NATIONAL NEWS - Special taxes applicable to small businesses
There are a number of tax incentives available to qualifying small businesses like the Turnover Tax (TOT), Small Business Corporation Taxes (SBC) and Employment Tax Incentive (ETI).
Turnover Tax (TOT)
Turnover Tax aims to reduce and simplify tax compliance and the administrative burden on small businesses with an annual turnover of R1 million or less. The Turnover Tax system is a single tax system and replaces Income Tax, VAT, Provisional Tax, Capital Gains Tax and Dividends Tax. Qualifying businesses will declare and pay one (1) tax (unless with a VAT or PAYE option) and only start paying tax when their annual turnover exceeds R335 000. Note: A small business that is registered for Turnover Tax can choose to register for VAT as well.
Small Business Corporation (SBC)
Small businesses with an annual turnover of up to R20 million may qualify to pay Income Tax at a reduced tax rate. If you indicate that you are a small business on your Income Tax Return (ITR14), and meet all the requirements, the reduced rates will be applied automatically.
There is no need to apply for the reduced rates because your SBC status will be determined using information on your ITR14.
Employment Tax Incentive (ETI)
The ETI is an incentive aimed at encouraging employers to hire young work seekers. It was implemented with effect from 1 January 2014. For more information on this, search under “ETI” on the SARS website
Tax Return submission periods per tax type
For more information on your tax responsibilities and how to be tax compliant, visit the website and click on the small business link.
- Employer Filing Season: Employer filing season will commence on April 1 and end on May 31, 2021. All employers who are registered for PAYE will need to submit their EMP501 (PAYE Reconciliations with IRP5 certificates issued to employees) during the Employer filing season. Employers should note the following:
- The EMP501 can be submitted via eFiling, or easyfile for employers with more than 50 employees
- Certificates must be issued to employees ONLY after they have been submitted to SARS and accepted by SARS
- Failure to submit these certificates to SARS can result in severe penalties for employers and will disadvantage your employees who try to submit their personal income tax returns.
- Focus on Registered Employers: The Gauteng South region will be focusing on employers within the region for the first six months of the new financial year, starting on April 1 2021. A special task team has been set up to:
- Assist compliant taxpayers with the submission of reconciliations during the Employer filing season
- Engage employers with outstanding PAYE returns and assist them to comply
- Focus on employers who have failed to pay over the PAYE withheld from their employees. Harsh action is planned against those who are non-compliant. PAYE is not a tax on the employer and the employer holds the money in trust for SARS
- Some visits to the workplaces are being planned to interview employees where non-compliance is detected.
If you are registered for any payroll taxes, please ensure your tax affairs are in order before we need to contact you.
- Taxpayers can now request their Tax Compliance Status (TCS) via a link on the SARS website landing page, without having to log in to eFiling. All you need is your Tax Reference number!