Cidb Online Registration South Africa
Compliance with tax is one of the most important steps to ensure the smooth running and growth of any corporate company within South Africa. For almost each and every transaction in the republic, their requires a company to be tax compliant.
This is from the tendering process for government tenders, even up to applying for a bank loan from any of the financial institutions within the country. You can rest be assured that your tax compliance, will be put into scrutinization at each and every juncture. We given brief detail how to cidb online registration south africa. In South Africa, there are a number of different taxes that each business is required to be registered for. The South African Revenue Services, refers to these as tax types.
For businesses within South Africa, there are six major important different tax types and these are listed as follows below
- Company income tax
- Pay as you earn tax
- Skills development levy tax
- Unemployment insurance fund
- Value added tax
- Dividends withholding tax
I will be discussing each in a different paragraph, so that as a business owner, you can get to know which one affects your company and which one you should be registering for and at what stage of your business. Compliance with tax in the South African Business environment is very important for the purposes of compliance in the South African private and public sector. From construction Body like CIDB for cidb online registration south africa cidb registration, to regulatory Body.
How To Cidb Online Registration South Africa
I shall start off with the most important and the most compulsory tax type, which is
Income tax is compulsory for all business types, regardless of whether the entity generates income or not. In fact, a few years ago, it never used to be compulsory to register for income tax concurrently with a new company registration, however, as of late, the companies and intellectual property commission has now made it compulsory to automatically allocate and link an income tax number with each new company registration.
This leaves new company owners without an option but to declare an income tax return for each financial year, regardless of whether they have made an income or not.
If your company did not operate, nonetheless, in terms of the income tax laws, you must still declare this fact via the SARS EFILLING profile, otherwise, this will be considered, a non-compliance. The secondary type of tax that corporates must register for, is employee taxes. Unless if you are planning not to have any employees within your company, corporates must ensure that they register for employees’ tax. This is especially true, if you plan on employing any one for more than 48 hours during a week. Employee tax comes divided into 3 major categories, dependent on your employee organizational structure.
There is the skills development tax, which is compulsory for all corporates that will pay employee salaries in excess of R500, 000 annually. This tax must be registered otherwise, if the annual salaries of the combined employees exceed this figure and you don’t register and pay for this tax type, this will be seen as a non-compliance on the part of your company, which might lead to excessive penalties and interest back dated to the year from which compliance should have occurred.
Then there is also the unemployment insurance fund. This is the type of tax that normally puts South African corporates in hot waters with their employees. Usually, problems with employees arise when retrenchments occur. The first thing a retrenched employee does is to seek for compensation from the Unemployment Insurance Fund.
When employees discover that the company owner was not paying for the Unemployment Insurance Fund, this leads to civil litigations between the employer and employee. Usually, these matters manifest at the CCMA which normally culminates in court judgements being issued against the employer for lump sum payments to the employees.
A matter which could have been resolved amicably, had the employer complied with the tax requirements. Normally the UIF is a mere 2% of the employee’s salary, of which employer and employee each contribute 1%. Then, the other tax type in the corporate sector, in terms of employment, is the Pay as You Earn, tax. Any company owner who employs an employee above a certain threshold, which is currently set from R6,612 for the 2020 financial year, must pay tax according to PAYE tax tables.
These taxes, which are referred to as payroll taxes, must be registered for and compliance should occur in each and every month, in other words, company owners are expected to deduct taxes from their employees each and every month, and submit those to the South African Revenue Services.
The other type of tax that is very common and which we have all probably heard about, is the Value Added Tax. Value added tax is only applicable to corporates that generate annual revenue of more than R1 million. However, companies that also make more than R50,000 a year can also register for value added tax on a voluntary basis.
VAT is usually payable after every 2 months; however, monthly VAT payment is also possible for companies which generate higher monthly turnover according to SARS discretion. Value added tax must be paid on the net supply of goods or rather sales at a rate of 15%
The other less popular tax, that you are less likely to run into and normally because it is usually paid by companies on the Johannesburg stock exchange, is the dividends withholding tax. For this type of tax is very rare, and as a small to medium business owner and especially if your company is not listed on any stock exchange, I don’t think that this tax should be of major concern, and for this reason, I will not be discussing it here.
Now, if you are running a business, it is very important to employ the services of a good tax practitioner, who can give you proper advice, with regards to your business tax affairs. # cidb online registration south africa, cidb registration, cidb, tax
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