SARS released updated turnover tax guidance for micro businesses, providing a new Tax Guide and FAQs to help small enterprises with turnover up to SAR 1 million navigate compliance.
The South African Revenue Service (SARS) has released updated guidance on turnover tax for micro businesses, aimed at helping small enterprises navigate the simplified tax regime. The new resources include the Tax Guide for Micro Businesses (Issue 3) and Frequently Asked Questions: Turnover Tax.
The turnover tax system provides a simplified alternative to normal income tax, capital gains tax, and partially, dividends tax for micro businesses with qualifying turnover of SAR 1 million or less. The regime is designed to reduce administrative burden and compliance costs for eligible small enterprises.
Turnover tax was introduced with effect from 1 March 2009, applicable to years of assessment starting from this date. It aims to alleviate the tax compliance burden for qualifying micro businesses by imposing a tax on turnover at progressive rates, as outlined in the table below.
The Tax Guide explains which entities may qualify as micro businesses, as well as those that do not meet the criteria. It defines qualifying turnover and outlines the anti-avoidance rule, which prevents income splitting between related parties to reduce tax liability. Special provisions for partnerships and other specific scenarios are also covered.
In addition, the guide provides practical guidance on turnover tax administration, including registration, record-keeping, filing requirements, and payment obligations. Businesses can use this information to ensure compliance with the turnover tax rules and avoid potential penalties.
The FAQs complement the guide by addressing common questions and providing broader explanations of the turnover tax framework. Topics include eligibility, calculation of turnover, and interactions with other tax obligations. SARS aims to provide clarity for micro businesses so they can make informed decisions about their tax responsibilities.
