TAX RATES: 28 FEBRUARY 2018 – COMPANIES

TAX RATES: 28 FEBRUARY 2018 – COMPANIES

COMPANIES

Normal Taxation Rate: 28%

COMBINED TAX RATE OF COMPANY

2018
Taxable Income 100.00
Less: Normal Tax 28.00
Available for distribution 72.00
Less:Dividend 72.00
Less:Dividends tax 14.40
Total tax 42.40
Combined rate 42.40%

Note: Assumes all profits are declared as a dividend. Dividend Tax is a liability of the shareholder, while the normal tax is a company liability.

SMALL BUSINESS CORPORATIONS

Year ending between 1 April 2017 and 31 March 2018

R0 – R75 750 0% of taxable income
R75 751 – R365 000 7% of taxable income over 75 751
R365 001 – R550 000 R20 248 + 21% of taxable income above R365 000
R550 001 and above R59 098 + 28% of taxable income above R550 000

A small business corporation is a close corporation or private company (other than a personal service provider) of which:

  • the entire shareholding or membership is held by natural persons for the entire year of assessment;
  • the gross income does not exceed R20 million during the year of assessment;
  • none of the members/shareholders, at any time during the year of assessment, held shares in any other company other than listed companies, collective investment schemes, body corporates, shareblock companies, certain associations of persons, friendly societies, less than 5% interests in cooperatives, venture capital company, shares in private companies that are inactive and have assets of less than R5 000 or have taken steps to liquidate, wind-up or deregister;
  • not more than 20% of the sum of gross income and capital gains consists of investment income and income from the provision of personal services;
  • if engaged in the provision of personal services, maintains at least three full-time employees (none of whom may be a shareholder or a connected person in relation to the shareholder) for core operations.