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Thread: What are STC Credits ?

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    Gold Member daveob's Avatar
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    What are STC Credits ?

    Looking into the new changes to affect small businesses with the new budget.

    The biggest impact I see ( for me ) is the change from STC to DWT.

    More so with the surprise announcement of the change in rate from 10% to 15%.

    Logic tells me to pull out all retained earnings immediately and pay the 10% now ( cash holding sufficient to do this ) - your advice ?

    Also, I keep seeing the term "STC Credits" - can anyone tell me, in laymans terms, what these 'credits' are ?

    Regards
    Watching the ships passing by.

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    Gold Member daveob's Avatar
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    Many Thanks.

    So STC Credits are, for example, related to dividends that my company receives from a subsidary company.
    In the books of the sub-co, they pay the STC to SARS and the divs to my co.
    In my books, I can deduct the STC paid on the divs received ( because it was paid to SARS by the sub-co ), from the STC payable to SARS for divs paid to my shareholders.

    Sounds pretty much just like the Input / Output VAT system.
    Watching the ships passing by.

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by daveob View Post
    Logic tells me to pull out all retained earnings immediately and pay the 10% now ( cash holding sufficient to do this ) - your advice ?
    Pretty hard to argue with your logic in a single tier structure. In this situation it looks like tax has effectively gone up 5%.
    The trouble with opportunity is it normally comes dressed up as work.

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    The term of STC Credits is really nicely explained by you with the examples.

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