Taxation in South Africa is residence-based. Residents are taxed, based on their worldwide income, non-residents based on their South African income.
Any person who is liable of income tax must register as a tax payer at the South African Revenue Service (SARS). You need to register as a tax payer to get a tax number, and you will need one if you are planning on buying a house or trade shares.
It is important to research if you qualify as a resident or non-residents tax payer, and you should register yourself at SARS within 60 days after becoming a tax payer.
You must register as a tax payer if you:
- receive a R60,000 (or more) income,
- run a business in your name,
- want to become director of a company,
- received a travel allowance,
- had PAYE (Pay As You Earn tax) deducted from your salary during the year.
What do you need for tax registration?
In order to register as a tax payer, you must fill the IT 77 form (download it at: www.sars.gov.za ). Your will have to hand in at the nearest SARS office, along with:
- a certified copy of your Identification Document or Passport,
- your bank details (certified copies of account statements, letters from the bank confirming your details, or a cancelled cheque),
- income details for the last three years,
- proof of residence (e.g. an electricity bill).
Tax registration is free, and there is no standard waiting time set. Once you are registered and have a tax number, you must register online as a tax payer (www.sarsefiling.co.za ).
Tax payment
There are three different mechanisms of tax payment:
- SITE (Standard Income Tax on Employee),
- PAYE (Pay As You Earn)
- and provisional tax.
SITE and PAYE are part of the employee’s tax, and are monthly, daily or weekly deducted from salaries, wages and bonuses. Employers issue employees with a tax certificate when these taxes are deducted.
Provisional tax is an estimated on anticipate income paid twice a year.