A sole proprietorship also known as a sole trader is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business. All profits and all losses accrue to the owner. However, the South African Revenue Services (SARS) recommend that you register as a tax payer. Businesses with a turnover of under R100 000 usually do not pay tax, but they must register with SARS.
Submitting returns...
From 1st March 2009 many small businesses with a turnover of less than R1 000 000 per annum can opt to be taxed purely on turnover. If a business does a turnover of less than R100 000 they do not pay tax, but must submit a return.
Taxable turnover (R) |
2010/11 Rates of tax |
Taxable turnover (R) |
2011/12 Rates of tax |
R0 – R100 000 |
0% of each R1 |
R0 – R150 000 |
0% of each R1 |
R100 001 – R300 000 |
1% of the amount above R100 000 |
R150 001 - R300 000 |
1% of the amount above R150 000 |
R300 001 – R500 000 |
R2 000 + 3% of the amount above R300 000 |
R300 001 – R500 000 |
R1 500 + 2% of the amount above R300 000 |
R500 001 – R750 000 |
R8 000 + 5% of the amount above R500 000 |
R500 001 – R750 000 |
R5 500 + 4% of the amount above R500 000 |
R750 001 and above |
R20 500 + 7% of the amount above R750 000 |
R750 001 and above |
R15 500 + 6% of the amount above R750 000 |
If the business is not yet generating an income, the business must register as a tax payer and submit a zero return.
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