Announced by the minister of finance
Business tax will only be imposed on a turnover threshold of R335 000 or more. This means that smaller companies with turnover of R335 000 or less will no longer be required to pay company income tax.
Companies with a turnover of between R335 000 and R500 000 will now only be liable for 1% business tax on the income earned above the threshold.
For example, say your company has a turnover of R370 000 per year. The first R335 000 is tax free. Then 1% company income tax applies to the amount exceeding the threshold. In our example, 1% of the excess – that is, 1% of R35 000 — is payable to the South African Revenue Service (SARS).
If your company has a turnover of between R500 000 and R750 000, your business tax will be at a rate of 2% for the income above the threshold.
If you have a turnover of between R750 000 and R1-million, your business tax will be 3% for the earnings above the threshold.
The maximum rate for business tax has also been reduced from 6% to 3%.