Taxation



Taxation

Every taxpayer has a responsibility to ensure that all applicable tax returns are submitted timeously to the South African Revenue Services (SARS) and paid where necessary. Continually changing tax legislation places a huge administrative burden upon a taxpayer which can only adequately be taken care of by professional tax practitioners who deal with SARS regularly.  The following are among some of the more common taxes we deal with regularly:

  • Tax on income (including provisional tax)
  • Capital gains tax (CGT).
  • Value added tax (VAT).
  • Employees tax (PAYE).
  • Dividends tax.
  • Donations tax and estate duty.
  • Securities transfer tax (STT).
  • Skills development levies (SDL).
  • Unemployment insurance (UIF).
  • Customs and Excise

Whether you are a small, medium or large enterprise or even an individual we aim to deliver professional taxation services at the lowest cost to you. Advanced tax software developed in-house means that you never have to face mistakes or delays on your tax returns again. We have an in-depth knowledge of the aforementioned taxes and regulate client’s tax affairs in such a way that a tax liability is minimised.  Included in our range of taxation services are:

  • Tax consulting, planning and advice.
  • Registrations and deregistration of taxes.
  • Calculation of tax liabilities.
  • Completion and submission of tax returns.
  • Checking of assessments.
  • Objections to incorrect assessments.
  • Tax directives.
  • Tax clearance certificates.
  • Salary structuring.
  • Arranging of deferred payments.

In South Africa, individual’s tax starts with what a person receives and accrues and includes this as part of their gross income for a particular tax year.  Tax years run from March to February of the next year, for example: 1st March 2016 to 28th February 2017 is known as the 2017 tax year.  Certain exemptions or deduction may be claimed against the gross income, in our preparation of your personal income tax return (ITR12)

Our registered tax professionals specialise in the preparation and submission of your tax return or provisional tax that may include calculations of allowances you received or Capital Gains Tax and Fringe Benefit Tax.

Income tax is the normal tax which is paid on your taxable income.

Examples of amounts an individual may receive, and from which the taxable income is determined, include –

  • Remuneration (income from employment), such as, salaries, wages, bonuses, overtime pay, taxable (fringe) benefits, allowances and certain lump sum benefits.
  • Profits or losses from a business or trade.
  • Income or profits arising from an individual being a beneficiary of a trust.
  • Director’s fees.
  • Investment income, such as interest and foreign dividends.
  • Rental income from property rental.
  • Income from royalties’ payments.
  • Annuities
  • Pension income.
  • Certain capital gains.

 

OUR TAX CONSULTING SERVICES

INDIVIDUAL TAX RETURNS
  • Calculation and submission of the ITR12 - personal income tax returns
  • Calculation and and submission of IRP6 - Provisional tax returns
  • Dealing with disputes, tax audits and other queries from SARS
  • Salary structuring and advice
COMPANY TAX RETURNS
  • Calculation and submission of the ITR14 - corporate income tax return
  • Dealing with SARS queries like objections, assessments & disputes
  • VAT audits, checking and corrections if errors are found
  • Payroll taxes - PAYE, UIF and SDL
 
TAX ACCOUNTING

For any and all tax queries, our qualified and experienced tax practitioners can assist you with advice and solutions.

The best way to manage you tax is to have good bookkeeping and accounting services on a monthly basis, and then pro-actively adjust as you go.

 

All businesses are required to register for Business Income Tax with the South African Revenue Service (SARS), this registration is compulsory regardless what type of entity the business is – Private Company (Pty) Ltd; Close Corporation – CC; Trusts; Sole Proprietor, Body Corporate’s

All businesses are also provisional tax payers and are required to submit these returns before the end of August and February every year to SARS.

Even dormant business entities that have not traded or have received any income or revenue are required to submit business tax returns (ITR14).
Since the inception of the Tax Administration Act 2011, it is a requirement that all entities, with the exception of Micro- Business are required to submit with their Business Income Tax returns a full set of Annual Financial Statements for each tax year as supporting documents to this SARS submission
SARS may after submission of your business tax return (ITR14) may select the business for verification and issue a ITR14SD return to confirm and verify the information submitted in ITR14 as a supplementary return
The current company taxation rate is 28% and trusts is 45%

Small business corporations (SBC) do enjoy a bit of tax relief, this subject to certain conditions being met, a reduced taxation rate from 0% – 28% is applied; this rate is dependable on the amount of business’ taxable income for that tax year

SARS Disputes, Objections or Appeals

What is subject to a dispute with SARS either by means of an objection or an appeal?

A taxpayer who feels that he is aggrieved by any SARS assessment may object or create a dispute against any SARS assessment

A SARS assessment is the determination of an amount of tax liability or tax refund, by way of self-assessment by the taxpayer or assessment issued by SARS.

All SARS assessments bear within the notes of the SARS assessment, the allowed time frame granted to the taxpayer to lodge any dispute against that SARS assessment. This time frame must be adhered to, however in special circumstances and with certain acceptable reasons to SARS, an application may be made to SARS to allow the dispute after this required time frame indicated on the SARS assessment has expired.

It is in the interest of all taxpayers to retain the services of a recognised tax professional to assist with any SARS dispute, as this is a legal process and mistakes with any SARS dispute can have vast effects to the taxpayer’s tax position and cannot be easily reversed except through the process of appeal through the Tax Court.


When a taxpayer is aggrieved by any Assessment issued by SARS the taxpayer may object against such Assessment.

For a taxpayer to lodge an object or an appeal, there is certain important criteria that must be taken into consideration prior lodging such grievances.  Certain process must be followed within the set time frames as set out in the Tax Administration Act. The Act protects the taxpayer but if interpreted incorrectly the consequences may be difficult to reverse.

Do you know where the Objection process start or even how to word your grievance?

It is advisable for a taxpayer to appoint a Tax Professional to assist with any dispute or appeal due to the legal process, which may have vast effects to the taxpayer’s tax position if not dealt with correctly.

 

The facilitation of movement of goods and people entering or exiting the borders of South Africa is adminstered by  South African Customs, whose mandate and priorities are to:

  • Provide border control management, community protection and Industry Protection
  • Adminsiter trade policy measures and industry schemes; and
  • Collect revenue

Due to the importance to combat illicit trade activities JOY FINANCE CONSULTANTS are now assisting clients to register for Customs and Excise. If you are in the trade of moving goods between borders it will be advisable to have your Customs and Exise codes in order. Please contact our office for more information on how we can assist you to become Customs and Excise Compliant.

 

Import and Export Licence / Code

If a business intends to bring goods into and/or send goods out of the country, it needs to register as an importer and/or exporter with SARS

Importers License

If you are planning to bring controlled goods, used goods, second-hand goods, waste or scrap into the country, you first need to register as an importer with the South African Revenue Service (Sars) and then apply to the International Trade Administration Commission (Itac) for an import permit.

Exporters License

To export certain goods out of South Africa, you must have a permit ensuring that you comply with applicable export control measures.

The export of some goods may be restricted to support strategies of beneficiation or to assist local manufacturers to obtain raw materials before they are exported.

 

This Import and Export Registration process takes 10-20 business days. However if there are delays with SARS due to system errors and workload, the process could take longer.

Once the Import and Export application is complete, you will receive and Import and Export Code.

The Office of the Tax Ombud were established in October 2013 whose main purpose would be to enhance the tax administration system. The Office was modelled on the Tax Ombud systems of Canada, United States of America and United Kingdom.

One of his main responsibilities is to maintain the balance between Sars’s powers and duties and the taxpayer’s rights and obligations. This balance will enhance the degree of equity and fairness in the tax administration. The Office of the Tax Ombud would be the last resort if the taxpayer did not meet any satisfaction with disputes, objections and appeals.

The ins-and-outs of VAT

Whether your business is registered as a Close Corporation, Sole Proprietorship or Private Company, there are various tax requirements you have to meet and one of these could be value-added tax (VAT). Here is a broad explanation of what VAT is and how to meet your tax obligations as a small business.

Although this will add to your administration workload, it can also benefit your company in that you’ll be able to claim VAT back on certain VAT claimable expenses.

OUTPUT tax:  from 1 April 2018 output tax is levied at a rate of 15% (14%) on the supply of goods and services, in the Republic, by a person registered as a vendor, in the course of furtherance of an enterprise.

 

Registering for VAT

Businesses/persons with a turnover of more than R1 million in the past 12-month period are legally obliged to register as a VAT vendor with SARS. A business can also register voluntarily if turnover in a 12-month period has exceeded R50 000.

Should any business “trade online” the compulsory VAT registering threshold is only R50 000 in the past 12-month period.

For more detailed information and any updates on issues surrounding VAT, claims, exemptions, filing and other tax issues, contact us directly on bookkeeping@joyfin.co.za

As tax practitioners, we can also assist taxpayers in receiving a tax clearance certificate, should the business be tax compliant with SARS, as many organisations ask for this prior to dealing with a new service provider.

 

PAYE /SDL / UIF Registration

Pay-as-you-earn (PAYE) or Employees’ Tax is a tax that is deducted from an employees’ income and paid to SARS on a monthly basis. Once a company has employees, it is obliged to register for PAYE.

SKILL DEVELOPMENT LEVY (SDL)

SDL is payable by employers at a rate of 1% of the remuneration (salary) paid to employees. Employers paying annual remuneration for less than R500 000 in a year are exempt from paying SDL.

UIF (SARS)

UIF is payable monthly by employers on the basis of a contribution of 1% by employers and 1% by employees, based on employees’ remuneration (salary) below a certain amount.

Employers not registered for PAYE or SDL purposes must pay the contribution directly to the Unemployment Insurance Commissioner. However, if the employers are registered for PAYE with SARS, they are required to register with the Department of Labour for UIF for declaration.

 

In order to apply for PAYE and/or SDL, the following documents and information are required:

  • CC/Company Documents
  • Members/Directors certified ID copies along with proof of address of one of the members/directors
  • Business description/activity
  • Date on which the first contributor (employee) was employed
  • Estimated payroll for the following 12 months and number of employees on which payroll is based
  • Original letter from bank confirming banking details of the CC/Company stamped by the bank
  • Proof of Address of the CC/Company. It can even be same as the residential address of one of the members/directors, if you don’t have a separate business premises for now or if you trade from home.
  • Power of Attorney which gives us the authority to apply for Income Tax on your behalf

This PAYE Registration process takes 2-5 business days. However if there are delays with SARS due to system errors and workload, the process could take longer.

Once the PAYE Registration is complete, you will receive proof of PAYE registration.