>What you need to know about business tax
What you need to know about business tax
Is tax making your head spin? As if income tax wasn’t bad enough, now you have to worry about business tax too!
Well, don’t worry, SARS has made it easier for micro businesses and entrepreneurs. These are businesses that bring in less than R1 million in revenue per year.
- Paying your taxes if your turnover is less than R1 million per year:
It’s called Turnover Tax and it’s ONE tax assessment that replaces Income Tax, VAT, Provisional Tax, Capital Gains Tax and Dividends Tax. What it means is you now don’t have to submit numerous returns and forms to SARS every year. But you must be registered for Turnover Tax, so speak to SARS or your accountant about this.
It’s simple to work out, you just apply a tax rate to your turnover as follows:
|
Turnover (R) |
Rate of tax (R) |
|
0 - 335 000 |
0% |
|
335 001 - 500 000 |
1% of each R1 above 335 000 |
|
500 001 - 750 000 |
1 650 + 2% of the amount above 500 000 |
|
750 001 and above |
6 650 + 3% of the amount above 750 000 |
- Corporate tax
Corporate tax is at 28% in 2016. The government is finally realising that it needs business on its side for foreign investment so hopefully we will see some more amendments in business tax in the years to come.
- What happens if you don’t pay tax?
SARS charges you huge penalties if you don’t pay tax so it is in your interest to make sure you are tax compliant.
If you look at these points above, tax is not that complicated , you just have to keep good accounting records, so make sure you hire someone if you are not a finance buff!
Here are some tax tips to help you save more on tax!