Date: March 13, 2020

Author: Jaco Swart

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The Different Types of Tax and How They Impact Your Business

Registering your business for tax is a requirement set by SARS, as your registered business must process a tax reference number. If you are operating as a sole proprietorship, your personal tax number is what you will work with.

Depending on the nature of your business, your competency for other tax forms may differ. So what taxes should your business pay?

Provisional Tax

As soon as you commence business you will become a provisional taxpayer and will be required to register with your local SARS office as a provisional taxpayer within 30 days.

The payment of provisional tax is intended to assist taxpayers in meeting their normal tax liabilities.

This occurs by the payment of two installments.

The first provisional tax payment must be made within six months after the commencement of the tax year and the second payment not later than the last day of the tax year.

Employees’ Tax

Employees’ tax is a system whereby an employer deducts employees’ tax (PAYE) from the earnings of employees and pays it over to SARS on a monthly basis.

An employer that pays salaries, wages and other remuneration to any of its employees above the tax thresholds, must register with SARS for employees’ tax purposes.

Once registered, the employer will receive a monthly return that must be completed and submitted together with the payment of employees’ tax within seven days of the month following the month for which the tax was deducted.

Knowing your different tax requirements is as important as keeping an accurate record of your taxes.

You must keep records that will enable you to prepare complete and accurate tax returns if you are involved in a business. You may choose a system of record-keeping that is suited to the purpose and nature of your business. These records must clearly reflect your income and expenditure.

We recommend that you contact a tax professional to ensure that your taxes are done correctly and to keep SARS from knocking at your door.

For us, you are more just a number. Contact us for your professional tax consultation, we deal with SARS, so you don’t have to.

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