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Thread: Turnover Tax - what is considered a "professional service"

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    Junior Member OldGoat's Avatar
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    Turnover Tax - what is considered a "professional service"

    Hi all.

    I am in the process of getting going with a sole prop and want to make use of the turnover tax option.
    However, I do see that if more than 20% of income is generated from "Professional Services" you do not qualify for turnover tax.

    My question: The majority of my income comes from developing websites - would this be classified as a professional service?

    Thanks in advance

    Barry

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    Site Caretaker Dave A's Avatar
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    By SARS's definition (from their FAQ):

    The following are regarded as “professional services”: accounting; actuarial science; architecture; auctioneering; auditing; broadcasting; consulting; draftsmanship; education; engineering; financial service broking; health; information technology; journalism; law; management; real estate broking; research; sport; surveying; translation; valuation; or veterinary science. For natural persons (sole proprietors and partnerships the 20% restriction is limited to professional services only.
    Developing websites is part of information technology, so I regret turnover tax is not an option.

    I should also point out that it's an obstacle to qualifying for small business corporation status too unless the corporation employes three or more full time employees who are not "connected persons."

    I recalled a fairly recent case that put SARS's definition to the sword, but unfortunately upon finding it, it relates to professional consulting.
    The trouble with opportunity is it normally comes dressed up as work.

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    Junior Member OldGoat's Avatar
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    Quote Originally Posted by Dave A View Post
    By SARS's definition (from their FAQ):


    Developing websites is part of information technology, so I regret turnover tax is not an option.

    I should also point out that it's an obstacle to qualifying for small business corporation status too unless the corporation employes three or more full time employees who are not "connected persons."

    I recalled a fairly recent case that put SARS's definition to the sword, but unfortunately upon finding it, it relates to professional consulting.
    Thanks for digging up that info Dave.
    I did read the above info on SARS site but I think that website development would not necessarily fall under information technology.
    In website design, I would be doing about 50% graphic design, 20% "programming" 20% copy writing and 10% setting up hosting. Tucked away in here can also include product photography and marketing planning.
    This is my dilemma - you can obviously see my favored tax option would be turnover tax.

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by OldGoat View Post
    you can obviously see my favored tax option would be turnover tax.
    Very obviously - and who can blame you

    I truly hope someone else might have more encouraging news, but every discussion I've read on the subject to date indicates that "information technology" is being applied in its very broadest interpretation.
    The trouble with opportunity is it normally comes dressed up as work.

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