If you're not sure of what turnover tax is, don't worry. The Practical Tax Loose Leaf Service has got you covered.
Here's what you need to know about turnover tax
Turnover tax is an alternative tax system for small and micro-businesses.
According to the Loose Leaf Service, before the introduction of turnover tax, all businesses, even tiny start-ups were forced to register for Income Tax. They battled to meet the tax requirements, completing all the forms, paying over all the taxes and meeting all the deadlines. They also had to juggle Vat, Provisional Tax, Income Tax and Capital Gains Tax (CGT).
But turnover tax has removed this burden and replaced all of these taxes with one simple tax!
And that means there's no need to waste time and money paying Vat, Provisional Tax, Income Tax and Capital Gains Tax if your company makes less than R1 million each year.
How do you apply for turnover tax?
You must complete the TT01 form and send it to SARS.
The first time you complete this form, you must complete a questionnaire on the first page of the form. If you answer 'No' to any of the questions, SARS won't accept your application.
How to pay turnover tax
You'll pay your turnover tax to SARS in two payments:
Period #1: For the first six months (March to August) of the year, you'll pay 50% of your estimated annual liability by the end of August each year.
Period #2: For the last six months (August to February), you'll pay the difference by the end of February.
To make a payment, complete the TT02 form available on the SARS website.
If you need more information regarding turnover tax, you'll find it here.
Well there you have it. There's no need to waste time and money paying VAT, Provisional Tax, Income Tax and Capital Gain tax.
Recommended Product: The Ultimate Turnover Tax Guide. Find out how to pay less tax with turnover tax.