company tax
Business Accounting 101: What is Company Tax?
20th February 2017
Junk Status: 3 Challenges Facing Your Business
19th April 2017
Show all

Finance Minister Pravin Gordhan dropped a few tax bombshells during the South African Budget Speech in February, hitting the wealthiest of residents the hardest with a new individual income tax bracket of 45% applied to individuals earning above R1.5 million for the year. Company tax remains relatively unchanged, with a few exceptions, but focus is being placed heavily on tax revenue collection during the 2018 financial year. RBK Business Accountants take a closer look at the South African business tax changes for the 2018 tax year…

Company Tax Rates for 2018

While the normal income tax rates remain unchanged from 2017 at 28%, the dividends tax rate has increased from 15% in 2017 to 20% in 2018:

Company Tax Rates 2017 2018
Normal Income Tax 28% 28%
Dividends Tax 15% 20%

Small Business Corporation Tax Rates for 2018

Small Business Corporation tax rates are considerably lower in comparison to the normal tax rate of 28% for companies in general. Tax changes for the 2018 financial year are as follows:

Taxable Income Taxation Rate
R0 – R75,750 0%
R75,751 – R365,000 7% of taxable income above R75,750
R365,001 – R550,000 R20,248 + 21% of taxable income above R365,000
R550,001 and above R59,098 + 28% of taxable income above R550,000

Micro Business Turnover Tax Rates for 2018

Micro Business tax has been simplified for the benefit of sole proprietors, close corporations, and partnerships. The Turnover Tax system replaces Income Tax, Capital Gains Tax and Dividends Tax responsibilities for micro businesses with one simple taxation system. Tax changes for the 2018 financial year are as follows:

Taxable Turnover Taxation Rate
R0 – R335,000 0%
R335,001 – R500,000 1% of the amount above R335,000
R500,001 – R750,000 R1,650 + 2% of the amount above R500,000
R750,001 and above R6,650 + 3% of the amount above R750,000

Capital Gains Tax Rates for 2018

Capital gains tax forms part of income tax, and is paid on the disposal of assets for capital gain. While capital gains tax remains unchanged for companies moving into the 2018 financial year, changes can be noted for individuals, special trusts and other trusts:

  Maximum Effective Rate of Tax
 Individuals and Special Trusts  18%
 Companies  22.4%
 Other Trusts  36%

Solid Tax Advice from Professional Business Accountants

At RBK Business Accountants, we’re more than just accountants! We are skilled at assisting companies of all shapes and sizes with tax information and advice, as well as helping businesses to reduce their tax burden legitimately with legal tax saving policies. Speak to us about how we can help your business with professional tax services.