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If you register a PTY you and your business are separate legal entities. This means you will have to submit separate annual income tax for yourself and your business. Each submission will have its own unique reference number. Below are the SARS requirements for your business
This includes income obtained from outside your employer. In the case of a sole proprietor you are requested to pay tax semi-annually. The periods for provisional tax are February till August and September till February. Thereafter tax liability is calculated and credited to your tax account. Depending on the calculation it may result in overpayment therefore SARS will refund you or a shortfall which you will need to pay into SARS by specified date.
Income Tax for businesses
Compulsory SARS tax registration and should be done within 30 days after company is registered.
The first R150 000 of taxable turnover of all businesses registered for turnover tax will be free of tax. A business is currently not allowed to register for both VAT and the turnover tax.
PAYE(Pay as you earn)
If you have staff employed PAYE tax is deducted on a monthly basis. As a business will have to register for PAYE, UIF and SDL. Independent contractors that earn more than 80% of their salary from your company will need to be taxed as employees.
If your company has a turn of over 1 million annually you will qualify for Vat. When you qualify you will need to notify SARS and register for VAT. As companies you will be able to claim VAT this however, means the company will have to also pay VAT. The VAT process has deadlines that you will need to comply with and if you fail to do so there will be penalties. Ensuring all invoices have correct company details on will result in them being accepted by SARS. If you are not registered for vat it should be stated on your invoices.
The process of SARS registration can be complex and if you do not comply with these requirements your business will pay heavy penalties. Visit Us to find out more information and costs involved.