Make sure you're aware of these six tax consequences if you're a PBO
In this article, we gave you four tax consequences for PBOs. Now we're going to give you six more tax consequences so you can comply.
#1: PBOs fall within the Unemployment Insurance Fund (UIF) net
There are two registrations required for UIF in you're a PBO:
#2: PBOs are exempt from Skills Development Levy (SDL)
PBOs are exempt from registering for SDL and this means you don't pay SDL as required by the Skills Development Levies Act.
#3: You must register with the Compensation for Occupational Injuries and Diseases Fund (COID)
The Practical Tax Loose Leaf Service says while COIID isn't tax, you mustn't overlook this registration.
Every employer is required to register with the COID Fund and PBOs aren't exempt from this requirement.
#4: Your PBO doesn't need to pay stamp duty
'A PBO is exempt from stamp duty where any instrument is executed by or on behalf of any PBO and if the duty would've been legally payable and borne by that PBO,' says the Loose Leaf Service.
#5: PBOs need not pay securities transfer tax (STT)
A PBO is exempt from STT when any security is transferred to a PBO and the STT would've been legally payable and borne by that PBO.
#6: A PBO is exempt from transfer duty but it's a conditional exemption
A PBO is exempt from transfer duty where it acquires immovable property. But, you must meet the following two requirements for the exemption to apply:
Now that you know all about the tax consequences for PBOs, make sure you comply to avoid penalties.