Assessed Loss Restrictions effective from 1 April 2022
With the publication of the Taxation Laws Amendment Act, 2021, SARS began restricting the assessed losses that can be carried over to the next year by businesses as of 1 April 2022, to help lower corporate income tax rate.
Businesses will now only be able to offset their assessed losses against 80% of their taxable income or R1 million (whichever is the highest). Any excess assessed losses left over after the application of the new restrictions will be carried over to the next year of assessment.
While this may increase tax responsibilities in the short term, the goal is to lower corporate income tax overall in the long term, to the benefit of your business. The lowering of the corporate income tax rate will ultimately promote additional investment and have a positive effect on wages and employment.
As Wealth Preservationists, S&O Accountants is always at the forefront of developments that affect your financial journey, safeguarding your wealth and making sure your future is in good hands.
We make you a part of the process to help guide you through the decision-making process that leads to an optimal outcome.
Speak to us to understand how these changes will affect your journey