Must the Body Corporate of a Sectional Title Development Register for Income Tax?
Category Advice
The Income Tax Act provides that all levies received and accrued to a Body Corporate, as well as the aggregate of any other receipts and accruals that do not exceed R50,000, shall be exempt from normal tax subject to certain provisos.
On 6 November 2012 SARS released Interpretation Note 64 which provides us with their interpretation of this exemption. In terms thereof, a Body Corporate (unlike a Home Owners Association) is not required to apply to SARS’ Tax Exemption Unit to qualify for this exemption. Instead, a Body Corporate must register for Income Tax and the exemption of their levies and other qualifying receipts shall be applied on assessment. They are however specifically exempt from having to submit provisional tax returns.
Accordingly a Body Corporate must complete and submit annual tax returns even if they are unlikely to have an income tax liability for a particular year of assessment.
For more information, on this subject, contact Johan Greyling.
Author: Smith Tabata Buchanan Boyes
