- 25 February 2015 – Change in first tax band and the tax rates for micro businesses, as announced in the 2015 Budget Review
This year micro businesses will enjoy the benefit of reduced tax rates for Turnover Tax. The taxable turnover for a year of assessment from which tax becomes payable has been significantly increased from R150 001 to R335 001, so you can now earn more before you will be taxed. The maximum tax rate has also be halved. See the latest tax rates below. For more information on the changes announced in the Budget Speech, click here.
What is it?
Turnover tax is a simplified system aimed at making it easier for micro business to meet their tax obligations. The turnover tax system replaces Income Tax, VAT, Provisional Tax, Capital Gains Tax and Dividends Tax for micro businesses with a qualifying annual turnover of R 1 million or less. A micro business that is registered for turnover tax can, however, elect to remain in the VAT system (from 1 March 2012).
Turnover tax is worked out by applying a tax rate to the taxable turnover of a micro business. The rates are applicable for any year of assessment ending during the period of 12 months ending on 29 February 2016:
|0 - 335 000
|335 001 - 500 000
||1% of each R1 above 335 000|
|500 001 - 750 000
||1 650 + 2% of the amount above 500 000|
|750 001 and above
||6 650 + 3% of the amount above 750 000|
Who is it for?
Micro businesses with an annual turnover of R 1 million or less. The following taxpayers may qualify:
- Individuals (sole proprietors)
- Close corporations
How to register?
To register for Turnover Tax:
- Do a quick test to see if you quality for turnover tax:
- For more information on how to register
How to pay?
There are three payment dates:
- 1st payment is in the middle of the tax year on the last business day of August i.e. 29 August 2014 on the TT02 – Payment Advice for Turnover Tax
- 2nd payment is at the end of the tax year on the last business day of February i.e. 27 February 2015 on the TT02 – Payment Advice for Turnover Tax
- Final payment is after the annual TT03 - Turnover Tax Return is submitted and processed
What records should be kept?
A big advantage of turnover tax is the reduced record-keeping requirements. The following records must be kept:
1. Records of all amounts received;
2. Records of dividends declared;
3. A list of each asset with a cost price of more than R10,000 at the end of the year of assessment as well as of liabilities exceeding R10,000.
To take account of the typical expenses incurred by a micro business and to eliminate the need for detailed recordkeeping of deductible tax expenses, the turnover tax rates are significantly lower than the tax rates under the standard tax system.
The following will help you with your record keeping: