A SARS (South African Revenue Service) income tax audit is generally aimed at ensuring that you as corporate taxpayer are making the correct adjustments in your income tax computation. These may be triggered by various factors that SARS (South African Revenue Service) may take into account such as discrepancies between income tax and deferred tax. Dealing with SARS (South African Revenue Service)’ audit questions strategically and accurately will save you as corporate taxpayer as well as SARS (South African Revenue Service) valuable time.

A corporate income tax calculation generally contains various adjustments predominantly related to reversal of accounting entries such as provisions and income received in advance, to name just two. A liability raised in the AFS for income received in advance that is not adjusted for the tax computation will, under the watchful eye of a vigilant SARS (South African Revenue Service) auditor, raise questions as these should normally be added back in the tax computation and may in some instances be accompanied by an allowance under section 24C of the Income Tax Act, No. 58 of 1962. In addition, VAT should also in some cases be accounted for iro income received in advance.

Understanding what SARS (South African Revenue Service) is trying to establish puts you in a position to respond strategically and accurately to SARS (South African Revenue Service)’ questions so as to save both you and SARS (South African Revenue Service) valuable time.

Contact us to help you deal with an income tax audit.