Hide
Earn under R350,000? Click here to see why you still need to file to get your Tax Refund.
CLOSE
Get SARS Tax Dates and Deadlines in your Inbox
 

We'll tell you when you need to file, along with tax tips and updates.
Try Tim Now

Provisional tax or starting a CC?

Posted 4 December 2015 under Tax Questions


Hello.
Is it me you're looking for?
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your own
Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →
TLab says:
3 December 2015 at 10:50

I am currently employed by a company and earn a fixed monthly salary. I have however started manufacturing and selling goods in my private capacity, completely separate from my company. A typical order would be to the value of R20 000 (turnover), with a total cost-of-sale of R10 000, leaving me with R10 000 profit. I can receiver anywhere from three to twenty orders in a year, with no guarantee of regularity. I have two questions:

1. Do I need to register as a provisional tax payer, or would it be more tax-efficient to register as a sole proprietor or a cc, taking into account the administrative time and costs (paying an accountant etc. )?
2. If I register as a provisional tax payer, do I declare the estimated profit I'm making (i. E. R10 000) on my IRP6 or do I estimate the turnover I'm making (i. E. R20 000) on the tax return? Basically, do I pay tax on my turnover or my profit?

Thanks in advance!

This entry was posted in Tax Questions and tagged , , , . Bookmark the permalink.

TaxTimTaxTim says:
3 December 2015 at 15:46

How much is your fixed monthly salary?


TLab says:
3 December 2015 at 16:01

My fixed monthly salary is R28 000 before tax.


TLab says:
4 December 2015 at 6:37

My fixed monthly salary is R28 000 before tax.


TaxTimTaxTim says:
4 December 2015 at 12:44

Based on the earnings details you have provided, it would be more tax efficient to run your business as a sole proprietor in order to take advantage of the sliding scale tax rates for individuals (versus a flat rate plus dividend rate for companies). There is also significant red tape associated with running a company.

Therefore yes, you need to register as a provisional tax payer.
What is Provisional Tax? How and when?

You can deduct all business related costs from your sales and therefore you pay tax on your net profit only.

Please Register for TaxTim and let us assist you to complete and file your Provisional tax returns and your Individual tax return too!


Get SARS Tax Dates and Deadlines in your Inbox
 

We'll tell you when you need to file, along with tax tips and updates.

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →

Hello.
Is it me you're looking for?
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your own
Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE