Small businesses that wish to register their business will benefit hugely from business tax services, which assist in all areas of business tax, including registration of Small Business Corporation. Your accountant or business tax services consultant will be able to register on your behalf, and assist with all requirements that may be needed. Companies that meet all of the following requirements will be able to qualify as a Small Business Corporation:
- All shareholders or members are natural persons.
- All shareholders hold no shares in any other private company.
- All members hold no members’ interest in any other Close Corporation.
- Gross income for the year of assessment does not exceed R14 million.
- Not more than 20% of the gross income and all the capital gains consist collectively of investment income and income rendering a personal service.
- Investment Income includes any annuity, rental income, royalty or any income from investment or trading in financial instruments, marketable securities or immovable property.
- Personal Service includes any service in the field of accounting, actuarial science, architecture, auctioneering, auditing, broadcasting, consulting, draughtsmanship, education, engineering, financial service broking, health, information technology, journalism, law, management, real estate broking, research, sport, surveying, translation, valuation or veterinary science, which is performed personally by any person who holds an interest in the company or Close Corporation, except where such small business corporation employs three or more unconnected full-time employees for core operations.
Small Business Corporation Benefits
Business tax services offer the most effective way to register as a Small Business Corporation. The benefits that can be enjoyed from a tax point of view include the following:
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- For the year ending 31 March 2011:
- Taxable Income less than R57 000 attracts NIL tax
- Taxable Income greater than R57 001 up to R300 000 attracts 10% tax
- Taxable Income greater than R300 001 attracts 28% tax (+R2 4300)
- For the year ending 31 March 2012:
- Taxable Income less than R59 750 attracts NIL tax
- Taxable Income greater than R59 751 up to R300 000 attracts 10% tax
- Taxable Income greater than R300 001 attracts 28% tax (+R24 025)
- Investment Incentive:
- The full cost of any asset used in a process of manufacture and brought into use for the first time on or after 1 April 2001, may be deducted in the tax year in which the asset is brought into use. As from 1 April 2005, all other depreciable assets are written off on a 50:30:20 bases.
- For the year ending 31 March 2011:
To register as a Small Business Corporation, contact PATC today for further business tax services advice relating to small business taxes.
