The South African Revenue Service (SARS) introduced certain changes to the Income Tax Return for Companies (ITR14) on 18 April 2016. Changes include the expansion of information required in relation to transfer pricing transactions.
ITR14 increasing the compliance requirements on taxpayers by expanding the information required on an ITR14 relating to a South African taxpayer’s transfer pricing transactions.
Taxpayers are required to needed following additional information when completing transfer pricing return;
- Transfer Pricing: Paid / Payable section of the ITR14: As noted above, the values of domestic transactions are no longer required. Instead, the taxpayer will now be required to indicate, per category of transaction with foreign related parties, the respective countries of such foreign persons and the values per country.
- Transfer Pricing: Received / Receivable section of the ITR14: While the taxpayer is no longer required to indicate the values of domestic transactions, the taxpayer will now be required to indicate, per category of transaction with foreign related parties, the respective countries of such foreign persons and the values per country.
- The ratio of debt in relation to total tangible assets has been included in the return as one of the financial ratios to be computed by the taxpayer.
- Any change with respect to the transfer pricing methodologies/transaction, operation, scheme, agreement or understanding needs to be indicated.
- Whether the company, since 1990, transferred, alienated or disposed of any South African developed (or previously South African registered) intellectual property.
Further, additional information is also required from the South African taxpayer in order to complete the Transfer Pricing Supporting Information section of the ITR14.
