For any business, conducting services in South Africa, it can be somewhat of a challenge to stay ahead of the game, regarding the registration and compliance as required by the law. This article serves as a summary concerned with for the most frequent registrations and compliance that applies to most businesses.
- Annual returns and annuities (Companies): Any company that wants to remain registered at the CIPC must submit a return of information to the CIPC annually, during the company’s anniversary month. It is also of utmost importance to pay the annual fee.
- Income Tax: Any company that trades should be registered as either an individual / sole trader, company, trust, or any other person, as a taxpayer to the South African Revenue Service (SARS). Annually this company should complete and submit an income tax return (IT12 or IT14). Furthermore, a provisional tax should be calculated every six months and an IRP 6 return must be submitted, if necessary, any outstanding amount must be paid. Non-compliance can result in substantial penalties. (www.sars.gov.za)
- Value Added Tax (VAT): If the annual turnover of the company will exceed R1 million, the company must register for VAT. A voluntary registration can be done if the turnover exceed R50 000 per year. VAT returns should normally be submitted every two months and, if necessary, outstanding amount should be paid. (www.sars.gov.za)
- Unemployment insurance: If a company has employees, the company must register as an employer for unemployment insurance. Monthly returns for payment has to be submitted. An amount equal to one percent of the salaries of employees should be paid by the employer, and a further one percent by the employee. (www.labour.gov.za)
- Employees Tax: If any of the employees of a company’s remuneration exceeds the limit for the Income Tax, the company, as employer, should register for PAYE (Pay system). The tax must be deducted, monthly from these employees’ salaries, and paid to SARS. In addition to the payment, the necessary returns should also be filed. Company should reconcile a (IRP 501) biannually and submit it to SARS. In addition to the PAYE reconciliations, IRP 5 certificates should annually be accounted for all employees. (www.sars.gov.za)
- Skills Development: If the total annual wage bill of the company exceeds R500 000, or if the company has more than 50 employees, the company should also register CSL. Monthly returns should be and must also be submitted monthly returns and pay the necessary tax be. (www.labour.gov.za / www.sars.gov.za)
- Compensation: Any company that employs workers, regardless of the compensation paid for such employees, must register as an employer for accident insurance with the Department of Labour. The company must annually submit a return to the department after which they will be charged at a percentage of the total wage bill of the company. Employees, who are injured on the job, can claim compensation from this fund.
- Equity: A business that employs more than 50 employees, or a business that exceed the proposed threshold of annual turnover for the specific sector in which it trades, should, biennially, draft an employment equity preparation at the Department of Labour.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.