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Do I need to transfer service contracts from personal account to my company?

Posted 30 March 2016 under Tax Q&A


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Geoman says:
22 March 2016 at 22:35

I recently registered a business. I however still run an online ecommerce site where the proceeds go to my personal account by way of EFTs, Cash, SnapScan and PayFast. I also pay vendors from my personal account. Can the net profit simply be transferred to the business account for tax purposes or do I need to re-register all of the above services with the company details. The ultimate goal is of course to avoid having a large income tax from both a salary and this 'sideline' ecommerce store.

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TaxTim TaxTim says:
23 March 2016 at 9:11

Ideally you will need to transfer everything to the company. Do you transact in the name of the company?

Geoman says:
23 March 2016 at 18:54

The ecommerce store operates under a completely different name than the company.

If I understand it correctly SARS doesn't mind into which account cash flow, flows. Can't I then simply account for the income from the ecommerce store in the company books and then also make a 'loan' to myself of the same amount.

TaxTim TaxTim says:
30 March 2016 at 8:50

You could do that, but it is still advisable to transfer the accounts etc in the name of the company. Otherwise SARS would look at it and wonder if the company is actually doing any work.


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