• SABC shenanigans

    SA has already embarked on a slippery slope to autocracy, warns Terry Bell in Inside Labour.

  • Zim tastes people power

    Protests in Zimbabwe are forcing Mugabe to face anti-government sentiment, says Memory Mataranyika.

  • Platinum handshake

    Officials who try to do what's right risk far more than blessed wrongdoers, says Solly Moeng.

All data is delayed
See More

Small business tax query

Feb 11 2013 15:48
A Fin24 user seeks tax help for his small business. He writes:

What is the procedure required to register a small business as a "Small Business Corporation" with the South African Revenue Service (Sars)?

Business consultant Tienie le Roux responds:

All businesses must be registered with the taxman and should your business meet the requirements of Sars and of the Income Tax Act, Sars will calculate its tax in terms of Section 12 E as a small business corporation (SBC).

However, these concessions are only for close corporations and private companies.

Take note that SBCs are not the same as small, medium and micro enterprises (SMMEs). SBCs are defined in the Income Tax Act which also governs this type of business, while the National Small Enterprises Act governs SMMEs.

We suggest that you as the business owner write a letter to Sars stating that you qualify due to the following criteria being met, and that the business is either a closed corporation or a private company:
• All shareholders and/or members during the financial year are natural people who hold no shares in any other private companies or closed corporations;
• Gross income of the business does not exceed R14m;
• Not more than 20% of the gross income is from investment income or from rendering a personal service, like accountancy, legal advice, architectural services, and so on.
Or you could also, when capturing the information on the income tax return on the second page, tick the block that asks if the entity is a small business corporation. Then fill in the turnover.

Sars may request additional information if necessary; it should then assess you on the SBCs tax tables.

 - Fin24

*Share your experience of setting up your own business, or simply ask a question. Our business panel can put you on the right path. 

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

tax  |  entrepreneurs  |  smes


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Saving can make a lot of things possible, but we all know how hard it is to save. This special Savings Issue will help you get focused.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Sarb's decision to keep the repo rate unchanged is:

Previous results · Suggest a vote