SARS STATUTARY COMPLIANCE

What is Corporate Income Tax?

Corporate Income Tax (CIT) is a tax imposed on companies resident in the Republic of South Africa (i.e. incorporated under the laws of, or which are effectively managed in, the Republic, and which derive income from within or outside the Republic. Non-resident companies which operate through a branch or which have a permanent establishment within the Republic are subject to tax on all income from a source within the Republic.

When should Corporate Income Tax be paid?

Provisional Tax

  • First payment – within six months from the beginning of the year of assessment
  • Second payment – on or before the last day of the year of assessment
  • Third payment – seven months after the year of assessment for taxpayers with February year-end and six months after year of assessment for all other cases.

Tax on Assessment
Payment of tax upon an assessment notice issued by SARS must be done within the period specified in such notice.

Corporate Income Tax is payable at a rate of 28%

What is PAYE?
Employees’ Tax refers to the tax required to be deducted by an employer from an employee’s remuneration paid or payable. The process of deducting or withholding tax from remuneration as it is earned by an employee is commonly referred to as PAYE.
Who is it for?
The amounts deducted or withheld must be paid by the employer to SARS on a monthly basis, by completing the Monthly Employer Declaration (EMP201). The EMP201 is a payment declaration in which the employer declares the total payment together with the allocations for PAYE, SDL, UIF and/or Employment Tax Incentive (ETI), if applicable. A unique Payment Reference Number (PRN) will be pre-populated on the EMP201, and will be used to link the actual payment with the relevant EMP201 payment declaration.
How and when should it be paid?
It must be paid within seven days after the end of the month during which the amount was deducted. If the last day for payment falls on a public holiday or weekend, the payment must be made on the last business day before the public holiday or weekend.
What is VAT?

Value-Added Tax is commonly known as VAT. VAT is an indirect tax on the consumption of goods and services in the economy. Revenue is raised for government by requiring certain businesses to register and to charge VAT on the taxable supplies of goods and services. These businesses become vendors that act as the agent for government in collecting the VAT. 
VAT is charged at each stage of the production and distribution process and it is proportional to the price charged for the goods and services.
VAT increased from 14% to 15% from 1 April 2018. VAT is levied on the supply of most goods and services and on the importation of goods. The VAT on the importation of goods is collected by customs. There is a limited range of goods and services which are subject to VAT at the zero rate or are exempt from VAT.

When should I submit returns and make payments?
A vendor is required to submit VAT returns and make payments of the VAT liabilities (or claim a VAT refund) in accordance with the tax period allocated to the vendor. The VAT returns and payments are normally submitted / made on or before the 25th day after the end of the tax period. Late payments of VAT will attract a penalty and interest.
What tax periods are available for VAT?

The following five categories of tax periods are available:

  • Category A
    • Under this category, a vendor is required to submit one return for every two calendar months, ending on the last day of January, March, May, July, September and November.
    • The Commissioner will determine whether a vendor falls within this category.
  • Category B
    • Under this category, a vendor is required to submit one return for every two calendar months, ending on the last day of February, April, June, August, October and December.
    • The Commissioner will determine whether a vendor falls within this category.
  • Category C
    • Under this category, a vendor is required to submit one return for each calendar month.
    • A vendor will fall within this category if :
      • the total value of taxable supplies made by the vendor has exceeded or is likely to exceed R30 million in any consecutive period of 12 months,
      • the vendor has applied in writing to be placed in this category, or
      • the vendor repeatedly failed to perform any obligations as required by the VAT legislation.
         
  • Category D
    • Under this category, a vendor submits one return for every six calendar months, ending on the last day of February and August.
    • This category applies mainly to a vendor who –
      • carries on farming activities, where the total value of taxable supplies is less than R1.5 million for a period of 12 months,
      • is a micro business that is registered in terms of the Sixth Schedule to the Income Tax Act.
  • Category E
    • Under this category, a vendor is required to submit one return for every twelve months, ending on the last day of the vendor’s year of assessment
    • This category applies to a vendor that is a company or a trust fund. Additional criteria, to fall within the ambit of this category, are set out in Chapter 3 of the VAT 404 guide.
What is Dividends Tax?

Dividends Tax is a tax on shareholders (beneficial owners) when dividends are paid to them, and, under normal circumstances, is withheld from their dividend payment by a withholding agent (either the company paying the dividend or, where a regulated intermediary is involved, by the latter). A dividend is in essence any payment by a company to a shareholder for a share held in that company, excluding the return of contributed tax capital (i.e. consideration received by a company for the issue of shares). It is triggered by the payment of a dividend by any: 

  • South African tax resident company; or
  • Foreign Company whose shares are listed on a South African Exchange.
How much will be paid?

The rate of Dividends Tax increased from 15% to 20% for any dividend paid on or after 22 February 2017 (irrespective of declaration date), unless an exemption or reduced rate is applicable.

When should it be paid?

Dividends Tax applies to any dividend declared and paid from 1 April 2012 onwards, and the withholding agent (either the company or the regulated intermediary) should pay the tax withheld to SARS on or before the last day of the month following the month in which the dividend was paid. Dividends Tax payments should be accompanied by a return (DTR01/02). Penalties and interest may be levied for late payments of dividends tax or the late submission of dividends tax returns. 

 

 

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