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April 7, 2020

The world we knew a few weeks ago has changed irreversibly with the advent of Covid-19 into the human world. What awaits us in the new dawn is uncertain and can only be the subject of speculation. For now we cannot be too concerned with the long-term implications of Covid-19 as we need to deal with the immediate impact. We shall publish a number of articles that will assist you to deal with the immediate impact of COVID-19, especially during the lockdown period. 


The COVID-19 pandemic has caused havoc in international markets. At the micro level it has created challenges for businesses in general, but specifically for small and medium size enterprises that are dependent for their survival on ongoing cash flow generated by operations.

The 21-day shutdown period has brought many of these businesses to a grinding halt, threatening their very existence. Government has announced various measures to assist small and medium enterprises, as well as individuals impacted by the pandemic. 

One of the challenges most businesses face is the inability to comply with legislated timeframes during the lockdown period. In this article we shall deal with transitional relief rules applicable to legislated timeframes.

In subsequent articles we shall deal with specific tax and other relief provided through government and non-government organisations.

The Covid-19 relief legislation

Government issued two draft bills dealing with the disaster relief from a tax perspective. i.e. the Disaster Management Tax Relief Bill and the Draft Disaster Management Tax Relief Administration Bill. The bills can be obtained from the SARS website at

Extension of timeframes

For the technically minded, the transitional rules are contained in section 5 of the Draft Disaster Management Tax Relief Administration Bill.

Essentially the transitional rules determine that any day falling within the lockdown period can be ignored as if it never existed (it is regarded as dies non). The count-down is therefore suspended during the lockdown period. The lockdown period includes any period that the Government may add after the expiry of the initial 21-day lockdown period. 

Extension relating Tax Administration Act timeframes

The most important timeframes impacted by the extension relief rules are:

  • The time period within which an assessment prescribes is suspended if the assessment would have prescribed in the lockdown period. So, if you have been holding your breath for an assessment to prescribe, you may have to hold it a little longer.
  • The time period within which an assessment becomes final is suspended if the assessment would have become final in the lockdown period. This effectively delays the deadline within which a taxpayer must object to an assessment. 
  • Any timeframes provided in terms of the dispute resolution process is suspended if the deadline falls within the lockdown period.

Extensions relating to Customs and Excise Act timeframes

Similar relaxation rules as discussed above apply to certain Customs and Excise requirements. 

The draft legislation furthermore provides that the transitional rules can be extended on application to timeframes not specifically covered in the draft bill. This rule only applies if the taxpayer can prove that the non-compliance resulted from the lockdown. It also does not apply if the normal legislation allows for an application for extension. Under these circumstances the normal application process must be followed and the relief provisions will not apply.

Extensions relating to Tax Administration Laws Amendment Act 2019 timeframes

For dividends to be exempt from dividends withholding tax the beneficial recipient of the dividend would in future be required to issue the company paying the dividend with a beneficial owner certificate which will be valid for 5 years. 

The legislation would have come into operation on 1 July 2020. The effective date of the legislation has now been pushed forward to 1 October 2020.

Extensions relating to Value-Added Tax

To export movable goods at the zero rate of VAT, the goods must be physically exported within a certain timeframe. Binding General Ruling (VAT) 52 allows for the following extensions: 

  • Zero-rated direct and indirect exports – The  BGR extends the current 90-day period within which the goods must be exported by a further three months. 
  • Standard-rated indirect exports – The BGR extends the period within which a refund of VAT may be applied for via the VAT Refund Administrator to six months. 

The relief does not apply to goods where the time for exporting the goods has lapsed on or before 25 March 2020.

To what do the transitional rules not apply?

The extensions do not apply to the normal submission of VAT, Income Tax, PAYE and other periodic returns. These returns must be submitted within the timeframes currently allowed for such.


In summary, it is essentially business as usual with regards to normal compliance requirements. The relief only applies in specific limited circumstances. Businesses must therefore ensure that their normal compliance processes continue to function effectively to avoid unnecessary non-compliance consequences.

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