Understanding how the financial year works in South Africa is important for business owners. With understanding the concept, it can help you prepare your business properly. This can help you prepare accurate financial statements and process your tax returns quickly and efficiently. That’s why we gathered the most important FAQs about the financial year in South Africa.
A financial year, also known as a fiscal year, is a 12-month accounting period that a business uses for financial and tax reporting. The fiscal year is sometimes chosen by the company to coincide with its planning, budgeting and revenue cycles.
Financial year planning is not just important for large corporations but also for small businesses. By understanding the financial year, you can plan better for the upcoming year.
Let’s explore some frequently asked questions (FAQs) about the financial year in South Africa and how it works.
When Does the Financial Year End And Begin in South Africa?
In South Africa, most companies have their financial year end on the 28th of February. This means that in South Africa, the financial year starts on the 1st of March each year for most businesses.
Note: A company may not choose a financial year end that will result in the total financial year being more than 15 months.
Can a Company Change its Financial Year-end?
Yes, you can change your company’s financial year end through the Companies and Intellectual Property (CIPC). To apply for this change, you must comply with the following requirements:
- It must be the first change of the financial year end for a specific year.
- The current financial year must still be ongoing.
- You must fill in the CoR25 form that you can get from the CIPC.
- Your financial year-end must be later than the date of application.
- Your financial year-end must not be longer than 15 months.
- The CoR25 form must be signed by an active director, company secretary or other authorised person(s) of your company.
Note: The fee for changing your financial year-end is R 100.
Can My Financial Year Be Longer Than 15 Months?
Yes, your company’s financial year can be longer than 15 months. To make this happen, you will need to submit more than one CoR25 form which complies with legislative requirements over multiple years.
Note: A company may only extend its financial year once during a particular financial period.
Which Act Regulates Any Changes to a Company’s Financial Year?
Financial year-ends are governed by the Companies Act. The Act intends to provide for the incorporation, registration, organisation and management of companies. In terms of Section 27 of the Act, every company must have a financial year.
What Do I Need to Prepare For The Financial Year-End?
To help make your financial year-end process smoother, consider the following:
- Update your financial records constantly.
- Keep a record of all your invoices and receipts.
- Utilise technology such as accounting software to make things easier for you.
- Keep track of any deadlines such as tax dates to ensure you stay compliant.
- Plan and prepare for the year-end by setting aside taxes each month and predicting your annual tax contributions.
Note: You can use accounting platforms such as Sage to help with your financial statements.
What Are Other Important SARS Dates to Remember for Businesses?
For business, other annual deadlines to remember are:
- 28 February is the last day of the 2024 tax year.
- 1st of March is the first day of the 2025 financial year.
- 31st of May is the deadline for the Employer Annual Declaration period. During this period, employers must submit their annual reconciliation declarations with up-to-date payroll information.
- 31st of October is the deadline for mid-year employer reconciliation submissions.
- 30th of September is the deadline for submitting annual returns to the CIPC.
- 7th of December is the deadline for submitting provisional tax returns for individuals.
Does My Financial Year-end Have to Be On The 28th of February?
No, your year-end date does not have to be on the 28th of February. However, you must obtain approval from SARS to end your financial year on a different date. In addition to this change, your company must also specifically request SARS to change the provisional tax dates.
Note: If you do not get approval from SARS for the changes, SARS will not be able to process the IRP6s for the correct periods as it will not have issued one.
These FAQs about the financial year in South Africa are here to help you stay compliant with financial laws and regulations. Ensure that your financial statements and tax documents are in order so that the financial year-end process can be seamless for you and your business.
For more information on financial year-ends, read our article What Does the End of Financial Year Mean?
