Frequently asked
Question
Our FAQ section provides concise answers to common personal and business tax queries, helping you stay informed and compliant.
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For businesses
What are the main types of taxes that South African businesses need to consider?
Corporate Income Tax (CIT): Paid by registered companies on net profits.
Value-Added Tax (VAT): Indirect tax charged on goods and services (businesses must register if turnover exceeds the current VAT threshold).
Pay-As-You-Earn (PAYE): Withheld from employees’ salaries and paid to SARS.
Provisional Tax: Businesses (and some individuals) pay tax in portions during the year, based on estimated taxable income.
Dividends Tax: A tax on dividends distributed to shareholders.
Does every business in South Africa have to register for VAT?
Not necessarily. Businesses with an annual taxable turnover exceeding the compulsory VAT threshold (currently R1 million over 12 months) must register for VAT.
Businesses below that threshold can voluntarily register if it is beneficial or if their clients expect VAT invoices.
It is recommended to consult with one of our accountants to decide whether voluntary registration is advantageous.
What is Provisional Tax, and is my business required to register for it?
Provisional Tax is a system where taxpayers (including certain businesses) pay tax in instalments during the tax year, rather than once at year-end.
Companies and individuals who receive income other than salaries (such as consulting fees or business profits) typically must register as provisional taxpayers.
The objective is to spread the tax liability more evenly over the year.
What is Turnover Tax, and who qualifies for it?
Turnover Tax is a simplified tax system aimed at small businesses with an annual turnover of R1 million or less. Instead of paying standard company tax, VAT, provisional tax, and other levies separately, eligible small businesses pay a single turnover-based tax.
It can reduce the administrative burden but does not suit all businesses. Consulting CTAX Solutions can help you determine if Turnover Tax is right for your operations.
How often must my business submit financial statements?
Close corporations (CCs) and private companies must compile annual financial statements for SARS and regulatory compliance (like the Companies and Intellectual Property Commission, CIPC).
Depending on the size and nature of your business, additional requirements may apply (e.g., independent reviews or audits). It’s best to maintain regular monthly or quarterly management accounts to monitor finances continuously and assist with timely reporting.
for individuals
Who needs to register for Personal Income Tax in South Africa?
Generally, individuals who earn above a certain annual threshold (as set by the South African Revenue Service, SARS) need to register for and submit tax returns.
If your income (including salary, investment returns, and side-business income) is above the tax threshold or if you have additional sources of taxable income (like rental income or freelance work), you will likely need to register and file.
When is the tax season for individuals, and what are the filing deadlines?
The SARS tax season for individuals typically opens around July each year and closes sometime in October or November (specific dates can vary from year to year).
Provisional taxpayers have slightly different deadlines, often extending into January of the following year. Always check the latest SARS announcements or consult a tax practitioner for precise deadlines.
What happens if I miss the submission deadline for my tax return?
If you fail to submit your tax return on time, SARS may impose administrative penalties based on how late the submission is and how many returns are outstanding.
These penalties can accumulate, so it is crucial to file on time or request assistance or extensions if you anticipate delays.
What is an IRP5/IT3(a) certificate, and why do I need it?
An IRP5 (or IT3(a) in certain cases) is a tax certificate your employer issues that outlines your gross earnings, deductions (like PAYE and UIF), and other relevant information needed to complete your tax return.
You need this document to file an accurate personal tax return with SARS.
Do I need to file a tax return if I earn below the tax threshold?
While you may technically be below the tax threshold and not owe tax, SARS often requires a return if you have multiple sources of income or if you’ve received allowances or certain types of lump sums.
It’s best to consult with a tax practitioner or use the SARS online tool (eFiling) to verify whether you’re obligated to submit a return.
