What is the tax on a firm making R120k a year?

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Cape Town - To help make the filing process as seamless as possible Fin24 has joined forces with the SA Institute of Tax Professionals (SAIT), to answer users' tax questions as far as possible.

User question:

My newly created and registered private company makes around R8 000 to R10 000 per month in revenue. Meaning an annual sum of R120 000 or less. What are the tax and VAT implications that I need to be aware of at this stage of the business?

You can list the taxes individually and I will research more on them. I'm currently getting conflicting advice.

Piet Nel, SA Institute of Tax Professionals responds:

We don't have enough information to assist you with the question.  

The question of whether or not a company must register or register voluntary depends on a number of issues, one of which is the total value of supplies (or turnover) for a year (12 months). 

This of course assumes that the activities carried on by the company is not exempt from tax.  It is best to consult a tax practitioner in this regard.  It is compulsory to register if the value is more than R1m.  

The tax rates of the company would also depend on whether it qualifies as a small business corporation or is registered as a micro business.  If not, the tax rate would be 28%. 

A micro business pays tax, on a sliding scale with a maximum of 6%, on its turnover and a small business corporation pays tax at a lower rate on the first R550 000 and 28% thereafter. Between R70 700 and R365 000 the rate is 7%. 

* Have a question? Send it to us and we will find an expert to answer.

Please note: The important deadline dates in the 2015 tax season are:

September 30 2015: Manual/postal submissions
November 27 2015: At a SARS branch (non-provisional)
November 27 2015: eFiling (non-provisional)
January 29 2016: Provisional taxpayers via eFiling

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