28 Dec SARS small business tax guidance
We found this article on SARS website regarding tax considerations for small businesses in South Africa (link). The article is reproduced below for your convenience.
- Registering for Turnover Tax. Turnover tax is a simplified tax system for small businesses with a qualifying turnover of not more than R1 million per annum. It is a tax based on the taxable turnover of a business and is available to sole proprietors (individuals), partnerships, close corporations, companies and co-operatives. Turnover tax takes the place of VAT (in the instance that you have not decided to elect back into the VAT system), provisional tax, income tax, capital gains tax, secondary tax on companies (STC) and dividends tax. So qualifying businesses pay a single tax instead of various other taxes. It’s elective – so you choose whether to participate. For Tax Tables see below.
- Registering your business for VAT
- Registering for PAYE, UIF and SDL
If you are starting out and need to register as a company, you will have to contact the Company and Intellectual Property Commission (CIPC), formerly called CIPRO. In the case where you are already registered as a company and you meet certain qualifying requirements, you may register as a small business corporation (SBC) in order to get additional tax incentives. One of the incentives for SBCs is reduced corporate tax rates, as per below tables.
- Register for Income Tax
- Register and do eFiling
- Do your income tax as an individual
- Do your payroll taxes as a business
- Do Record Keeping
- Categorise your business
- Managing your Tax Compliance Status with SARS
- Be a Representative for your tax matters
- Do Turn-over Tax
- Do Value-added Tax (VAT)
- Check if your Tax Practitioner is registered and more.
Applicable Tax rates
SBC tax rates for financial years ending on any date between 1 April 2016 and 31 March 2017:
|Taxable income (R)||Rate of Tax (R)|
|0 – 75 000||0% of taxable income|
|75 001 – 365 000||7% of taxable income above 75 000|
|365 001 – 550 000||20 300 + 21% of taxable income above 365 000|
|550 001 and above||59 150 + 28% of taxable income above 550 000|