Here is the answer to complicated SARS Tax Queries

Whether you are an individual or company, SARS tax rules apply to almost every person or entity, with a few exceptions of course. And even though one might think because it applies to almost every individual and company, it would be easy to understand; but it isn’t. It is not always easy to be a South African citizen, especially when it comes to SARS tax.

Sometimes it is even difficult to know PAYE from VAT, which is why SARS has developed a Tax Pocket Guide. This guide enables you to understand your tax liabilities the simplest, easiest way. Here is a synopsis of some of the tax types included in the 2010 SARS Tax Pocket Guide.

  1. Income Tax: Individuals and Trusts (Year of assessment ending 28 February 2010)

1.1 Taxable Income (R) Rate of Tax (R)

R 0 – R132 000 = 18% of each R1

R132 001 – R210 000 = R23 760 + 25% of the amount above R132 000

R210 001 – R290 000 = R43 260 + 30% of the amount above R210 000

R290 001 – R410 000 = R67 260 + 35% of the amount above R290 000

R410 001 – R525 000 = R109 260 + 38% of the amount above R410 000

R525 001 and above = R152 960 + 40% of the amount above R525 000

1.2 Tax Rebates

Primary R9 756

Additional (Persons 65 and older) R5 400

1.3 Tax Thresholds

Below age 65: R54 200

Age 65 and over: R84 200

1.4 Trusts other than special trusts

Rate of Tax – 40%

  1. Provisional Tax

You are a provisional taxpayer if you earn income other than remuneration or allowance or advance payable by your principal. The following people are exempt from paying provisional tax:

Individuals younger than 65 who do not carry on a business and whose taxable income will not exceed the tax threshold for the particular tax year or whose income from interest, dividends and rental will be less than R20 000 or less for the specific tax year.

Individuals equal to or older than 65 years of age and their taxable income consists exclusively of remuneration, interest, dividends or rent from the lease of a fixed property and is less than R120 000 for the tax year.

  1. Income Tax: Companies (Financial years ending on dates between 1 April 2009 and 31 March 2010)

Type Rate of Tax

Companies: 28%

Personal service provider companies: 33%

Foreign resident companies which earn income from a source in South Africa: 33%

  1. INCOME TAX: SMALL BUSINESS CORPORATIONS (Financial years ending on dates between 1 April 2009 and 31 March 2010)

Taxable Income (R) Rate of Tax (R)

R0 – R54 200: 0%

R54 201 – R300 000: 10% of the amount above R54 200

R300 001 and above: R24 580 + 28% of the amount above R300 000

  1. TURNOVER TAX FOR MICRO BUSINESSES (Financial year ending on 28 February 2010)

Taxable turnover (R) Rate of tax (R)

R0 – R100 000:0%

R100 001 – R300 000: 1% of the amount above R100 000

R300 001 – R500 000: R2 000 + 3% of the amount above R300 000

R500 001 – R750 000: R8 000 + 5% of the amount above R500 000

R750 001 and above: R20 500 + 7% of the amount above R750 000

  1. Fringe Benefits

Employer-owned vehicles

The taxable value is 2.5% of the determined value (the vehicle’s cash cost excluding VAT) per month. If a second vehicle is made available to an employee or family and it is not primarily used for business purposes, the benefit is 2.5% per month on the vehicle with the highest value and 4% per month on the other vehicle.

If the employee carries all cost of the fuel used for private use of the vehicle (including travelling between his or her place of residence and employer’s address) the monthly percentage to be applied is reduced by 0.22 percentage points.

If the employee carries the full cost of the vehicle maintenance including repairs, servicing, tyres etc., the monthly percentage applicable is reduced by 0.18 percentage points.

For other SARS tax queries that aren’t mentioned in this article please contact us.

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