What Gross earnings/profit does the business have to earn before being laible for tax?
By Marc Sevitz · Updated
What is the tax threshold for a business? What Gross earnings/profit does the business have to earn before being laible for tax?
Can you provide more details about the business, however there is no threshold except for specific definitions of business and therefore 28%tax is due on every R1.
Its an events company. Does 4 events per year. Makes aprroximately 200k earnings, and very little profit. Barely breaks even.
What percentage tax is liable? and is it liable on the gross profit or gross earnings?
What percentage tax is liable? and is it liable on the gross profit or gross earnings?
Do you have more than 3 employees who are not related to the director in anyway?
I have no employees. I run the events all on my own.
Then unfortunately you will be subject to 28% tax on every rand of profit earned.
Ok, thnak you. You've been a great help.
If I had more than 3 employees, would that have made a difference?
If I had more than 3 employees, would that have made a difference?
Assuming your events company does not offer any services related to:
accounting, actuarial science, architecture, auctioneering, auditing, broadcasting, consulting, draftsmanship, education, engineering, financial service broking, health, information technology, journalism, law, management, real estate broking, research, sport, surveying, translation, valuation or veterinary science
then if you have 3 unconnected employees you would be allowed to be defined as a Small Business Corporation which would mean you would be subject to the tax as per the following schedule:
INCOME TAX: SMALL BUSINESS CORPORATIONS
Financial years ending on any date between 1 April 2015 and 31 March 2016
Taxable Income (R)
Rate of Tax (R)
0 – 73 650
0% of taxable income
73 651 – 365 000
7% of taxable income above 73 650
365 001 – 550 000
20 395 + 21% of taxable income above 365 000
550 001 and above
59 245 + 28% of the amount above 550 000
accounting, actuarial science, architecture, auctioneering, auditing, broadcasting, consulting, draftsmanship, education, engineering, financial service broking, health, information technology, journalism, law, management, real estate broking, research, sport, surveying, translation, valuation or veterinary science
then if you have 3 unconnected employees you would be allowed to be defined as a Small Business Corporation which would mean you would be subject to the tax as per the following schedule:
INCOME TAX: SMALL BUSINESS CORPORATIONS
Financial years ending on any date between 1 April 2015 and 31 March 2016
Taxable Income (R)
Rate of Tax (R)
0 – 73 650
0% of taxable income
73 651 – 365 000
7% of taxable income above 73 650
365 001 – 550 000
20 395 + 21% of taxable income above 365 000
550 001 and above
59 245 + 28% of the amount above 550 000