Tax can be daunting and stressful, whether it’s personal tax or business tax. What is company tax you may ask? No, it is not the same as your personal tax. Where personal income tax refers to the normal tax that is paid on your own personal monthly income alongside your UIF payment, Corporate Income Tax or Business Tax is imposed on businesses incorporated under the laws of the Republic of South Africa
According to SARS, company tax is applicable to a number of different businesses such as:
- Listed public companies
- Unlisted public companies
- Private companies
- Close Corporations
- Collective Investment Services
- Small Business Corporations
- Body Corporates
- Share Block Companies
- Dormant Companies
- Public Benefit Companies
As with any payments or expenses, it is imperative that your corporate income tax or business tax return is paid, should you miss the deadline for the tax return you may become liable for costly penalties and so it is vital that you fully understand what is required and endeavour to ensure that your company or businesses tax return is paid although there really is no excuse… SARS provide a number of ways to pay your taxes, the easiest and most effective being SARS eFiling.
SARS eFiling is an online payment method that requires you register online to begin the tax payment process. SARS eFiling is a free service for eFiling tax returns which allows tax payers, businesses and tax practitioners to submit tax returns, make tax payments and perform a variety of other interactions with SARS on a secure online platform and environment. Having said this, there are a variety of payment channels and methods that can be utilised to ensure your corporate income tax is paid and up-to-date, from online banking, electronic transfer funds, and bank payments through to cheque payments.
The process of tax payments can be a confusing process should you misunderstand what is required of you. According to SARS there are a number of steps to take in order to ensure a successful payments.
- Register as a taxpayer if you haven’t already
- Submit your annual tax return
As stated by SARS “Every registered tax payer is required to submit a return of income 12 months after the end of the financial year.”
- Submit your provisional tax return
As stated by SARS “In addition to annual returns, every business is required to submit provisional returns every 6 months and should contain estimated figures of total revenue earned for that period and to pay over taxes in respect of the income estimated for that period.”
When must I pay Corporate Income Tax?
- The first payment must be made within six months from the beginning of the year of assessment
- The second payment must be made on or before the last day of the year of assessment
- The third payment must be made seven months after the year of assessment for taxpayers with February year-end and six months after year of assessment for all other cases.
Tax on Assessment
If you have an assessment notice issued by SARS, payment of tax must be done within the period specified in the notice.
We at DATC realise that company tax returns can be a daunting situation, so be sure to contact us for any of your tax return concerns.