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What type of business entity would be the most tax efficient for forex trading?

Posted 17 March 2013

I am considering doing forex trading professionally and would like to know what would be the best business entity to open a trading company from a tax perspective. The choices I have to my knowledge are a Sole prop or private company.

Your advice would be greatly appreciated.

TaxTim TaxTim says:
22 March 2013 at 10:16

A company would attract tax at 28% and if you make any dividend payout then a further 15% on those dividends. The highest tax rate for an individual trading as a sole prop would be 40%, but this is for taxable income/profit over R638 000 per year - so you would need to look at the profitability of the business before deciding.

Furthermore the administrative costs of running a company if it just you doing the trading can be a lot and take up quite a bit of unnecessary time.

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