Excellent Video Boet. Moment of silence for all Employees who came here thinking they could get more from SARS. Start a business guys.... its hard work but worth it.
There is good info here. Something to include though: > when qualifiying for SBC the business is now required to employee at least 3 people (among other things) > these 3 people cannot be owners/shareholders. > the moment you register another business in your name you are disqualified from SBC See section 12E of the Tax Act. This is essentially a type of tax.
i am a 21yr old engineering student graduating in 2yrs. one thing i’ve learnt through wealthy people is how they are able to manoeuvre their away around paying taxes. where can i learn about South African taxes? (other than your youtube videos of course) what makes avoiding taxes legally so difficult? where can i go to learn about taxes the hard way by myself? id like to prepare for the future
Thank you for this. It's a big pain point for me that we South Africans struggle to find good, free education on taxes that isn't full of hard-to-understand jargon. Nobody helps us to save our hard-earned profits either, which SARS reaps with abandon. Again, thank you. This was great advice.
Turnover Tax can be expensive for a business with low margins. If you make R990 000 and your expenses are R920 000, for example, you'll be better off on the income tax system. Another problem is that the threshold has been R1m for more than a decade, so inflation will eventually push you out of the system.
@@intelimagic "Turnover Tax" was introduced to regularise small traders. It is only effective for small sole proprietors, it excludes certain professions and is not really not a 'tax trick' to be used by others.
Turnover tax is awesome in circumstances where taxpayers who for e.g. operate as sole proprietors and whose business is more service-related like for eg an artist, photographer, service providers not excluded, where costs to operate are lower. My clients who are registered for TT are paying as little as R11k on R900k income per annum. You just can't beat these tax rates, but obviously the circumstances have to be right. The drawback in my experience is it is still quite a manual process to get registered and file returns. Assessments take a while too.
I feel sorry for your clients - that's because turnover tax is loaded in SARS favour....it should instead be based on net PROFIT, not turnover [ that's if you believe in handing your hard earned money over to a corrupt entity like govt anyway ].......simple maths tells you a % of turnover is often a higher figure than the actual profit at the end of the day, which means the business owner is losing.
5:00 if you own the Pty the effective tax you pay can be more than 45% if the company pays you a high salary, and the company pays income tax on the taxable income. Tax has too many permutation. Whatever choice you make you win some benefit and lose some benefit 😊
Please get professional advice. For example, an SBC is not a type of company. It is a tax regime and should not be compared like this. A pty can be an SBC. A rudimentary understanding of tax structures will get you into trouble quick!
Finally some good information about tax! Andre, my partner wants to join my Pty business at the end of the year. What would be a good plan for us both to save on tax? Must she become a director? or is it more beneficial for her to register a tax turnover business? Thanks in advance.. going to soak up all the content!
Yes yes and yes. Crypto isn't a safe haven anymore. SARS and all other revenue services have access or should I say work with every crypto exchanges. Just pay tax and be safe
So how does Turnover Tax Work then? Do you make a PTY LTD and then register for turnover tax with that business if you are under 1 million turnover per year? The video makes it seem like a separate thing to PTY LTD, Is it?
There are certain criteria. And your accountant will certainly advise you if you can qualify. Why would this guy say that your accountant would keep quiet - bs
I need to watch more of your content. I am 25 and left my job after 6 years and working for myself in multiple field. Brand/Logo Design - Photography (wedding mainly) - Signage & Print Design etc etc I am considering putting photography and design/print business under something to not get caught. I am working for myself currently as my own name. I am making invoices and bills to try prove everything just incase. I should be looking at SBC by the looks of it, but when do I make the decision to make a move? S p.s apologies, so far experience and RU-vid is my knowledge
If you 'in theory' have excess S18A donations not claimed, if the balance remains high every year of assessment ie. the pty doesn't make profits, can SARS offset the future S18A deductions against other tax debts e.g. PAYE, VAT etc.? Excellent spot, I never hear anyone talk about turnover tax!!!
Hi there Very interestingg information thank you for sharing. How does one know if you qualify for turnover tax? Can a retired person also qualify for turnover tax when their income is from interest on capital in the bank?
turnover tax seems dangerous.. say if you paying 1% turnover tax but you profit is only 2% for a particular year, you have an effective tax rate of 50% on your profits.
Net profit margins vary by industry but according to the Corporate Finance Institute, 20% is considered good, 10% average or standard, and 5% is considered low or poor. So if you're only making 2% net profit, you would need to review your business strategy urgently.
Any pty with qualifying turnover can claim small business deductions. Currently the best way to not pay tax is 12B solar investments. 12J was also great while it lasted.
Here's an interesting question. I have a personal property that's in our names, but I want to move it to be under a company, where the tax and income etc. Become the companies? Is this a thing and possible? And is it even worth it?
I guess one thing to note is that the author states that this is for your small business, not you as the individual. This is important because if you have a SBC and you're only on 20% that sounds fantastic, but that money is not yours to spend, its your business's money! You still need to take out a salary and then pay PAYE on that salary as if you were employed by a different company. In other words, the tax man always wins!
The salary you take from the business is still an expense. For example if your SBC does 1 mil in sales, and you only need a salary of 30k per month, the tax is going to be way less than if you received that 1 million as a sole proprietor.
There is an implied tax in that the minute you need someone to do your taxes it is money you need to pay just to BE a business even if you don't have any income. The many regular returns you have to do themselves becomes a form of tax. There is a video doing the rounds of this chick asking: "If you give me $500 that you have already paid tax on, and I have to pay tax on that 500 income, that's twice tax has been paid on that $500 and if I buy something with that $500, I must pay tax... on that $500.. and the person who receives that money from me in a sale must also pay tax on that $500.... so..." ... then she gives up trying to trace just how much government is making on that $500... why? Because... ...Tax is a scam.
@@AndreBothmaTax Suggestion - Please make a video about Solopreeners and how they can get the most out of their tax. Especially if they are over R1m a year in billables.
Hey brother , good video!! didn’t see anything about a tax Directive as most sales or financial advisors also operate as businesses 👍 maybe something to also touch on.
I personally dislike tax directives as the annual tax the person is supposed to pay is often higher than the percentage applied for in the tax directive.
Please explain @DVDesignSA how paying taxes is not mandatory.I'm interested to hear your thoughts. Unless one moves to those 17 countries who do not impose income tax on its citizens.
Don't make profit in your business. Simple. Pay yourself a higher salary, you'll end up with at the most 45%. To get your retained income out, you need to pay 20% dividend tax after the 27% company tax. That just stupid. Employ your retired family at threshold, which they open each a separate bank account but the cards given to you. You're welcome
The effective maximum tax rate of a company, if you take out all the profit, which is rarely the case, is only 41,6%. (27+(100-27)*20). Ideally you would utilise the primary rebate and lower brackets in salary for the individual until 41%, then pay the rest as dividend. Also, be careful of paying salaries to people who don't actually work for the company - the deduction may be disallowed on the general deduction formula ("expenses incurred in the production of income"). If there is a credit shareholder loan payable by the company, charge interest payable to the shareholder, for which there is an exemption of about 20k per individual. Diclaimer: Not tax advice - consult your tax practitioner.
@@mundusuys8739 Yes makes sense. But who will know that someone receive a salary that is not in production of income, if there is a contact etc in place. I say, don't show any profits, then adjust your salary to the 41% tax as you advised. Any leftover profit, be creative ie open an NPO who can pay other expenses or employ family how I mentioned above
@@balsak007 It is unlikely to be detected, but still, you'd be a cheat. The 'racket' you describe there, with the bank accounts on other's names etc. is downright fraudelent. What if you had a fallout with Mommy and she rats you out? There'd be a trail of false EMP returns & recons and bank statement entries for years. Getting away with it is not an achievement.
Very misleading. Sole proprietor tax is higher but the money is in your hands. Company tax may be less but to get the funds into your hands you have to pay dividend tax or equivalent. SBC tax is a good option for smaller businesses but other than that this is just regurgitating the tax rates everybody knows.
The danger with turnover tax is that you will still pay the tax even if you incur a loss for the year. And just a correction on sole proprietors - they can incur an assessed loss on trading activities, which can be set off against any future trading profits they make in that same trading activity that incurred the loss (ring-fenced).
@@AndreBothmaTax Do you honestly think handing over your hard earned money to a corrupt, ethically deficient entity like govt who is at war with you, makes any sense ????
I am a registered tax practitioner, and this is the WORST tax advice I've seen. If only taxes were this simple. This video is a joke. Your accountant will proof me right.
