Small Business Ordinance
by
Amanda Roothman on 2 December 2021
It's been said that when you support a small business, you are supporting a dream.
But... small business isn't for the faint of heart.
It's for the brave...
the patient...
and the persistent.
It's for the overcomer.
And we, small business owners, are overcomers. Our mindset is everything.
Take a minute to set your mind on the ordinance of Small Business in South-Africa.
Companies that meet all the following ordinance will be able to qualify as a Small Business Corporation:
- All the Shareholders of the Privately Owned Company (and all the members of the Close Corporation) are natural persons for the full year of assessment;
- All Shareholders hold no shares in any other Private Company or no membership in any other Close Corporation (other than dormant companies) for the full year of assessment;
- The Turnover for the year of assessment does not exceed R 20 million;
- Not more than 20% of the gross income an all capital gains consist of investment income and income from rendering a personal service
- Investment Income includes any annuity, interest, rental income from immovable property, royalty income, local and foreign dividends from investment or trading in financial instruments or immovable property.
- Personal service includes any service in the field of accounting, actuarial science, architecture, auctioneering, auditing, broadcasting, consulting, draughtsmanship, education, engineering, financial service broking, health, information technology, journalism, law, management, real estate broking, research
performed personally by any person who holds an interest in the company
except where such small business corporation employs three or more unconnected full-time employees for core operations throughout the year of assessment.
- The company is not a personal service provider or venture capital company.
Rates of Income Tax for Small Business Corporations:
Year of Assessment ending on any date between 1 April 2021 and 31 March 2022:
| Taxable Income (Rands) | Rate of Tax (Rands) |
|---|---|
| 1 - 87 300 | 0% of taxable income |
| 87 301 - 365 000 | 7% of taxable income above 87 300 |
| 365 001 - 550 000 | 19 439 + 21% of taxable income above 365 000 |
| 550 001 and above | 58 289 + 28% of the amount above 550 000 |
Get in touch with your favourite #TaxDivas to set you up.
Make your mindset a top business priority because the actions you take (or do not take) always stem from your thoughts.
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