SARS, Turnover Tax, and Donations: July Updates
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July Updates
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The 2021-2022 tax returns are open and ready to be filed to SARS.
Please send us all your documents as soon as possible if you would like us to file your return.
If you get an auto-assessment from SARS, please don’t just accept it. Read through and make sure you amend the submission before it is too late. Please remember that your auto assessment will not include all the deductions that you are entitled to. If you would like us to check your auto-assessment, please get in contact with us.
Also please remember that if your situation has changed during the tax year, and you are receiving additional income that SARS has not included in your tax return, then it is important that you include this in your tax return but amending your provisional auto assessment.
The tax season closes on the 24th of October for non-provisional income tax payers.
Turnover Tax: What You Need to Know
If you are registered as a company or sole proprietor in South Africa, you can choose to pay either standard small business income tax rates or elect for turnover tax.
Turnover tax is a simplified tax rate aimed at reducing administration for small businesses with an annual turnover of less than R1 million. If your turnover goes over R1 million, then you will need to register for VAT and pay tax on the standard tax rates.
You can be registered for turnover tax and also be registered for VAT (voluntary registration).
To make record keeping easier, the turnover tax system automatically estimates a company’s business expenses when calculating taxable income. This means businesses registered for turnover tax don’t need to track and report their tax-deductible expenses.
Donations To Public Benefit Organisations
Written by Roulon du Toit
A lot of South African taxpayers are unaware that they could reduce their taxable income if they made donations to Public Benefit Organisations.
When a South African resident makes a donation, it is important to realise that there are tax consequences which may lead to either an increased tax burden or tax relief.
First, it is important to note that donating may attract a Donations Tax liability. This is something that taxpayers are unaware of and can be quite costly. We will not be exploring this in this blog, but be aware that if you donate cash (or any other asset) there may donations tax, especially if the value exceeds R100 000. For example, if you purchase a car and then transfer ownership to your child it will likely attract Donations Tax.
In this blog entry we will focus on donations made to Public Benefit Organisations (PBOs) and the tax benefits that come with this. Following on from the above, note that donating to PBOs is exempt from any Donations Tax liabilities.
