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?
![trade-2 trade-2](https://sme.tax/wp-content/uploads/2019/01/trade-2-80x91.png)
You write off all assets bought for trade, in the year of purchase. ie 100% depreciation in
year 1.
![assets assets](https://sme.tax/wp-content/uploads/2019/01/assets-1-80x91.png)
You write off all assets bought for manufacture, over three years at 50/ 30/ 20
depreciation.
![sme.tax-services-tax-table SARS Tax Table](https://sme.tax/wp-content/uploads/2021/03/sme.tax-services-tax-table-1024x149.png)
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
![income-1-50x57 income-1-50x57](https://sme.tax/wp-content/uploads/2019/06/income-1-50x57.png)
Your business’ Gross Income* is R20 million or less in the year ending end Feb
![for-sale-sign-1-50x57 for-sale-sign-1-50x57](https://sme.tax/wp-content/uploads/2019/06/for-sale-sign-1-50x57.png)
Your business is not a Personal Service Provider*
![owner-1-50x57 owner-1-50x57](https://sme.tax/wp-content/uploads/2019/06/owner-1-50x57.png)
You and the other owners are people (not companies)
![shop-1-50x57 shop-1-50x57](https://sme.tax/wp-content/uploads/2019/06/shop-1-50x57.png)
You and the other owners are not involved in other companies
![prof.service-1-50x57 prof.service-1-50x57](https://sme.tax/wp-content/uploads/2019/06/prof.service-1-50x57.png)
Not more than 20% of the business income comes from Professional Services
![reg-1-50x57 reg-1-50x57](https://sme.tax/wp-content/uploads/2019/06/reg-1-50x57.png)
The business must be registered as a private company, co-op or a CC