by SARS.
- Tax practitioners play a critical role in bridging the gap between taxpayers and SARS. As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies and tax practitioners to keep abreast of such changes in so that companies continue to meet their tax obligations.
Relevance to Your Clients:
- Taxpayers have a duty to comply with the Income Tax Act, otherwise they could face fines and penalties.
- As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies to continue to meet their tax obligations.
- Taxpayers should be aware of the latest publications and notices issued by SARS.