1. Niall Gahan Stella Adriaanse

2. How to stay on the right side of SARS.
Tax
How to stay on the right side of SARS.

3. Agenda Perspective Tax for Individuals Tax for Corporates
Tax on Dividends
Capital Gains Tax
Important Dates
VAT Registration
PAYE Registration
FAQ

4. Sole Proprietor/Partnership
Perspective
Sole Proprietor/Partnership
Business/Owners are taxed as one and the same
Taxed as individuals
Should also be registered as provisional taxpayers.
CC/Company
Have separate legal personality and are taxed separately to the owners
Corporate entities pay company tax.
Will always be registered for provisional tax
Individual
Are liable to pay tax according to the prevailing tax tables as soon as their annual income exceeds the minimum threshold.
May be registered as a provisional taxpayer depending on the income avenues'
The South African Tax Act applies a residence basis of taxation – All income is taxed in South Africa taking into account foreign tax credits paid on assessment.

5. Tax for Individuals Individual tax is payable on any income and can include any of the following: - Salaries - Rental Income - Interest/Dividend Income - Profit Shares - Bonuses - Income in a Sole Proprietorship - Your share of income in a Partnerships

6. Tax for Individuals – Allowable Deductions
Salary Earners
Sole Proprietors / Partners
Retirement Funding (RAF, Provident, Pension Fund)
- Limited to 27.5% of the greater of PAYE income or taxable income excluding retirement fund lump sums – Any amount exceeding R per annum will be carried forward by SARS
All Expenses incurred in the production of income.
Medical Aid Contributions
- Tax rebate of R286 for
taxpayer & first dependent pm
Tax rebate of R192 for each
additional dependent pm
Retirement Funding & Medical costs operate on the basis as a salary earner.
Donations
- Sec 18A PBO approved organisations limited to 10% of taxable income excluding retirement lump sum payments

7. Tax for Individuals Annual Tax Tables 2016/2017
Taxable Income
Taxation Calculation
0 – 188,000
18% of each R1 (over R 75,000)
188,001 – 293,600
R33, % of the amount above R188,000
293,601 – 406,400
R61, % of the amount above R293,600
406,401 – 550,100
R96, % of the amount above R406,400
550,101 – 701,300
R147, % of the amount above R550,100
701,301 and above
R206, % of the amount above R701,300
Primary Rebate: R 13,500

8. Tax for Individuals
Can pay tax over to SARS in 1 of 2 ways:
Via monthly PAYE deductions made by an employer on a monthly basis. The employer must issue an IRP 5 after the end of the tax year indicating the employees total earnings and the amount of tax deducted and paid over to SARS on the employees behalf.
Via Provisional tax if no PAYE is being deducted by anyone. (Mostly the case of independent contracting professionals, i.e. yourselves)

9. Tax for Corporates (CC’s & Co’s)
Corporate Entities can be taxed as:
Micro Businesses
Small Business Corporations
Standard Corporate Entities
Turnover: All invoices raised during a period
Profit: Turnover less business related expenses

10. Tax for Corporates (CC’s & Co’s) Micro Business (i. e
Tax for Corporates (CC’s & Co’s) Micro Business (i.e. Turnover < R1million)
Turnover
Taxation Calculation based on turnover (There is no expense deduction under this tax regime)
0 – 335,000 0%
335,001 – 500,000
1% of the amount above R335,000
– 750,000
R1, % of the amount above R500,000
750,001 and above
R6, % of the amount above R750,000

11. Tax for Corporates (CC’s & Co’s) Small Business Corporation (i. e
Tax for Corporates (CC’s & Co’s) Small Business Corporation (i.e. R1million<Turnover< R14million)
Taxable Income
Taxation Calculation
< 75,000
0% taxable income
75,001 – 365,000
7% of amount over R75,000
365,001 – 550,000
550,001 and above
R 20,300 plus 21% of amount over R365,000
R 59,150 plus 28% of amount over R550,000

12. Tax for Corporates (CC’s & Co’s) Standard Corporation (i. e
Tax for Corporates (CC’s & Co’s) Standard Corporation (i.e. Turnover> R14million and/or anyone with interests in multiple companies)
Taxable Income
Taxation Calculation
Any
Flat 28% of taxable income

13. Taxation on Dividends, Royalties and Interest Dividends are taxed at 15% final with holding tax from 1 March Royalties are taxed at 15% of the gross amount for non-residents and included on the tax return for residents Interest are exempt for the first R23,800 for individuals under 65 and R34,500 for individuals over 65. The balance are taxed at your annual rate.

14. Capital Gains Tax
Capital Gains on the disposal of assets are included in taxable income.
Maximum effective rate of tax:
Individuals 16.4%
Companies 22.4%
Other Trust 32.8%
An Event for CGT is triggered by disposal, sale, donation, loss, death or emigration of an asset.

15. Important Dates 28 Feb 2017: 2017 Tax Year end 2nd 2018 IRP6 Return May 2017: EMP501/IRP5 Reconciliation 2017 July 2017: IT Tax Return due (Salaried Tax Payers not e-filing) 31 August 2017: 1st 2019 IRP6 Return November 2017: IT12 Tax Returns Due iro (Non Provisional Tax Payers e-filing) 31 January 2018: IT12 Tax Returns Due iro Feb 2018: 2018 Tax Year End 2nd 2019 IRP 6 Return 2017 IT14 Companies or CC’s

16. Important Dates PAYE/UIF/SDL – Due by the 7th of the month following the month of the deduction. Unless if the 7TH is on a weekend then the Friday before the 7th (EMP201) – You may not deduct this unless registered. VAT – Due by the 25th of the month following the preceding two months if filing and paying on e-filing the last day of the month

17. VAT Registration Turnover < R50,000 No registration possible
50,000 – 999,999
Voluntary registration
> 1,000,000
Compulsory registration (21 days)
You may not charge VAT unless you are a registered VAT vendor, i.e. you have been issued with a VAT number by SARS.

18. PAYE,UIF,SDL Registration - If you employ an individual in your practice you are required to register with SARS for PAYE and UIF. - If the payroll value exceeds R500,000 you need to register for SDL( Skills Development Levy) as well - Registration can be done online through e-filing -You may not withhold PAYE, UIF or SDL if you are not registered as an employer with SARS

19. FAQ
Depreciation:
This represents the wear & tear cost of an asset that is spread over its useful life.
Example:
Assume we purchase a PC for R9,999. This is recorded as an asset. However, SARS allows you to depreciate it over 3 years.
We can therefore expense an annual depreciation amount on the computer of R 3,333 per annum which is tax deductable.
Generally expense all assets under R 7,500 and capitalize all assets over R 7,500 (With the appropriate depreciation charge per annum allowable by SARS)

20. FAQ Depreciation: Description Allowable depreciation period
Computer Hardware
3 Years
Computer Software
2 Years
Motor Vehicles
5 Years
Furniture & Fittings
Libraries
Any expenditure under R7,500 can be expensed upfront

21. FAQ Outstanding Returns: What is the situation for existing CC’s
Approach SARS immediately, either yourself or through a registered tax practitioner.
You will be liable for certain penalties and interest. Like any condition, the longer you leave this the worse it will get.
Penalties are raised on a monthly basis per return outstanding in accordance with the Tax Administration Act.
What is the situation for existing CC’s
Carry on operating exactly as before the new company’s act which became effective on 1 May 2011.
Only effect is that new CC’s cannot be registered.

22. FAQ Benefits of separate business & private banking accounts
Principle: Always keep business and private separate.
Business record keeping is more efficient with as separate business account
SARS is happy to tax any value coming into your account.
Other Questions?