Category Archives: Tax Registrations

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INCOME TAX

Category : Tax Registrations

A company must be registered with the Company Intellectual Property Commission (CIPC) to obtain a registration number. The company will then be registered automatically as a taxpayer. A company which does not hear from SARS after registering with CIPC, must contact their nearest SARS office. If a company is not yet registered with SARS, they will, for security reasons, need to do their first-time registration at a SARS branch. They will not be able to register for the first time via eFiling.

Depending on other factors such as turnover, payroll amounts, whether involved in imports and exports etc, a taxpayer could also be liable to register for other taxes, duties, levies and contributions such as Value Added Tax (VAT), Pay-As-YouEarn (PAYE), Customs, Excise, Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF) contributions.


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TURNOVER TAX

Turnover tax is a simplified system aimed at making it easier for micro business to meet their tax obligations. The turnover tax system replaces Income Tax, VAT, Provisional Tax, Capital Gains Tax and Dividends Tax for micro businesses with a qualifying annual turnover of R 1 million or less.

Micro businesses with an annual turnover of R 1 million or less. The following taxpayers may qualify:

  • Individuals (sole proprietors)
  • Partnerships
  • Close corporations
  • Companies
  • Co-operatives

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VALUE ADDED TAX

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Category : Tax Registrations

  • It is mandatory for any business to register for VAT if the income earned in any consecutive twelve month period exceeded or is likely to exceed R1 million.
  • Any business may choose to register voluntarily if the income earned, in the past twelve month period, exceeded R50 000.
  • A small business that is registered as a micro business under the Sixth Schedule of the Income Tax Act may also register for VAT and may elect to submit returns and payments every four months, ending on the last day of June, October and February.

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EMPLOYEES TAXES

Category : Tax Registrations

What is the Employees’ Tax  (PAYE)?

Employees’ Tax is the tax that must be deducted by an employer from an employee’s remuneration and paid to SARS. The process is commonly referred to as PAYE. The amounts deducted must be paid monthly by the employer to SARS, and is accompanied by the submission of a completed Monthly Employer Declaration.

What is the Skills Development Levy (SDL)?

The Skills Development Levy (SDL) is a compulsory levy scheme used by government to fund education and training as stated in the Skills Development Act, 1998. This levy is payable monthly by employers to SARS. SDL funds are to be used to develop and improve skills for employees as well as promoting learning and development. What is the

Unemployment Insurance Fund (UIF) contribution?

This is a compulsory contribution to fund unemployment benefits. Since 1 April 2002, the contributions deducted and payable monthly by employers have been collected by SARS and are paid over to the UIF which is managed by the Unemployment Insurance Commissioner. The funds are used to provide short-term relief should workers become unemployed or unable to work for various reasons such as, maternity or adoption leave, illness or relief to the dependants of a deceased contributor.

What is the Employment Tax Incentive (ETI)?

The Employment Tax Incentive (ETI) is an incentive aimed at encouraging employers to hire young and less experienced work seekers. It was implemented with effect from 1 January 2014. It will reduce the employer’s cost of hiring young people through a cost-sharing mechanism with government, by allowing a reduction in the amount of Employees’ Tax (PAYE) payable while leaving the wage received by the employee unaffected.


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EMPLOYERS RECONCILIATION (EMP501)

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Category : Tax Registrations

The Employer Reconciliation Declaration (EMP501)

Employers are required to complete and submit an Employer Reconciliation Declaration (EMP501), and if applicable, a Tax Certificate Cancellation Declaration (EMP601). The declarations should be submitted twice during a year:

• Interim period – which is for the six-month period 1 March to 31 August.

Employers are not required to issue tax certificates to employees for the interim period. Certificates should only be provided to employees whose employment was terminated before the closing of the interim period, due to resignation, death, immigration or an employer ceasing to be an employer.

• Annual period – which is for the full year 1 March to 28/29 February. Employers are required to issue tax certificates to employees for this annual period after submitting copies together with the completed EMP501 to SARS.