Corporate Tax & Small Businesses Tax

What’s New?

  • 13 April 2021 – CIT Audit lettersCorporate Income Tax (CIT) Audit Letters will now indicate actual dates for submission of relevant material. Failure to adhere to the stipulated deadlines may result in refunds being withheld or assessments being raised,

30 November 2020 – Corporate Income Tax (CIT) Filing season important changes for 2020/21

SARS is in the process of updating the systems, forms and processes pertaining to the filing of Income Tax returns for companies. These changes will be implemented in a phased approach throughout the 2020 /21 period


What is Corporate Income Tax?

Corporate Income Tax (CIT) is a tax imposed on companies resident in the Republic of South Africa i.e. incorporated under the laws of, or which are effectively managed in, the Republic, and which derive income from within or outside the Republic. Non-resident companies which operate through a branch or which have a permanent establishment within the Republic are subject to tax on all income from a source within the Republic.


Who is it for?

CIT is applicable (but not limited) to the following companies which are liable under the Income Tax Act, 1962 for the payment of tax on all income received by or accrued to them within a financial year:

  • Listed public companies
  • Unlisted public companies
  • Private Companies
  • Close Corporations
  • Co-operatives
  • Collective Investment Schemes
  • Small Business Corporation (s12E)
  • Body Corporates
  • Share Block Companies
  • Dormant Companies
  • Public Benefit Companies.

What steps must I take?

Register as taxpayer

Every business liable to taxation, under the Income Tax Act, 1962, is required to register with SARS as a taxpayer.  You can register once for all different tax types using the client information system.Note:For CIPC registered companies you are not required to perform a separate SARS tax registration for Income Tax, as your company will automatically be registered via a direct interface with CIPC.

Top Tip: You must make sure your business details are up to date before you submit your ITR14. So visit our keeping my business details up to date webpage to find out how to do this.

Submit annual tax return

For the year of assessment, the filing requirements are as follows:

  • Every company or other juristic person, which is a resident that:-
    • derived gross income of more than R1 000
    • held assets with a cost of more than R1 000 or had liabilities of more than R1 000 at any time during the 2018 year of assessment
    • derived any capital gain or capital loss of more than R1 000 from the disposal of an asset to which the Eight Schedule of the Income Tax Act applies, or
    • had taxable income, an assessed loss or an assessed capital loss must submit a return,

Returns can be submitted electronically via e-filing.

Submit provisional tax returns

In addition to annual returns, every company is required to submit provisional tax returns. The first of these returns is required to be submitted six months from the start of the year, and the second at year end, and must contain an estimate of the total taxable income earned or to be earned for that period. Payment of the tax must accompany the return. A third “top-up” payment may be made six months after year-end.


When should CIT be paid?

Provisional Tax

  • First payment – within six months from the beginning of the year of assessment
  • Second payment – on or before the last day of the year of assessment
  • Third payment – seven months after the year of assessment for taxpayers with February year-end and six months after year of assessment for all other cases.

Tax on Assessment
Payment of tax upon an assessment notice issued by SARS must be done within the period specified in such notice. Corporate Income Tax is payable at a rate of 28%.


How should CIT be paid?

Payments can be made using the following options:

  • Online Banking
  • Electronic funds transfer
  • Bank payments
  • eFiling
  • Swift payment method (applicable only to foreign payments).

Small Business Taxes

Small Business Taxes

Complying with your tax obligations as a small business has been made a lot easier over the past few years. Read below for more information:

  • If you are starting out and need to register as a company, you will have to contact the Company and Intellectual Property Commission (CIPC), formerly called CIPRO. Please note that Companies are first required to register with the (CIPC) offices before registering with SARS for an Income Tax reference number. Once a taxpayer registered with CIPC, SARS will automatically generate an Income Tax reference number. Taxpayer must then register on eFiling to transact electronically.
  • As a Small, Micro or Medium Enterprise (SMME), at some point or another you will be required to provide / confirm / share your Tax Clearance information with another entity. This could be to apply for a tender, new contract, good standing or in respect of Foreign Investment. 
     
  • Registering for Turnover Tax: Turnover tax is a simplified tax system for small businesses with a qualifying turnover of not more than R1 million per annum. It is a tax based on the taxable turnover of a business and is available to sole proprietors (individuals), partnerships, close corporations, companies and co-operatives. Turnover tax takes the place of VAT (in the instance that you have not decided to elect back into the VAT system), provisional tax, income tax, capital gains tax, secondary tax on companies (STC) and dividends tax. So qualifying businesses pay a single tax instead of various other taxes. It’s elective – so you choose whether to participate. For Tax Tables see below.
  • Registering your business for VAT
  • Registering for PAYEUIF and SDL.
  • In the case where you are already registered as a company and you meet certain qualifying requirements, you may register as a small business corporation (SBC) in order to get additional tax incentives. One of the incentives for SBCs is a reduced corporate tax rate. .

Click here to see reduced tax rates for small businesses:

Applicable Tax rates

SBC tax rates for financial years ending on any date between 1 April 2020 and 31 March 2021:

Also note that if you are an employer, you are required to apply to SARS for registration as an employer within 14 days after becoming an employer for purposes of paying employees’ tax which includes PAYE, SDL and UIF where applicable.    


You can also call the SARS Contact Centre on 0800 00 SARS (7277) for more information or assistance with a specific query.

View SARS current Companies tax rates below!

Note: View our downloads for small businesses at the end of this page.

IF YOU FAIL TO PLAN THEN YOU ARE PLANNING TO FAIL!


Companies, Trusts and Small Business Corporations (SBC)

Companies – no changes from last year

​Financial years ending on any date between​Rate of Tax
​1 April 2021 – 31 March 2022​28%
​​​​1 April 2020 – 31 March 2021​28%
​​​1 April 2019 – 31 March 2020​28%
​​1 April 2018 – 31 March 2019​28%
​1 April 2017 – 31 March 2018​28%
​1 April 2016 – 31 March 2017​​28%
​1 April 2015 – 31 March 2016​28%
​1 April 2014 – 31 March 2015​28%


Top Tip: 
Personal Service Providers are no longer taxed separately and are taxed as a company or as a Trust.

The following rates of tax apply for financial years ending on any date between 1 April 2011 – 31 March 2012 for:

​Type​Rate of tax
Personal service provider companies​​33%
​Foreign resident companies which earn income from a source in South Africa​33%

Trusts (other than special trusts) – no changes from last year

Year of assessment​Rate of Tax
​1 March 2021 – 28 February 2022​45%
​1 March 2020 – 28 February 2021​45%
​​​1 March 2019 – 29 February 2020​45%
​​1 March 2018 – 28 February 2019​45%
​1 March 2017 – 28 February 2018​45%
​​1 March 2016 – 28 February 2017​41%
​1 March 2015 – 29 February 2016​41%
​1 March 2014 – 28 February 201540%


Small Business Corporations (SBC) – See changes from last year

Financial years ending on any date between 1 April 2021 and 31 March 2022:

​Taxable Income (R)Rate of Tax (R)
1 – 87 300​0% of taxable income
​87 301 – 365 000​7% of taxable income above 87 300
​365 001 – 550 000​19 439 + 21% of taxable income above 365 000
​550 001 and above​58 289 + 28% of the amount above 550 000

Financial years ending on any date between 1 April 2020 and 31 March 2021:

​Taxable Income (R)Rate of Tax (R)
1 – 83 100​0% of taxable income
​83 101 – 365 000​7% of taxable income above 83 100
​365 001 – 550 000​19 733 + 21% of taxable income above 365 000
​550 001 and above​58 583 + 28% of the amount above 550 000

Financial years ending on any date between 1 April 2019 and 31 March 2020:

​Taxable Income (R)Rate of Tax (R)
0 – 79 000​​0% of taxable income
​79 001 – 365 000​7% of taxable income above 79 000
​365 001 – 550 000​20 020 + 21% of taxable income above 365 000
​550 001 and above​58 870 + 28% of the amount above 550 000

  
Financial years ending on any date between 1 April 2018 and 31 March 2019: 

Taxable Income (R)​Rate of Tax (R)​
0 – 78 150​​0% of taxable income
​78 151 – 365 000​7% of taxable income above 78 150
​365 001 – 550 000​20 080 + 21% of taxable income above 365 000
​550 001 and above​58 930 + 28% of the amount above 550 000

Financial years ending on any date between 1 April 2017 and 31 March 2018: 

Taxable income (R)​Rate of tax (R)
0 – 75 7500%
75 751 – 365 0007% of taxable income above 75 750
​365 001 – 550 00020 248 + 21% of taxable income above 365 000
​550 001 and above59 098 + 28% of taxable income above 550 000

Financial years ending on any date between 1 April 2016 and 31 March 2017: 

Taxable income (R)​Rate of tax (R)
0 – 75 0000%
​75 001 – 365 0007% of taxable income above 75 000
​365 001 – 550 00020 300 + 21% of taxable income above 365 000
​550 001 and above59 150 + 28% of taxable income above 550 000

Financial years ending on any date between 1 April 2015 and 31 March 2016:

Taxable income (R)​Rate of tax (R)
​0 – 73 650​0%
​73 651 – 365 000​7% of the amount above 73 650
​365 001 – 550 000​20 395 + 21% of the amount above 365 000
​550 001 and above​59 245 + 28% of the amount above 550 000

Financial years ending on any date between 1 April 2014 and 31 March 2015:

​Taxable income (R)​Rate of tax (R)
​0 – 70 700​0%
​70 701 – 365 000​7% of the amount above 70 700
​365 001 – 550 000​20 601 + 21% of the amount above 365 000
​550 001 and above​59 451 + 28% of the amount above 550 000

Attachments

File Description Date added File size Downloads
pdf Small-business-leaflet-ENG-2021 SARS Small Business Essential Tax Leaflet in English.
June 25, 2021 2:11 pm 299 KB 58
pdf Small-business-leaflet-Afrikaans-2021 SARS Small Business Essential Tax Leaflet in Afrikaans.
June 25, 2021 2:11 pm 305 KB 40
pdf Small-business-leaflet-IsiXhosa-2021 June 25, 2021 2:11 pm 311 KB 20
pdf Small-business-leaflet-Zulu-2021 SARS Small Business Essential Tax Leaflet in Zulu.
June 25, 2021 2:12 pm 312 KB 42
pdf 4. Budget-Tax-Guide-2021 Download SARS 2021 Budget Tax Guide.
June 25, 2021 2:12 pm 621 KB 39