You write off all assets bought for manufacture, over three years at 50/ 30/ 20 depreciation.
Income Tax and my Small Business, what should I focus on?
Most importantly – ALL businesses are required to register for Income Tax with the South African Revenue Service (SARS) AND are required to submit an Income Tax return regardless of whether they make a profit or not!
Small Businesses are required to follow the same tax processes as medium or large businesses, however, small businesses can reduce their Income Tax if they qualify as a Small Business Corporation (SBC).
So…., I bet you’re wondering if the Income Tax savings are worth the trouble of finding out?
You write off all assets bought for trade, in the year of purchase. ie 100% depreciation in
year 1.
You write off all assets bought for manufacture, over three years at 50/ 30/ 20
depreciation.
And now that you see the savings are worth it, you’re probably wondering if your business qualifies as a SBC?
You must answer YES to ALL these questions to qualify
Your business’ Gross Income* is R20 million or less in the year ending end Feb
Your business is not a Personal Service Provider*
You and the other owners are people (not companies)
You and the other owners are not involved in other companies
Not more than 20% of the business income comes from Professional Services
The business must be registered as a private company, co-op or a CC