Filing accurate tax returns isn’t optional if you want your business to grow and be successful. Every small business owner wants that, right? Why then do so many still get tax and financials so wrong?
The most common reason is a lack of insight into their finances and, secondly, business owners trying to run the business and crunch the numbers at the same time – one or the other ultimately suffers.
Unfortunately, whether you choose to bury your head in the sand or not, there’s no getting away from the fact that in South Africa all businesses are subject to Corporate Income Tax (CIT).
So, what is the current income tax rate for companies in South Africa?
In South Africa, the CIT rate applicable for corporate income of both resident and non-resident companies for tax years ending between 1 April 2018 and 31 March 2019 is a flat 28%.
To comply with and pay the current income tax rate for companies in South Africa, you must first register your business or yourself as a taxpayer. Similar to personal income tax, your business tax return in South Africa will be assessed by SARS.
Although many people think SARS is the only one which benefits from our tax returns, this isn’t the case. There are actually a lot of incentives for taxpayers, especially companies.
To really take advantage of these, you need to keep accurate records of all your financial transactions. To achieve this, it’s advisable to use a quality accounting software programme.
With all your expenses, payments and other transactions organised and recorded in one place, when it comes time to submit your company tax, your financial history is accurate and easily accessible.
Businesses are required to submit an annual tax return between July and November for the previous tax year. You are also required to submit two provisional tax returns, one in the first half of the year and the second by the end of the year, containing estimates of income earned for the current tax year.
All companies in South Africa have to pay tax using the provisional tax system, which is completed in three instalments. The first two payments are based on estimates and are made at six monthly intervals during the tax year. The final payment is made with the final annual tax return, consisting of the balance owed for that tax year.
Company tax in South Africa can be paid in the following ways:
- Online banking
- Electronic funds transfer
- Bank payments
- Swift payment method (available only to foreign payments)
When tax season is looming are you confident and relaxed or disorganised and panicky?
Get organised. QuickBooks is helping thousands of small businesses not only survive but thrive. Call 010 203 4300 or email firstname.lastname@example.org today.