Tax Tips

Tax can be a fine line to walk, between saving costs and staying compliant, use these tax tips to help you.

Tax Thresholds

Tax Thresholds

  • SBC (Small Business Tax) is a favourable tax table for small businesses earning less than R20 mill in sales for the year
  • A “personal service” company can not apply this tax table
  • Speak to your accountant first

Turnover Tax

Turnover Tax

  • Turnover tax applies to both Sole Proprietors and Micro Businesses that had less than R1 million in Qualifying Turnover for the last 12 months
  • A “personal service” company can not apply this tax table
  • Here you will be taxed only on your income earned between 0% and 3%
  • Speak to your accountant first

Deductible Expenses

Deductible Expenses

  • Deductible expenses are only for Commission Earners, Sole Proprietors and Businesses, it is not available to salary earners. Examples of deductible expenses include, Home Office, Office Supplies, Website costs, Accounting, Advertising, Software Purchases, Entertainment*, Cell Phone expenses, Printing and Stationery, Bank Charges, Travel Expenses*
  • Personal expenses can not be deducted

Donations

Donations

If a donation is made it is only tax deductible if a S18A certificate is received (limited to 10% of taxable income)

Other Tax Submission Dates

Other Tax Submission Dates

  • VAT returns (VAT201) need to be submitted by the end of the following month (if done with efiling) that the VAT period ends.
  • PAYE/UIF/SDL (EMP201) returns need to submitted by the 7th of the following month for which they relate.
  • PAYE/UIF/SDL (EMP501) reconciliations need to submitted in August and February of each year to reconcile the tax payments made to the specific employees.

SARS R500 000 Tax Threshold

SARS R500 000 Tax Threshold

  • This is not the threshold before a person needs to pay tax.
  • This amount is the minimum amount a salary earner has to make before it is a requirement to submit a tax return
  • It only applies to salary earners and not persons operating as a sole proprietor

Register on Efiling

Register on Efiling

Medical Aid Contributions

Medical Aid Contributions

Medical Aid Contributions are not Deductible but a rebate is given. R319 per month for primary member, R319 for first dependent, R215 each dependant thereafter

Should expenses be claimed VAT inclusive or Vat Exclusive

Should expenses be claimed VAT inclusive or Vat Exclusive

  • If you or your company is not VAT registered, you can claim the expenses inclusive of VAT.
  • If you or your company are VAT Registered then you will need to claim the expenses exclusive of VAT

Tax Free Savings

Tax Free Savings

This is how it will work:

  • You do not have to pay income tax, dividends tax or capital gains tax on the returns from these investments.
  • You can only contribute a maximum of R36 000 per tax year (annual limit).
    There is a lifetime limit of R500 000 per person.
  • If a person exceeds the limits, there is a penalty of 40% of the excess amount.
  • A person can have more than one tax free investment, however, you are limited to the annual limits per tax year.

SBC Tax

SBC Tax

  • SBC (Small Business Tax) is a favourable tax table for small businesses earning less than R20 million in sales for the year
  • A “personal service” company can not apply this tax table
  • Speak to your accountant first

Consider other Taxable Income

Consider other Taxable Income

Interest and Rental Income need to be included in your tax return

Retirement Funds and Pension Funds

Retirement Funds and Pension Funds

RA and Pension Fund Contributions are deductible for tax but the deduction is limited to the lesser of R350 000 or 27,5% of Taxable Income (Gross Income less all allowable deductions)

Income Tax Submission Dates

Income Tax Submission Dates

  • 31-Aug Provisional Tax 1, this is an estimate made at 6 months into the tax year for what you expect the full year profits to be and half of that tax is paid
  • 28-Feb Provisional Tax 2, this is an estimate made close to tax year end and based on the last 12 months to determine the tax amount owed, the tax owed less that paid in August is the amount to be paid here.
  • An annual tax return is completed during Tax Season each year (normally June to December), based on accurate figures.
  • The tax owed is then compared to the provisional tax payments already made and if there is a requirement for an additional payment to be made it can be done on this return

Travel Allowances

Travel Allowances

  • Employees need to meet a number of requirements in order to claim travel allowance deduction from SARS.
  • These requirements include maintaining a logbook, recording the total distance travelled for business and personal use and proof of travel expenses should be retained.
  • On assessment employees can claim against costs related to wear and tear of their vehicle, maintenance and repairs, vehicle license costs, insurance costs, and finance charges.
  • SARS has a log book template available on their website which is available to all.