To many small business owners, their company tax return is the last item on their to do list but the one that is likely to cause the most anxiety. This may be the feeling to you but it is really unfounded.
The Last Item
The company tax return is actually the last item in a long chain of events that makes the business cycle. Most of the work, in fact, all of it, has already been done by the time it needs to be submitted. The only thing that needs to be done is to complete the return on SARS efiling and hit “SUBMIT”. It is as simple as that.
What returns do I submit for my company?
The company is a provisional tax payer and this means that their are three returns that need to be submitted. These are the returns and the dates that they are due:
- Provisional tax return number one: August
- Provisional tax return number two: February
- Company Tax Return: From July – January of the following year.
Example:
For the period of March 2021 – February 2022. The first provisional return will be submitted by 31st August 2021 and the second provisional tax return will be submitted by the 28th of February 2022. The company tax return will be due between July 2021 and January 2022.
What is a provisional return?
A provisional return is a bi-annual return that is submitted by the company. It is based on the estimated profit for the year so far and estimated for the full year. It is a payment that stands as a “prepaid” amount. This reduces the tax bill calculated in the company tax return.
Read more about provisional tax returns here.
What if a company makes a loss? Do you I get a refund like I sometimes get with my personal return?
No, you don’t get a refund. Instead, you carry that loss forward into the following year.
Example: Your company makes an R 100 000 loss in 2021. You carry that loss forward into 2022. In the 2022 year, you made a profit of R 75 000, YAY! You still DON’T PAY Tax. You take the profit and add it to the loss = R 25 000. This means you “still have” R 25 000 loss carried forward into 2023.
There are various factors in the above calculation that are best discussed with an accountant who is a registered SARS Tax Practitioner in order to make sure everything is correct and accurate. Please contact us if you have any questions regarding this.
There are other types of tax that a company and you can see more details on the SARS website.
This article was updated on 24th May 2021