A trust must register with SARS for the taxes that it may be liable for.
How to register for the following taxes
- Income Tax – Registration for Trusts must be completed at a Branch with the relevant supporting documents. Once a trust is registered for Income Tax, the trustee will be required to annually submit an Income Tax Return for the Trust.
- Provisional Tax – The trust must apply for registration within 21 business days of becoming liable for Provisional Tax.
- Payroll Taxes –
- Employees’ Tax [Pay-As-You-Earn (PAYE)] –The trust must apply for registration as an employer within 21 business days of becoming an employer.
- Skills Development Levy (SDL) – Payable at 1% of the total amount paid in salaries to employees (including overtime payments, leave pay, bonuses, commissions and lump sum payments).
- Unemployment Insurance Fund (UIF) – Payable at 1% of remuneration paid or payable during the month.
- Value-Added Tax (VAT) – The trust must register if an enterprise has taxable supplies, goods or services subject to VAT – in excess of R1 million in any consecutive 12 month period. A trust making taxable supplies of less than R1 million may voluntarily apply to register for VAT.
A trust may also be liable for the following taxes:
- Donations Tax – Donations tax is levied at a flat rate of 20% on the cumulative value of property donated not exceeding R30 million, and at a rate of 25% on the cumulative value exceeding R30 million (sections 54 to 64 of the Income Tax Act, 1962).
- Transfer Duty – Payable on a sliding scale based on the value of the property transferred.
- Securities Transfer Tax (STT) – Levied on the transfer of a security at 0,25% of the taxable amount of the security.
Top Tip: A trust may be eligible to register as a Tax Exempt Organisation if certain requirements are met. Refer to Section 10(1)(nC) and Section 30 of the ITA.