Importance of Filing Income Tax Return for Businesses

In the game of life, your success is measured in numbers; the numbers in your bank account and your annual earnings reflected in your income tax return. These numbers can either open doors, creating opportunities for development and growth or close doors.

Business owners will find opportunity knocking more frequently, by filing their annual income tax return. The filing of your income tax return is not only for the purpose of declaring your earnings to SARS and paying taxes owing, but it allows you to avail of other benefits, that can be beneficial for you in the short and long-term future.

Let’s look at the benefits of filing your income tax return as a business.

What is Corporate Income Tax?

Corporate Income Tax (CIT), also known as a business tax, is a tax imposed on businesses incorporated under the laws of the Republic of South Africa and which derive income from within the Republic or through a branch or permanent establishment within the Republic.

Who Is It For?

CIT is applicable (but not limited) to the following businesses 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

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

  • Submit annual tax return
  • Submit provisional tax returns

Top Tip: When submitting your return you will need to give the SIC code for your business. To find out your relevant code please click here.

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
  • e-filing
  • By cheque, limited to payments of R500 000 or less (all cheques to be made out to the South African Revenue Service and marked not transferable)
  • Swift payment method (applicable only to foreign payments).

Need more info on business tax? Contact us today to schedule a consultation on 079 660 6457 or info@finflowaa.co.za.

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