Considering a business with a taxable income of R200000. Will it be best to keep it as a partnership or register it as a company? The company is a normal company and not a small business corporation since one of the directors is also involved in another company. At what income will it be better to switch over to a company instead of partnership when it comes to taxation?
A partnership is taxed in the hands of the partner separately, so when the profit is determined it is divided by the number of partners and added to their income and taxed according to the SARS tax rates 2014. Companies are taxed at 28% and then dividends a further 15% so on R200 000 income it is best to keep in a partnership.
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