The South African Revenue Service (SARS) has announced that it would temporarily allow taxpayers to report information on controlled foreign corporations (CFCs) under the old filing rules, which were replaced last February.
The SARS had on 26 February 2018, replaced the old IT10B Adobe PDF schedule with a simplified MS Excel IT10B schedule. The new schedule enables taxpayers to declare all CFC information for years of assessment 2012 onwards in one consolidated schedule that does not exceed the file upload limitation on the SARS eFiling.
The obligation to report information on CFCs covers any taxpayer that holds a 10 percent or greater participation right in a CFC. The CFC reporting schedule must be filed alongside income tax returns.
The revenue agency, however, announced the granting to all taxpayers a grace period in which the old schedule will be accepted as a valid supporting document for all income tax return submissions prior to 1 June 2018 in order to accommodate taxpayers who have already prepared their CFC information in the old schedule.
SARS stated that the limitation of uploading only the first 10 schedules as supporting documents to the income tax return, in cases where there are more than 10 CFCs, would remain applicable in respect of the old schedule.
The agency, therefore, advised taxpayers who have not yet started preparing their CFC information to make use of the simplified MS Excel IT10B schedule.
SARS stated: “From 1 June 2018 all taxpayers who, together with any connected person, held at least 10% participation rights in any CFC must complete the CFC information in the new IT10B schedule.
“The new IT10B schedule must be uploaded as a supporting document in respect of CFCs for all income tax returns submitted from 1 June 2018 onwards”, the agency stated.