Here's when you should register for income tax
While income tax applies to individuals as well, for the purposes of this article we'll focus on companies and Trusts.
As a company, you must register for income tax
as soon as your registration with the Companies and Intellectual Property Commission (CIPC) is complete and you have a business registration number.
But if you trade as a Sole Proprietor
, you must register as an individual taxpayer if you're not already registered, says myfinance-online.co.za
As a Trust, you must register for income tax as soon as you successfully register your Trust with the Master of the High Court and have a registration number.
To register for income tax, complete an IT77c or an IT77TR for a Trust and submit to SARS. You can get the forms at a SARS branch or from the SARS Contact Centre.
On its website, SARS explains that once you complete the form, you must visit your nearest SARS branch to hand it in with your supporting documents.
After SARS registers you and gives you a tax number, you can register for eFiling. This way, you can submit your returns easily and interact with SARS.
Now that you know when to register for income tax, keep these two points in mind...
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Remember these two points when it comes to income tax registration
1. Income tax registration isn't the same as Vat registration
Some taxpayers often confuse the two. But these are two different tax types, says myfinance-online.co.za.
Income tax registration is compulsory. You must meet certain requirements to register for Vat.
2. After SARS registers you for income tax, you become a provisional taxpayer
(You can find more information about provisional tax on Provisional Tax 101.)
This means you must submit provisional tax returns twice a year. And your income tax returns annually.
Now that you know when to register for income tax, comply so you can avoid penalties or jail time.
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