Our clients regularly have questions about accounting, tax, VAT and company registration matters. For your convenience we have listed the answers to the questions we hear most frequently below.
The questions we get asked are usually relating to a specific (and personal) set of circumstances. Due to our respect for confidentiality, we have not included such questions here. Hence, you will find the questions and answers to be of a general nature.
If you have a specific question that is not listed here, please use the form to send us your question. We will do our utmost to provide you with an answer.
A company must register for Income Tax, whether it is trading or not.
Registration for VAT is compulsory if turnover exceeds R 1 Million per annum, but you can also do a voluntary registration when turnover is at least R 50,000 and it is in the best interest of the company to do so (for example when you are an exporter in order to claim input VAT).
A company must register as an employer when it employs permanent staff or contractors and needs to deduct PAYE and UIF from their earnings.
Customs duty when it is importing and/or exporting goods or services.
It is not a statutory requirement to issue share certificates for a private company, and these are not formally recorded with CIPC, however when there are 2 or more shareholders it is good governance to properly reflect the ownership of the company through the issue of share certificates. These are recorded in the company share register and signed by a Board representative.
The Company annual tax return, IT14, has to be submitted within 12 months following the end of the company financial year end;
If your company turnover is < R 10Million per annum in terms of the most recent audited financial statements or independent review, the company qualifies as a Exempt Micro Enterprise (EME) and depending on black shareholding you qualify as a level 1, 2, 3 or 4.
Although in terms of the new Companies Act of 2008 one can no longer register a legal entity as a close corporation, you can continue to trade as a close corporation with no changes as those that applied under the old Companies Act.
There are however certain other factors that can be taken into account when making this decision such as:
SARS imposes a 10% penalty if your return submission misses the deadline by only 1 day, and interest is charged by SARS @ prime rate on overdue payments.
This varies and is very much dependent on your ability to respond properly and fully with the submission of supporting documentation and other information that SARS requires to determine whether your VAT return was submitted correctly.
If this date falls over a weekend or public holiday you submit and pay the taxes on or before the Friday before the due date to avoid interest and penalties for late submission and payment.
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