Annual Return is a short description of the most relevant information of a company, also known as Annual Company Renewal. The purpose of an Annual Return is to confirm that the company is trading or will be trading in the future. All companies and close corporations are required by law to file and pay their annual returns with CIPC every year on the anniversary of the company or close corporation registration date. If these returns are not filed and paid on time, it will incur penalties and can even lead to de-registration of the company followed by the freezing of the company’s bank account as well.
There is, however, a difference between Annual Returns and SARS Tax Returns. An Annual Return is like a ‘revival’ for the company and confirms whether CIPC has the most recent information of the company and that the company is still in business. A Tax Return is filed with SARS and focuses on the taxable earnings of a company in order to determine the tax accountability of the company to the State.