SMME Connect Issue 10 - February 2025
As a small, medium and micro enterprise (SMME), your contributions are integral to the nation’s economic growth and stability. The South African Revenue Service (SARS) wants to make it easier for you to fulfil your tax obligations. Thus, this newsletter aims to provide clear and certain information to help you remain tax compliant.
As we are all aware, SMMEs are required to register for tax and file tax returns, as well as make timely payments for all applicable tax types for which they are registered. Non-compliance with tax obligations will result in penalties. In the unlikely case of uncertainty, please go through the Small business essential guide.
- Provisional Tax
- Company Income Tax Returns
- Tax Compliance Status (TCS)
- Turnover Tax
- Updating your Contact Details
Provisional Tax
Provisional Tax Returns (IRP6) are required for individuals who and companies that earn other income in addition to their salaries. These returns must be submitted twice a year. The first submission is due six months into the tax year, and the second one at the end of the tax year. The Provisional Tax system allows taxpayers to distribute their tax liability over the year, reducing the impact of a large tax payment at year-end.
Paying Provisional Tax ensures compliance with tax laws and helps avoid penalties and interest from SARS for late or underpayment of Provisional Tax. In addition, managing tax liabilities through Provisional Tax payments will assist in financial planning and cash flow management for the upcoming year.
Channels to Submit IRP6
- eFiling (sarsefiling.co.za): the most efficient way to submit your tax return is through the SARS eFiling platform. You can log on to your account and follow the instructions to complete and submit your return online.
- SARS MobiApp: if you prefer to use a mobile device, download the SARS MobileApp, which is a user-friendly way to file your tax returns.
- Branch appointment eBooking: you can visit a SARS branch for help with completing and submitting your return. Please make an appointment online before you visit a branch.
The deadline for the second submission of IRP6 returns is 28 February for companies with a year-end of February. To avoid penalties, do not miss the deadline!
For more information, go to: Provisional Tax or How to work out amounts due for Provisional Tax
Company Income Tax Returns
Companies that are registered for Income Tax must submit their Income Tax returns (ITR14) annually. The ITR14 contains information about the company’s income, expenses, assets, liabilities, and tax calculations for the year of assessment. It must be completed and submitted online using the eFiling system, which is a secure and convenient way of managing your tax affairs. The ITR14 is due 12 months after the company’s financial year-end.
Top tips:
- Make sure that the company has a Registered Representative at SARS.
- Registered Representative can be registered or updated on eFiling or the SARS Online Query System (SOQS)
- Ensure that tax types are activated on eFiling.
- To access the return, ensure that you have submission rights on eFiling.
- Ensure that all relevant expense claims have clear and up-to-date supporting documents.
Importance of Filing the ITR14
SARS will impose penalties to deter non-compliance and ensure tax compliance. The amount of the penalty depends on the taxable income of the company and the number of months of non-compliance. The penalty ranges from R250 to at least R16 000 per month of non-compliance. However, if you have reasonable grounds, you may request for remission after filing all outstanding returns.
For more information, go to: Completing an ITR14
Digital Channels
Registering on eFiling makes the tax filing process easier and more efficient. Follow these steps to register:
- Visit eFiling to complete the registration form.
- Link your company profile—complete the activation process by following the instructions sent to your email.
- Log in to your eFiling account:
- Navigate to the ‘Organisations’ menu;
- Select ‘Register New’ and fill in your company details; and
- Submit the required documents as stipulated.
For more information, go to: Guide to Register for eFiling and Manage your User Profile
Scam Alert: Beware of the latest email scams claiming that SARS has issued a letter of demand that requires your attention and direct you to click on any link to view the letter. Please ignore and do not click on any links.
If in doubt, please send an email to [email protected]. See an example of the latest scam.
Tax Compliance Status (TCS)
Your TCS always reflects your ongoing tax behaviour. It significantly influences your business opportunities. To maintain favourable conditions, it is essential to avoid delays and ensure that you consistently comply with deadline. The steps below will assist you.
- Request a PIN via SMS or view it on your eFiling profile dashboard.
- Go to ‘My Compliance Profile’ and select the Tax Compliance Status Request option 2.
- Use the PIN to verify your compliance status online via SARS eFiling.
- You can also request your TCS PIN through the SARS Online Query System (SOQS).
- As a company director, you can authorise third parties to view your TCS using a TCS PIN.
The PIN provides you with a way to authorise any third party to view your TCS online via eFiling. Once you have provided the PIN to a third party, it will enable the relevant organisation or government department to view your current TCS online.
For more information, go to: Guide to the tax compliance status Functionality on eFiling
Turnover Tax
Government plays a significant role in helping grow small businesses through initiatives like Turnover Tax. This initiative replaces Income Tax, Value-Added-Tax, Provisional Tax, Capital Gains Tax, and Dividend Tax for micro businesses with a qualifying annual turnover of R1 million or less.
It is important to note that a taxpayer is taxed on turnover and not profit. The tax rate for taxable turnover ranges from 0% to 3%. Small businesses that wish to register must download and complete the Turnover Tax application form (TT01).
TT01 forms can be submitted at a SARS branch by booking an appointment online or via email to [email protected].
Register before the beginning of a year of assessment, which is 1 March, or within two months from the date of commencement of business activities.
Compliance with Turnover Tax
Turnover Tax returns (TT03) declarations must be submitted annually between 1 July and 31 January of the following year. There are three payments to be made as follows:
- First payment: 31 August on the TT02 – Payment Advice for Turnover Tax.
- Second payment: 28 February on the TT02.
- Final payment is after the annual TT03 has been submitted and processed.
SARS advises eligible businesses to register for Turnover Tax. This tax regime is intended to streamline tax compliance for small enterprises with an annual turnover of up to R1 million. It is imperative to adhere to registration deadlines, particularly the 28 February deadline, to ensure that businesses can take advantage of the simplified tax system for the entire fiscal year.
For more information, read: The Turnover Tax Guide and Turnover Tax Leaflet.
Updating your Contact Details
It is crucial that you keep your details, such as bank-account, physical address, email address, and cell phone number, updated at SARS. Accurate contact information ensures that you receive all necessary correspondence and updates regarding your tax status on time.
To update your personal information on SARS eFiling, follow these steps:
1. Log in to your sarsefiling.co.za profile on the SARS website.
2. Navigate to the ‘SARS Registered Details’ section.
3. Select ‘Maintain SARS Registered Details’.
4. Choose the type of detail you wish to update, such as address, contact numbers, or email address.
5. Enter the new information and submit the changes.
Ensuring that your contact details are current helps prevent any interruption in communication, which is essential for timely tax filings and responses to SARS queries, and helps you organise your tax history and stay compliant.
Change in Security Contact Details
The ‘Forgot Username or Password’ function will trigger a one-time password to your security contact details on the system.
To check that SARS still has your correct email address and cell number, log in to sarsefiling.co.za and click on ‘My Profile’ on the top-left hand side of the screen.
If one of the security details has changed, you can update it on the screen, but if both have changed, you will need to call the Contact Centre on 0800 00 7277 or visit a branch (remember to make an appointment first).
Updating your Security Contact Details on eFiling
Select ‘My Profile’ from the eFiling menu on the left and click on ‘Profile and Preference Setup’:
- Scroll to the Security Contact Details section.
- Insert your new email address and/or new cell number.
- Select your preferred method of communication.
- Click on Update & Save.
- On the pop-up screen that displays, select your preferred method of communication to receive the One-Time-Pin (OTP) number.
- After entering the correct OTP, a message will display confirming that your security contact details have been updated successfully.
For more information, go to the Small Business webpage.
Need help?
- The SARS YouTube channel – watch our helpful tutorial video on the SARS YouTube channel to provide detailed guidance on how to file.
- If you have no other choice but to visit a SARS branch, you must book your appointment online before your visit.
Useful Links
Tax incentives are effective tools to promote economic growth. Thus, we encourage you to learn more about the following incentive tools:
- Turnover Tax – aimed at micro businesses that have a turnover of R1 million and below. For more information, click here.
- Small Business Corporation – small businesses with an annual turnover of up to R20 million may qualify to pay Income Tax at a reduced rate. Click here for a guide that will help you make the right decision and see the qualifying criteria.
- Employment Tax Incentive – aimed at incentivising employers to hire young job seekers. Click here to see the qualifying criteria.
For more information, go to: The Small Business webpage.
