Lets face it, no-one LIKES paying tax, but shying away from it and ignoring it doesn't help.
There are a small minority of people that realise that this strategy costs you more. They do the opposite, they become very comfortable with including tax as part of their financial planning process. It's a fundamental step to a sound financial future.
You have worked hard to make the money,
why not let us work just as hard to keep it!
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Personal Income Tax
Tax paying individuals will fall into one of 4 tax categories:
Tax Submission Exempt Individual
Normal Tax Individual
Provisional Tax Individual
Normal and Provisional Tax Individual
Depending into which tax category you fall, your planning requirements will differ.
Talk to us to help you understand and plan your tax efficiently.
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If you own your own business, there is a powerful link between your personal tax and your company tax. If not structured correctly, you may be paying double tax.
If you are self-employed or a business owner, you will need to pay company tax, or as its known, Corporate Income Tax. How much companies tax you pay and what deductions you can claim will depend on the size and type of your business in South Africa.
Your company will fall into one of the following categories:
For Sole Proprietors, your tax is is handled as a Provisional Tax Individual, and your personal tax and business tax is one and the same.
Registered companies will register with SARS as a separate legal entity. The tax rate for companies is levied at a flat rate of 28% and returns are filed 3 time a year.
QUICK TIP: LOWER TAX RATES FOR SMALL BUSINESS
SARS does have alternate options for micro and small businesses.
If your company's revenue is lower than R 1 000 000 per year,
the option of Turnover Tax exist, where the tax submission process is greatly simplified.
If your company's revenue is lower than R 20 000 000 per year, and meet some extra requirements,
you may register as a Small Business Corporation (SBC) in order to get additional tax incentives.
One of the biggest incentives for SBCs is reduced corporate tax rates.
PAYE - Pay As You Earn
This is an individual income tax on the salary of employees, applied on a sliding scale rate dependant on the employee salary, but has to be withheld by the employer. If you have employees, you will need to arrange their PAYE contributions and make the regular payments to SARS.
UIF - Unemployment Insurance Fund
UIF is an unemployment benefit fund payable to those who have been in employment for at least 24 hours per week if they become unemployed, sick or take maternity leave. It is a short-term contributions-based benefit and is funded through contributions of a percentage of the employee's salary.
SDL - Skills Development Levy
SDL is payable by employers to promote the learning and development of employees in South Africa. Employers become liable for SDL if their total annual salary bill is more than R 500,000.
DWT - Dividends Withholding Tax
Dividend tax is imposed on any dividends paid to the shareholders of a company. It is a tax levied on the shareholder but withheld by the company making the payment, so if your company has shareholders who receive dividends payments, you will be responsible for deducting tax from the payment and submitting it to SARS.
Unfortunately, your tax liability as a company does not end with companies tax, in addition, if you have employees, your business will be responsible for the following taxes as well:
All a bit much ?
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Value Added Tax (VAT)
VAT is a tax based on the value of goods or services. VAT is charged when a VAT-registered business sells goods or services to another business or to a non-business customer.
VAT can be shown on top of a price if it is a business-to-business sale and will be shown within the price if it is a direct to consumer sale.
When a business charges VAT on a sale they are collecting that money on behalf of SARS. If a business is VAT registered they can reclaim the VAT they have paid on purchases. The difference between what they have charged on sales and what they have paid on purchases must then be paid to SARS.
Any business selling VATable products or services can become VAT registered. However businesses with a turnover in excess of R1 million in any consecutive twelve month period will be required by law to register.
QUICK TIP: PLAN AHEAD FOR VAT REGISTRATION
If your business is currently nearing the VAT threshold, you would need to start planning the implementation.
Once you start adding VAT, someone needs to pay the extra 15%, either your company, or your customers.
If all your current customers are businesses that are already VAT registered, you can pass on the VAT as they will claim it back from SARS.
However, if your customers are mostly private individuals, or small unregistered companies, you would need to roll out much more delicately.