Company Registration & Tax Guide
Understanding Corporate Income Tax (CIT), SBC relief, VAT and payroll obligations keeps your Private Company compliant and capital-efficient.
Corporate tax is levied on taxable income (gross revenue minus allowable business expenses and deductions) rather than total turnover.
27% flat rate — the default corporate rate applied to net taxable profit.
Progressive 0%–27% — tax relief for companies with gross turnover ≤ R20 million.
Progressive 0%–3% — simplified combined tax for micro-entities with turnover ≤ R1 million.
For standard private companies, SARS applies a flat 27% Corporate Income Tax (CIT) on net profit.
Tax payable = (Gross revenue − allowable deductions) × 27%
Example: a (Pty) Ltd earns R1,500,000 revenue and incurs R1,000,000 in allowable expenses — taxable income is R500,000, so CIT at 27% equals R135,000.
Companies that meet SARS Section 12E criteria qualify as SBCs and benefit from tiered, progressive tax brackets.
R0 – R99,000
Tax-free threshold
R99,001 – R365,000
7% of the amount above R99,000
R365,001 – R550,000
R18,620 plus 21% of the amount above R365,000
R550,001 and above
R57,470 plus 27% of the amount above R550,000
• Gross annual turnover must not exceed R20 million.
• All shareholders must be natural persons (no company or trust shareholding).
• Shareholders may not hold shares in any other active company.
• No more than 20% of gross income may come from investment yields or personal services.
SBCs also qualify for accelerated wear-and-tear allowances — e.g. a 100% deduction in year one for manufacturing assets.
Micro-businesses with an annual turnover under R1,000,000 can opt into the Turnover Tax System. It replaces Corporate Income Tax, Provisional Tax and VAT with a single, simplified tax calculated directly on gross turnover (between 0% and 3%).
Beyond annual CIT, a (Pty) Ltd must stay compliant with these additional SARS obligations.
20% — withheld by the company when profits are distributed to shareholders as dividends and paid directly to SARS.
15% — mandatory once taxable turnover exceeds R1,000,000 in 12 months (voluntary from R50,000).
Effective 21.6% — 80% of the net capital gain is included in taxable income and taxed at the 27% CIT rate.
PAYE on employee salaries; UIF 2% (1% employee + 1% employer); SDL 1% of payroll if annual payroll exceeds R500,000.
Keep to the annual compliance cycle to avoid penalties.
Submitted twice yearly — first payment six months into the financial year; second on the last business day of the financial year.
The annual corporate tax return must be filed within 12 months of the company’s financial year-end.
At Maltech-Africa Business Consultancy we help non-resident directors, local entrepreneurs and regional enterprises with SARS Public Officer registration, Tax Compliance Status (TCS PIN) for tenders and banking, SBC qualification and ITR14 returns, and VAT, PAYE, UIF and COIDA compliance packages.