ARC90

VAT registration is mandatory or voluntary based on the value of your taxable supplies:

1. Mandatory Registration:

You must register your business for VAT if the total value of your taxable goods or services is more than R1 million in any consecutive 12-month period.

You must also register if there are reasonable grounds to expect that your taxable supplies will exceed R1 million in a 12-month period, especially under a written contract.

If you meet the R1 million threshold, you must submit the registration form to the South African Revenue Service (SARS) within 21 days from the date of exceeding that amount.

2. Voluntary Registration:

You may choose to register voluntarily even if your turnover is below R1 million, provided your income from taxable supplies in the past 12-month period exceeded R50,000.

Certain other conditions for voluntary registration may apply, such as if you carry on an enterprise that is expected to result in taxable supplies in excess of R50,000 within a 12-month period, or if you acquire a business as a going concern that previously met the R50,000 threshold.

Depending on your service offering, it may also be beneficial to voluntarily register for VAT.

Reach out to us to assist you along the way.

CGT is a tax on the profit you make when you sell, donate, or otherwise dispose of an asset for more than its initial cost (known as the "base cost").

How is CGT calculated?

Only a portion of your total capital gain is added to your taxable income. This portion is called the Inclusion Rate:

Individuals: 40% of the net capital gain is included in taxable income.

Companies & Trusts: 80% of the net capital gain is included in taxable income.

This included amount is then taxed at your applicable marginal income tax rate.

Are there any exemptions or exclusions?

Yes, the following are the most common exclusions for individuals:

Annual Exclusion: The first R40,000 of your net capital gains each year is excluded.

Primary Residence Exclusion: Up to R2 million of the capital gain on the sale of your main home is excluded.

Personal Use Assets: Assets used primarily for personal use, such as your car, furniture, and certain personal effects, are exempt.

The calculations can get complicated very quickly. Our team of experts would be happy to assist you with all the different intricacies.

For a business in South Africa, the choice of accounting framework is primarily between IFRS (International Financial Reporting Standards) and IFRS for SMEs (IFRS for Small and Medium-sized Entities).

The key is that SA GAAP (South African Generally Accepted Accounting Practice) has been withdrawn and is no longer the main reporting framework.

US GAAP (United States GAAP) is only relevant if you are a US company or are looking to list on a US exchange. Therefore, this framework is generally not applicable, unless you have a specific international link to the US.

Whether your business in South Africa is required to be audited depends on a few specific factors, primarily its Public Interest Score (PI Score) and its corporate structure.

Other Factors That Always Require an Audit:

Even if your PI Score is low, an audit is always mandatory if your business is:

- A Public Company (Ltd), whether listed or unlisted.

- A State-Owned Company (SOC).

- Required by your Memorandum of Incorporation (MOI) or a shareholder agreement.

- A company that holds assets in a fiduciary capacity for non-related persons, exceeding R5 million.

We will gladly assist with the finer details should you require an audit, as the above is only a guideline.