Written by Alicia
Posted 19 May 2025
If I run a small business and buy an asset like a vehicle for R200,000 (paid in full and not financed), can I deduct the full amount from my taxable income in the same year? Or do I only deduct the depreciation amount each year?
Also, do vehicles qualify for the 50/30/20% depreciation rule over three years like other small business assets?
Written by Alicia
Updated 15 May 2025
The enhanced tax incentive recently introduced by the government, known as Section 12BA, aims to promote private investment in electricity generation from renewable energy sources to help alleviate the energy crisis in the country. This incentive is a temporary enhancement of the existing renewable energy tax incentive found in section 12B of the Income Tax Act.
Below are the key points:
Availability and Duration
The incentive is available from 1 ...
Written by Nicci
Posted 14 May 2025
South Africa introduced the Two-Pot Retirement System to help people access part of their retirement savings before retirement age, while keeping the rest for retirement. It's a helpful system – but it comes with tax rules that can surprise some people.
If you withdrew from your Two-Pot in the tax year, you need to include the details of this withdrawal in your annual tax return. The fund should have issued you an IRP5/IT3a tax certificate which reflects the withdrawal amount (source code 3926), related tax as well as the tax directive number issued by SARS...
Written by Evan
Updated 13 May 2025
An Income Tax Return (ITR12) is a form that SARS requires all individuals (including provisional taxpayers) to complete and submit to SARS once every year.
The form is used to declare your income, deductions and tax credits to SARS, so that SARS can calculate how much tax you need to pay, or the refund due to you.
Taxpayers, including provisional taxpayers, only need to complete and submit an ITR12 (income tax return) once a year. The ITR12 form allows you to capture all your ...
Written by Evan
Updated 13 May 2025
An IRP6 is a Tax Return completed by provisional taxpayers twice during the tax year to declare their estimated taxable income.
The first provisional tax return must be submitted six months into the tax year (i.e end of August) and the second provisional tax return by the end of the tax year (i.e end of February). Just like regular taxpayers, provisional taxpayers also need to submit their annual income tax return (ITR12) after the tax year that has passed.
It is important to ...
Written by Alicia
Posted 13 May 2025
A financial instrument is a contract that represents money or something of value. For one party, it’s an asset (something valuable), and for the other party, it’s a liability (something owed) or equity (ownership).
Written by Nicci
Posted 7 May 2025
Deemed annuities are regular payments made by the trust to a beneficiary that are treated as taxable income, even though they are not from a formal annuity policy.
SARS sees these fixed or regular trust payments as income (like a salary or pension), and the beneficiary must pay tax on them.
Written by Nicci
Posted 7 May 2025
A trust is a legal arrangement where a person or people (called the trustees) manage money, assets, or property for the benefit of others (called the beneficiaries).
It is often used to protect family wealth and provide for children or dependents.
The income in a trust is taxed at 45%. If income is distributed to beneficia...
Written by Nicci
Posted 7 May 2025
A beneficiary is a person or entity who receives income or assets from a trust, estate, retirement fund or life insurance fund.
In a trust, income distributed to beneficiaries is usually taxed in the hands of the beneficiary, not the trust (based on the “conduit principle”).
In the case of an estate, the estate pays tax before the inheritance is passed on, so the beneficiary usually ...
Written by Alicia
Updated 7 May 2025
A deemed dividend from a trust is when a company pays money to a trust, and that payment is treated as if it were a dividend, even though no formal dividend was declared.
It usually applies when a trust connected to company shareholders receives a benefit from the company. SARS treats it as if the company paid a dividend to the shareholder.
This happens in s...
Written by Alicia
Updated 7 May 2025
The assets and liabilities section in the annual tax return (ITR12) needs to be completed if you:
Each asset should be reported at its original cost — the amount you paid at the time of purchase or investment. According to SARS, these entrie...
Written by Alicia
Posted 6 May 2025
A local capital gain is a a profit made on the sale of any local asset such as a property (primary residence or rental property), shares (listed or unlisted), unit trusts or cryptocurrencies.
A profit is made when you sell the asset for more than you paid for it.
A capital loss is a loss incurred on the sale of an asset such as a property (primary residence or rental property), shares (listed or unlisted), unit trusts or cryptocurrencies.
A loss is made when you sell t...
Written by Alicia
Posted 6 May 2025
Any foreign debts, payable to either a foreign, bank, company or individual as at the end of the tax year.
Written by Alicia
Posted 6 May 2025
Foreign assets refers to the value of your foreign properties, investments and any other assets you own abroad at the end of the tax year.
Written by Alicia
Posted 6 May 2025
Local liabilites are the amounts you owe to banks, companies, businesses or people in South Africa.
Written by Alicia
Posted 6 May 2025
Local assets are all the assets you own in South Africa, such as local owned properties, vehicles, shares, loans you gave someone else, investments in the bank, crypto assets, total balance in your bank account at the end of the tax year and lastly the value of any business related equipment (this would only be relevant for people running a sole proprietorship).
Written by Alicia
Posted 6 May 2025
A tax directive is another word for an instruction issued by SARS to an employer or a fund telling them how much tax they should deduct from your income. Each tax directive has a special number (tax directive number) which links the lump sum you received to the tax that the company deducted.
Written by Nicci
Posted 6 May 2025
The CIPC stands for the Companies and Intellectual Property Commission in South Africa.
It is a government agency under the Department of Trade, Industry and Competition (DTIC), responsible for:
Company Registration:
Registering new companies (e.g. private, public, non-profit)
Maintenance of Company Records:
Written by Ursula
Posted 5 May 2025
Written by Nicci
Posted 5 May 2025
Written by Ursula
Posted 30 April 2025
Written by Nicci
Posted 30 April 2025
Net capital is the value of your business after subtracting what you owe (liabilities) from what you own (assets). It shows your business’s financial strength.
Example:
Let’s say you run a small clothing boutique in Cape Town. You have:
Written by Nicci
Posted 30 April 2025
Shares represent ownership in a company. When you buy shares, you become a shareholder — meaning you own a small part of that company. Companies issue shares to raise money, and in return, investors get a chance to benefit from the company’s growth and profits.
There are two main ways to make money from shares:
Written by Nicci
Posted 30 April 2025
A bond is essentially a loan you give to a company, a municipality, or the government. It is a type of investment. When you buy a bond, you are lending money—and in return, they pay you interest as income and promise to pay back the original amount (called the capital) at a fixed date in the future.
Important: an "investment bond" is not to be confused with a "mortgage bond", which you...
Written by Nicci
Posted 29 April 2025
A foreign dividend is a payment made by a foreign company to you because you own shares in the foreign company. It’s a way for the company to share its profits with you.
In most cases, if a taxpayer holds less than 10% of the shares and voting rights in a foreign company, the foreign dividend received is taxable. The full amount must be declared in the tax return, but SARS allows a partial exemption, meani...
