Turnover tax is a simplified tax system aimed at making it easier for small businesses to comply with their tax duties. The turnover tax system replaces Income Tax, VAT, Provisional Tax, Capital Gains Tax and Dividends Tax. A small business that is registered for turnover tax can, however, choose to remain in the VAT system.
Turnover tax is calculated by applying a tax rate to the turnover of a business. The rates are as follows for 1st April 2013 to 31st March 2014.
Summary of criteria:
• Applicable to business income
• Applicable to individuals, companies or CC’s
• Turnover must be less than 1 million p.a
• Professional services do not qualify e.g Accounting; consulting; Brokers; IT; Estate agents etc.
• Owners of companies cannot have shares in other companies.
• Investment income cannot exceed 20% of total turnover
• Must register before start of tax year.
• Once registered, must remain in system for 3 tax years.
• 2 interim returns and one annual return to be done
• Possible reduced tax
• Limited record keeping required. Only records required are details of assets and liabilities over R10 000 and details of turnover received and dividends declared.
If you would like us to assist you with your personal taxes, please feel free to contact us on: firstname.lastname@example.org or on 031 702 8112. We are happy to help!