The information in this guide about value added tax and other taxes, duties, levies and contributions reflects the applicable rates at the date of its publication. Further, the guidance and interpretation notes referred to in this guidance are the guidance and interpretation notes available on the SARS website at the date of this publication.
Overview
General characteristics of different types of businesses
Introduction
- Sole proprietorship
- Partnership
- Close corporation (CC)
- Private company
- Co-operative
- Other types of business entities as described in the Act
Members have limited liability, that is, they are generally not liable for the CC's debts. Shareholders have limited liability, that is, they are generally not responsible for the company's obligations.
A business and SARS
Introduction
Information on SMEs, details of various assistance schemes, rebates, incentives and information such as how to start a business, types of business entities and requirements for registration of a business entity can be obtained from the Department of Trade and Industry or on its website www. dti.gov.za.
Income tax
- General
- Registration
- Change of address
- Year of assessment and filing of income tax returns
- eFiling
- Payments at banks
- Provisional tax
- Employees’ tax
- Directors’ remuneration
- How to determine net profit or loss
- Comparative profit or loss statements
- Link between “net profit” and “taxable income”
- How to determine taxable income or assessed loss
- General deduction formula
- Tax rates
- Special allowances or deductions
- Tax relief measures for SBCs
- Tax relief measures for micro businesses (turnover tax)
- Deduction of home office expenditure
- Deductions in respect of expenditure and losses incurred before commencement of trade
- Ring-fencing of assessed losses of certain trades
- Prohibited deductions
- Exemption of certified emission reductions
- Capital gains tax (CGT)
- Withholding of amounts from payments to non-resident sellers on the sale of their
The full amount of any recovery of the allowance will be included in the taxpayer's income under section 8(4)(a). Any recovery of the allowance granted will be included in the taxpayer's income under section 8(4)(a). 20% of the cost to the taxpayer in each of the three consecutive years of assessment.
50% of the cost of the asset in the assessment year in which it was first put into use; 50% of the purchase value of the asset to the taxpayer in the assessment year (first assessment year) in which the asset is put into use; 50% of the purchase value of the asset in the first year of assessment to put it into use;.
Withholding tax on royalties
A withholding amount is required in relation to the sale of immovable property in South Africa by a non-resident. The amount must be deducted by the buyer from the amount paid to the seller, or any other person for or on behalf of the seller. Withholding tax begins on the date the royalty payment is paid or becomes due and payable.
The amount of the royalty must be converted to rand at the spot rate on the day the royalty is paid or becomes payable.
Taxation of foreign entertainers and sportspersons
The withholding tax must be remitted to SARS within 14 days of the end of the month during which the obligation to pay the royalty was entered into or the said payment was made. Overpayment can be refunded if the person paying the royalty submits a claim for a refund within three years of the royalty being paid. The amount received by or accruing to a person who is a non-resident is exempt from income tax under section 10(1)(l) if that amount is subject to withholding tax on royalties.
The amount received by or accruing to a person who is non-resident is exempt from income tax under section 10(1)(lA) if that amount is subject to tax on foreign entertainment and sports personnel.
Donations tax
Any person who is primarily responsible for establishing, organizing or facilitating a performance in South Africa and who will be rewarded for it must notify SARS of the performance within 14 days of the conclusion of an agreement with an artist set. For more information contact the special visiting artists team at the SARS office, Megawatt Park, Gauteng: email at [email protected]. Any property disposed of for a consideration which in the opinion of the Commissioner is not sufficient consideration shall be deemed to have been disposed of in terms of a donation.
If a donor fails to pay the gift tax within the prescribed period (within three months or such longer period as the Commissioner may allow from the date on which the donation became effective), the donor and the recipient (whether resident or non-resident. ) are jointly and severally responsible for this tax.
Value-added tax (VAT)
- Introduction
- Rates of tax
- Collection and payment of VAT
- Application of VAT to supplies and imports
- Zero-rated supplies
- Exempt supplies
- Registration
- Refusal of registration
- How to register
- Accounting basis
- Tax periods
- Calculation of VAT
- Requirements of a valid tax invoice
- Submission of VAT returns
- Duties of a vendor
- Exports to foreign countries
The VAT and customs duties must be paid together, usually within seven days of the arrival of the goods in South Africa. In general, this tax period ends on the last day of the seller's "assessment year", as defined in Article 1(1) of the VAT Act. Export Tax - Is the VAT charged by a seller at the standard rate in respect of the taxable supply of goods or services.
A full and adequate description of the goods or services supplied (indicating, where appropriate, that the goods are second-hand goods).
Estate duty
- Introduction
- Rate of estate duty
In certain circumstances, a vendor may choose to apply the zero rate of VAT where goods are exported indirectly from South Africa under specific conditions in relation to certain means of transport as set out in Part 2 of the Export Regulation51 and provided that the vendor provides the evidence of export as required. The net value of the estate is reduced by a general deduction of R3.5 million (specified amount) to arrive at the taxable amount of the estate. If a person was a spouse at the time of the death of one or more previously deceased persons, the deductible amount of the estate of that person will be determined by deducting from the net value of that estate an amount equal to .
If that person was one of the spouses at the time of the death of a previously deceased person, the deductible amount of that person's estate is determined by subtracting from the net worth of that estate an amount equal to the sum of.
Securities transfer tax (STT)
The South African government has agreements to avoid double inheritance tax with Botswana, Lesotho, Swaziland, Zimbabwe, the United Kingdom and the United States of America.
Transfer duty
- Introduction
- Transfer duty rates from 23 February 2011 28 February 2015
- Transfer duty rates from 1 March 2015
In order to ensure that the sale of real property is not subject to both VAT and transfer duties, the Transfer Rights Act contains an exemption from transfer duties to the extent that the supply is subject to VAT. The provisions of the VAT Act will therefore normally take precedence over the Copyright Act where the supplier is an entrepreneur. Sometimes the supply of real property may be subject to transfer rights, even if the seller is a vendor.
For example, the sale of a seller's private residence, or the sale of property used by a seller for employee housing, will be subject to transfer tax, as these supplies are not made in the course of or in furtherance of the seller's business. being a seller. .
Importation of goods and payment of customs and excise duties
- Introduction
- Registration as an importer
- Goods imported through designated commercial points
- Import declarations
- Tariff classification
- Customs value
- Duties and levies
- Importation of goods
- Deferment, suspension and rebate of duties
Most goods are valued according to method 1, the actual price paid or payable by the buyer of the goods. Customs duties, when expressed as a percentage (ad valorem), are always calculated as a percentage of the value of the goods. A specific customs duty (according to Annex No. 1, Part 2A) of the Customs and Excise Act, equivalent to the rate of duty on locally manufactured goods, is levied on goods of the same class or type imported.
The specific customs duty is payable in addition to the ordinary customs duty payable in Annex No. 1, Part 1 of the Customs and Excise Act. c) Anti-dumping duties, countervailing duties and safeguard measures on imported goods.
Exportation of goods
- Introduction
- Registration as an exporter
- Export declarations
For VAT purposes, the value to be attributed to the importation of goods into South Africa is deemed to be the value of the goods for customs purposes, plus any duties levied under the Customs and Excise Act on the importation of those goods, plus a further 10% of said customs value. At the end of the grace period, the customer has an additional seven days to settle the account. Goods may be stopped or detained on a risk basis to verify the correctness of the declaration.
There is provision for the imposition of fines, in addition to seizure of goods, where goods have been improperly handled or false declarations made.
Free Trade Agreements and preferential arrangements with other countries
- Bi-lateral Agreements (non-reciprocal)
- Preferential dispensation for goods entering the RSA (non-reciprocal)
- Free or Preferential Trade Agreements (FTAs and PTAs) (reciprocal)
- Generalised System of Preferences (GSPs) (Non-reciprocal)
Any exporter of goods must, before exporting such goods from South Africa, present an import letter in the prescribed form to the controller. All facilities constructed or acquired must be cleared by Customs for audit purposes to ensure compliance with the requirements of the Customs and Excise Act, 1964 and those set out in other relevant documents, e.g. the revised Kyoto Agreement and the SAFE Standards Framework (to secure and facilitate world trade) etc.
Environmental levy
- Plastic Bags (Part 3A of Schedule 1 of the Customs and Excise Act, 1964)
- Electricity generated in South Africa from non-renewable resources (Part 3B of Schedule 1
- Electrical filament lamps (Part 3C of Schedule 1 of the Customs and Excise Act, 1964)
- Carbon dioxide (CO 2 ) vehicle emissions levy
Electricity generated under specific conditions as set out in Note 2 to Schedule 1, Part 3B to the Customs and Excise Act, 1964 is not liable for this charge. The charge is based on certification by the vehicle manufacturer or, in the absence thereof, according to established methods of calculation as set out in Note 5 to Schedule 1 Part 3D to the Customs and Accise Act, 1964. The emission charge is in addition to the current ad valorem luxury tax on new vehicles.
In this case, R1800 will be added to the price of the vehicle before calculating the price including VAT.
Air passenger departure tax
Skills development levy (SDL)
Unemployment insurance fund (UIF) contributions
Note: Guides on environmental charging (such as on emissions tax and plastic bags) are available on the SARS website under Find a publication.
A business and other authorities
- Unemployment Insurance Commissioner
- South African Reserve Bank – Exchange control
- Department of Trade and Industry
- Broad-Based Black Economic Empowerment Act 53 of 2003
- Environmental
- Safety and security
- Labour
- Promotion of Access to Information Act 2 of 2000
- Regulation of Interception of Communications and Provision of Communication-related
- Electronic Communications and Transactions Act 25 of 2002 (ECTA)
- Prevention of Organised Crime Act 121 of 1998 (POCA)
- Financial Intelligence Centre Act 38 of 2001 (FICA)
- Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act)
- Prevention and Combating of Corrupt Activities Act 12 of 2004 (PCCA Act)
- Companies Act 71 of 2008
- National Small Enterprise Act 102 of 1996
- Lotteries Act 57 of 1997
- Promotion of Administrative Justice Act 3 of 2000 (PAJA)
- Protected Disclosures Act 26 of 2000
- National Credit Act 34 of 2005
- Consumer Protection Act 68 of 2008
The Ministry of Labor website, www.uif.gov.za, also has useful information in this regard. For more information contact the Department of Trade and Industry or visit its website www.dti.gov.za. The Department of Justice and Constitutional Development website www.doj.gov.za has more information in this regard.
For more information, see the Department of Trade and Industry website at www.dti.gov.za.
General
- Record-keeping
- Importance of accurate records
- Identify nature of receipt
- Prevent omission of deductible expenses
- Establish amounts paid out as salaries or wages
- Explain items reported on your income tax return
- Availability and retention of records
- Record-keeping as required under section 29 of the Tax Administration Act 28 of 2011
- Appointment of auditor or accounting officer
- Representative taxpayer
- Tax clearance certificates
- Non-compliance with legislation
- Interest, penalties and additional tax
- Request for correction (RFC)
- Notice of objection (NOO)
- Dispute resolution
- Service Monitoring Office (SMO)
Under normal circumstances, amounts paid to employees for services rendered are taxable in the hands of the employees. A taxpayer is required to keep books and records of the taxpayer's business to make them available at all times for inspection by SARS. The retention period begins from the date of the last entry in the relevant document, document or book.
The name of the representative and his or her position in the company or CC must be submitted for approval to the SARS office for the district in which the company or CC has its registered office.
Conclusion
