Selected Tax expressions defined
Capital Gains Tax – A tax incurred once a company disposes of an asset or property.
Deductible expenditure – Any spending of a monetary nature which is levied during the tax annum in order to produce revenue in your enterprise, such as operational expenses, investments bought for your enterprise and so on.
Direct taxes – Taxes that are levied on individuals. The idea ‘person’ connects to people also to lawful beings (companies, CCs, trusts, deceased estates).
eFiling – SARS eFiling allows taxpayers to submit tax returns and expenses electronically (through the web). At this time, only VAT 201 returns, PAYE / SDL / UIF (EMP 201) and interim tax returns (IRP 6) are accommodated. For further info log onto the South African Revenue Service electronic filing site.
Fiscal year – Monetary year is a phase of twelve successive months without involving the calendar year. The fiscal year is designated from the calendar year during which it finishes. The SA administration’s fiscal year commences 1 March and then terminates 28 February. The monetary year includes the day within the calendar year in which it ends and is referred to as FY.
Gross income – Total revenue ahead of taking any exemptions, deductions or allowances into account. This includes income besides money, such as an asset given or service provided in exchange for the sale of merchandise.
Income Tax – A tax imposed for all taxpayers; calculated on the taxable income of both biological and legal individuals.
Net income – That’s the total of proceeds a company has left over once subtracting costs and expenditures from your overall sales revenue. ‘Expenses’ include permissible expenses such as pension fund, retirement annuity, medical aid, PAYE, UIF, etc.
PAYE – Pay As You Earn; a scale of tax subtracted from the salary of any person that earns in excess of R60 000 per year.
Provisional Tax – A person must enlist as a provisional taxpayer if he draws money which isn’t a salary or wages (such as gains from a business), is chief of a private firm or is a member of a close corporation. Provisional tax is customarily paid twice per financial year.
Rebate – An figure subtracted off the tax after your tax cost has been calculated. There are rebates for assorted sorts of enterprises, kinds of taxes, business activities and so on. It is vital to determine if your business qualifies for any rebates, as this can decrease the measure of tax you have got to pay to the Receiver.
Remuneration – Cash rewarded to a member of staff, including a salary or wages, leave pay, travel allowances, overtime pay, bonuses, gratuities, commissions, pensions, annuities, any amounts paid for services provided or adaptation of responsibility, retirement lump sums and any fringe benefits.
SITE – Standard Income Tax on Employees is taken through the employer from an employee’s pay packet (typically at the end of every month). All employees are legally responsible for this tax. Where an employee’s net remuneration is R60 000 or smaller, pay as you earn doesn’t have to be taken.
Unemployment Insurance Fund – UIF affords benefits for persons who are unemplyed or inacapable of working because a constant illness or pregnancy. Deductions to UIF are obligatory and are made by employers, employees and the government.
VAT – Value-Added Tax; an indirect structure of taxation that’s at present imposed at 14% of the cost of all goods and services supplied by vendors.
Even though this is a short explanation of a few South African tax terminology, the tax procedure can still be daunting whether you make your mind up to do it yourself. However the services of a tax consultant will ensure that you dont make small but pricey blunders. If you are just starting out to the world of taxation it is well recommended to inquire about the assistance of a tax consultant.
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