Turnover Tax

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 as follows for 1 April 2014 to 31 March 2015:
 
Turnover​ Marginal Rates for 2015
R0 - R150,000​ 0%​
R150,001 - R300,000​ 1% of each R1 above R150,000​
R300,001 - R500,000​ R1,500 + 2% of the amount above R300,000​
R500,001 - R750,000​ R5,500 + 4% of the amount above R500,000​
R750,001 and above​ R15,500 + 6% of the amount above R750,000​
 
Table 1: Turnover Tax Rates for 1 April 2014 to 31 March 2015

Tax Guide for Micro Businesses 2011/2012

Who is it for?

Micro businesses with an annual turnover of R 1 million or less. The following taxpayers may qualify:
  • Individuals (sole proprietors)
  • Partnerships
  • Close corporations
  • Companies
  • Co-operatives

How to register?

To register for Turnover Tax:

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:
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 Top FAQs

What is turnover tax?
Turnover Tax is a separate tax regime for micro businesses, that was designed to lower their administrative burden and with

What is taxable turnover for Turnover Tax purposes?
The taxable turnover for a registered micro business includes all the amounts (not capital) received by that business during a year of assessment from their business activities in South Africa,

How do I register for turnover tax?
By submitting to SARS a completed TT01 form (available from www.sars.gov.za). The registration application should be submitted before the beginning

Who can register for Turnover Tax?
Any individual or company whose qualifying turnover is less than R1 million for a year of assessment, may register for Turnover Tax.

How do I de-register from Turnover Tax?
You can deregister from Turnover Tax voluntarily by writing to the Commissioner expressing your wish to do so in a manner prescribed by the Commissioner.