Turnover tax is one of a number of different tax types and some of which can be replaced with another. There are ways in which everyone can meet their tax obligations, either as an individual or a business of any kind that’s eligible for tax.
Microbusinesses in South Africa registers and charges for VAT (Value-Added Tax) provided that the good and services supplies made exceeds R50 000 but less than R1 million, however, now such small businesses can meet their tax obligations through a turnover tax.
What is a Turnover Tax?
Turnover Tax is an easy and uncomplicated system designed to help micro-businesses meet their tax obligations, and it replaces Income Tax, VAT, Provisional Tax, Capital Gains Tax, and Dividends Tax, provided that such a business meet the qualifying criteria of an annual turnover of R1 million or less.
[ht_message mstyle=”info” title=”” show_icon=”true” id=”” class=”” style=”” ]Even when the micro business is registered for turnover tax, it can still remain in the VAT system as of March 2012.[/ht_message]
When a tax rate is applied to the taxable turnover of the micro-business the process is known as the Turnover tax.
[ht_message mstyle=”info” title=” The table shows turnover Tax Rates for any year of assessment ending during the period of 12 months ending on 28 February 2018.” show_icon=”true” id=”” class=”” style=”” ]
|Turnover (R)||Rate of tax (R)|
|0 – 335 000||0%|
|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 qualifies for Turnover Tax
Any micro-business with an annual turnover of R1 million or less may qualify for Turnover Tax. Taxpayers include co-operatives, companies, close corporations, partnerships, and sole proprietors.
You can do an online Quick Test to see you qualify for a Turnover Tax
How to make payments
Turnover Tax has 3 types of payments
- The First (1st) Payment is made in the middle of the tax year (The Last Business Day of August) TT02 form
- The Second (2nd) Payment is made at the end of the tax year (The Last Business Day of February) TT02 form
- The Third (3rd) and Final Payment is after the annual turnover tax turn has been submitted and processed (it is in line with the submission of the annual income tax returns (Between 1 July and 31 January of the following year)) TT03 form
There aren’t a lot of records that need to be kept as per record-keeping requirements. The important records include records of all amount receives and of dividends declared and lastly a comprehensive list of each asset with a cost price of more than R10 000 at the end of the year of assessment and liabilities exceeding R10 000.
How to Register
In order to fully register for Turnover Tax you will need to:
- Visit the nearest branch and submit a completed TT01 form
- The TT01 forms (Manual and External)
- Dates of submission will be clarified
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