Congratulations on registering your new company! Now, you’re probably wondering, “What’s next?” Don’t worry, we’ve got you covered. Let’s dive into all the essential tax registrations and compliance steps you need to follow in South Africa.
Open a Company Bank Account
The very first thing you need to do is open a bank account for your company. Why? Because your company is a separate legal entity, and it’s crucial to keep its finances separate from your personal finances. Treat your company as an independent entity at all times to stay on the right side of the law and enjoy the benefits this separation offers.
Update the Registered Representative with SARS
Once your bank account is set up, the next step is to update the registered representative with the South African Revenue Service (SARS). Without a representative, no tax registrations can be done on e-filing.
Who is a Registered Representative?
A registered representative is someone with full authority to act on behalf of a company, trust, or close corporation.
Documents Needed:
- Appointment letter: Specifies the representative’s rights.
- Enterprise Notice of Incorporation: A copy of the Registration Certificate.
- Identity document: A copy of the representative’s ID.
- Representative’s image: A photo of the representative holding their ID and a note that reads, “Update my details.”
- Proof of residential address
Typically, the registered representative is the Public Officer, Accounting Officer, or an administrator.
Income Tax Registration
Good news! Your company is automatically registered for Income Tax when you register with the Companies and Intellectual Property Commission (CIPC). After updating the representative, you just need to activate income tax and provisional tax on the company’s e-filing profile. Remember, all companies must submit annual Income Tax returns and two Provisional Tax returns per year.
Value-Added Tax (VAT) Registration
VAT is a tax on the consumption of goods and services.
When to Register for VAT:
- Compulsory Registration: If your company’s taxable supplies exceed R1 million in any consecutive 12-month period, you must register for VAT.
- Voluntary Registration: If your taxable supplies exceed R50,000 in the past 12 months, you can register voluntarily. Note, however, that companies with turnover under R1 million are not legally required to register for VAT.
Employment-Related Registrations
Employees’ Tax:
- Register with SARS within 21 business days after becoming an employer, unless none of your employees are liable for normal tax.
- Post-registration, you must submit monthly EMP201 returns and bi-annual EMP501 returns.
Unemployment Insurance Fund (UIF):
- Register with UIF if you employ people for more than 24 hours a month.
- Submit monthly UI19 returns by the 7th of each month. If you’re also registered for employees’ tax, you’ll make UIF payments to SARS; otherwise, payments go directly to UIF.
Compensation Fund:
- Register with the Compensation Fund within 7 days of hiring your first employee.
- Annually submit a Return of Earnings report to the Compensation Fund, which will determine your payment based on your industry and earnings report.
Final Thoughts on Tax Registrations
These are the basic tax registration requirements for most new companies in South Africa. Depending on your industry, there might be additional registrations and compliance requirements. Make sure to thoroughly research and understand all legal obligations relevant to your specific industry.
By following these steps, you’ll ensure that your company stays compliant and poised for success. Need help navigating these registrations? Obie Accounting Services is here to guide you every step of the way.
