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provisional tax on a Pty and small company

Posted 21 April 2016 under Tax Questions


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Becca says:
20 April 2016 at 14:12

I have just opened a PTY. I do not know what my turnover will be. It might be between R 500 - R 400 000 per annum. 1) Do I need to register for provisional tax and when?
2) How do I calculate provisional tax
3) would I fall under SBC or company for tax purposes?
4) what is directors tax and do I need to pay it?

the company is very simple... I have one supplier. I have no extra expenses. I have no assets. I have no employees and I am the only director. Thank you

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TaxTimTaxTim says:
21 April 2016 at 10:15

Yes you would need to register for provisional tax so that you can file provisional tax returns twice a year (Aug and Feb). The next provisional tax return is due 31 August 2016. You can register for provisional tax using SARS eFiling.
In order to calculate provisional tax, you need to estimate your income and then subtract all your company expenses to work out your net profit. Tax is then calculated on the profit at 28% if yours is a normal company, and using lower special rates if you qualify to be a Small Business Corporation (SBC)

Assuming you will be drawing out the company, you need to register your company as an employer for PAYE (i.e. employee tax) and UIF - any drawings made by yourself is deemed to be a "salary" subject to employee tax which you would need to pay to SARS.


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