Can you deduct SARS interest and penalties for tax purposes
You cannot deduct fines, amount if interest or penalties for illegal activities in South Africa or any other country where those activities are illegal.
The deductibility of interest and penalties in a year of assessment is prohibited by section 23(o) of the Income Tax Act 58 of 1962, which states:
Section 23(o) specifically prohibits the deduction of any expenditure incurred in respect of “corruption or a corrupt activity, or a fine or penalty imposed as a result of an unlawful activity”.
Therefore your SARS Interest and Penalties will not be deductible when submitting your income tax return.
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