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Qualify for better tax rates as a Small Business Corporation...

by , 12 May 2015
Many businesses aren't aware that they might comply with the Small Business Corporation (SBC) status.

If you do, and you apply to be an SBC, you'll pay lower tax rates on your taxable income.

But what is criteria to meet and how do you register as an SBC with SARS?

Read on to find out...


There's nothing better than getting money back from SARS...
But do you know whether you can claim for:
- The cost of new laptops for your business?
- 5% of building costs?
- Stolen assets?
- Gifts you give your clients to say thank you for their business?

For 47 allowances and deductions you can legally take advantage of now, click here...

Can anyone register as an SBC?

If your business is a registered close corporations or private company, you can register as a SBC.

Your business must meet the requirements of a SBC and SARS will calculate the tax in terms of Section 12E of the Tax Administration Act. This means you get a better tax relief.

If you meet the following requirements you qualify for the SBC status
  • All members/shareholders during the financial year are natural people who hold no shares in any other private companies or closed corporations;
  • The gross income of the business doesn't exceed R14 million; and
  • Not more than 20% of the gross income is from investment income or a personal service income, like legal advice, financial advice, bookkeeping services etc.
And that's all.
There's really no difficult way to register. Simply tick YES: I am an SBC when you do your next income tax return.
And benefit from the tax relief…

139 reasons why SARS doesn't want you to see this

Do you know:
- What R5,000 can do to boost your annual deductions, and how to maximise its effect
- The ONLY way you'll NEVER pay donations tax
- Use your company car in these three ways and you WON'T pay tax
- The 27 capital allowances for your business

To find out how, click here…

An SBC will pay lower tax on its taxable income due to its favourable tax rates
Here's what you're looking at paying in taxes on your SBC:
  • Zero tax on a net profit which is between R0 and R73 650;
  • 7% tax between R73 651 and R 365 000 net profit;
  • If the nett profit is above R365 000 and less the R550 000 you'll pay R20 395 – about 21 % of the amount above R365 000 net profit; and
  • If the net profit is above R550 000 you'll pay R59 245 tax plus 28% of the amount above R550 000.
And, if your company's into manufacturing, you'll also qualify for an allowance on manufacturing machines.

So let's say your SBC buys a machine for R150 000 during the 2015 financial year. 

You'll get a tax deduction of R150 000 in the first year you buy the machine. That's a 100% deduction!

And after 1 April 2015, you now have the choice to write off any non-manufacturing assets either:
  • At the rate of 50% of the cost of the asset in the tax year in you first brought it; 
  • 30% in the first succeeding year; 
  • 20% in the second succeeding year.
There you have it. If you're not already registered as an SBC, take advantage of the added tax benefits today.

P.S. For quick solutions for busy tax payers, simply follow this link… 

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