6.1 WHO QUALIFIES TO REGISTER FOR TURNOVER TAX? A person that qualifies as a micro business may register for TT, if it is a: Natural person (or the deceased or insolvent estate of a natural person is registered micro business at the time of death or insolvency); or Company, and The qualifying turnover of that person for the year of assessment does not exceed an amount of R1 million. Other additional factors may prevent a person from qualifying as microbusiness. To determine whether you meet all the requirements to register for Turnover Tax, complete the Quick Test applicable to you on the SARS website. 6.2 WHEN SHOULD YOU REGISTER? Before the beginning of a year of assessment or such later date during that year of assessment as the Commissioner may prescribe by notice in the Gazette. In the case of a person that commenced business activities during a year of assessment, within two months from the date of commencement of business activities. A person that elected to be registered as above must be registered by the Commissioner with effect from the beginning of that year of assessment. A person that is deregistered either voluntary or compulsory may not again be registered as a micro business. 6.3 HOW TO REGISTER FOR TURNOVER TAX? Once the Quick Test has been completed and your business qualifies for TT complete the TT01 application form. The application form is obtainable on the SARS website www.sars.gov.za > Tax Types > Turnover Tax, by calling the SARS Contact Centre on 0800 00 SARS (7277) or through one of our SARS branch. The following mandatory fields must be completed: For Sole Proprietor: o ID/Passport number. For Company and Close Corporation: o CIPC number. For Partnership/Co-operative: o ID/Passport number; and o Registration name. In addition to the mandatory fields the following information should be provided: Particulars of the Sole Proprietor/Company/Partnership/Close Corporation/Co-operative: o Registered name o CIPC number o Trading Name o VAT reference no o Main income source code o Income tax reference no o Establishment date (CCYYMMDD); and o PAYE reference no Business address: o Unit no Revision: 2 Page 3 of 7
o Complex (if applicable) o Street no o Street/Name of farm; o Suburb/District o City/Town; and o Postal code. Postal address: o Mark here with X if as above or complete your postal address o Box Number o Street no o Street/Name of farm o Suburb/District o City/Town; and o Postal code. Bank particulars: o Account no o Branch no o Account type; and o Account holder name (Current or Savings/Transmission). Declaration: o Signature (mandatory); and o Date (CCYYMMDD). Particulars of Sole Proprietor/Applying Partner/Public Officer: o First name o Initials o Surname o Home tel no o Position held o Bus tel no o ID no o Date of birth (CCYYMMDD) o Income tax ref. no o Fax no o Passport country (e.g. South Africa = ZAF) o Passport no o Date of appointment (CCYYMMDD) o Cell no; and o Email Address. Particulars for Three Partners/Members/Shareholders o Number of Partners/Members/Shareholders o Particulars 1: o Particulars 2: o Particulars 3: Revision: 2 Page 4 of 7
The completed TT01 application form must be submitted to SARS in the drop-off box at a SARS branch or by visiting the nearest SARS branch. The efiling option is not available for submission of the TT01 application form. 6.4 DEREGISTRATION FROM TURNOVER TAX Deregistration of a micro business from Turnover Tax will either be done on a voluntary or compulsory basis. A voluntary deregistration is where the taxpayer still qualifies as a micro business but after registering for Turnover Tax, realises that the normal tax system will be more suitable to their business operations. You may then elect to deregister from turnover tax: Before the beginning of a year of assessment or a later date during the year as may be prescribed by the Commissioner by notice in the Gazette. o Deregistration will be effective from the beginning of that year of assessment. A compulsory deregistration is where the taxpayer no longer qualifies as a micro business as it no longer meet all the requirements as described in 6.1 above. A compulsory deregistration can occur during any time of a particular year of assessment since it depends on a specific event that disqualifies the micro business from Turnover Tax. In this event, the registered micro business must notify SARS within 21 days from the date on which it no longer qualifies as a micro business. SARS will then register the taxpayer on the normal tax system. Taxpayers that exit the turnover tax system whether on a voluntary or compulsory basis, will not be allowed to re-enter the system again. 6.5 MAKING PAYMENT FOR TURNOVER TAX Once the micro business is registered, SARS requires the business to make two interim payments and the final liability will be determined on assessment. The first interim payment must be submitted to SARS within six months from the beginning of the year of assessment (last business day of August). The first interim payment must be based on an estimate of the taxable turnover of the micro business for the year of assessment, and amounts to 50% of the turnover tax payable on the estimate. This estimate must not be less than the taxable turnover for the previous year of assessment unless SARS accepts the lower estimate. The second interim payment is based on an estimate of the taxable turnover for the full year of assessment, and a calculation of the turnover tax payable on the estimate. The second interim payment must be submitted at the end of the year of assessment (last business day of February). The payment must be equal to the amount of turnover tax payable on the estimate for the full year, less the first interim payment. Interest is charged in respect of the number of days for which any portion of the tax remains unpaid. Where the estimate of the taxable turnover for the second interim payment is less than 80 percent of the actual taxable turnover for the year of assessment, an underestimate penalty equal to 20 percent of the difference between the following will be charged: Turnover tax on the estimate; and Turnover tax on 80 percent of the actual taxable turnover for the year of assessment. Revision: 2 Page 5 of 7
SARS may estimate the interim payments due by a micro business where the micro business fails to make a payment due or where SARS is not satisfied with the amount paid for the interim payment. Where any day specified for any payment to be made under the provisions of the Tax Administration Act falls on a Saturday, Sunday or public holiday, the payment must be made no later than the last business day before the Saturday, Sunday or public holiday. Take into account the time needed for processing where payments are made via a bank or ATM. Where payments are made electronically, make provision for the bank's cut-off time and for a clearance period that could take between two and five days. 6.6 COMPLETING PAYMENT ADVICE Use the Turnover Tax Payment Advice (TT02) when making payment. The payment advice can be obtained on the SARS website www.sars.gov.za > Tax Types > Turnover Tax, by calling the SARS Contact Centre on 0800 00 SARS (7277) or through one of our SARS branch operations offices. The following payment particular rules must be used when completing the payment advice for the Turnover tax: Beneficiary ID SARS-PROV Where T A X R E F N U M B refers to the assigned tax reference number, example if the tax reference number is 1234567890 and you making the payment second payment for 2010, then your payment reference number will read as follows:1 2 3 4 5 6 7 8 9 0 P 0 0 0 2 2 0 1 0 Note: it is essential to quote the Payment Reference Number and Beneficiary ID when making the payment. This will minimise the incorrect or non-allocation of your payment. For more information refer to the SARS Payment Rules on the SARS website at www.sars.gov.za. The taxpayer s liability will equal the amount paid into the account. 6.7 ANNUAL RETURN AND ASSESSMENT An annual (final) tax return (TT03) reflecting the actual amount of taxable turnover for the year of assessment must be submitted to SARS by the due date as prescribed by SARS for that year of assessment. A copy of the TT03 return can be obtained by following this path on the SARS website www.sars.gov.za > Tax Types > Turnover Tax, or by calling the SARS Contact Centre on 0800 00 SARS (7277) or through one of SARS branches. The completed return must be submitted to SARS via the drop-off at a SARS branch. The efiling and walk-in options are not available for submission of this return. An assessment will be issued once the TT03 is processed. Where a micro business fails to submit an annual tax return (TT03), or where SARS is not satisfied with the return submitted, SARS may estimate the taxable turnover for the year of assessment and issue an assessment for the turnover tax due. 6.8 RECORD KEEPING A registered micro business must retain a record of the following documents for audit purposes: Amounts received during a year of assessment Dividends declared during a year of assessment Revision: 2 Page 6 of 7
Each asset at the end of a year of assessment with a cost price of more than R10,000; and Each liability at the end of a year of assessment exceeding R10, 000. 7 QUALITY RECORDS Number TT01 TT02 TT03 Title Turnover Tax Application form Turnover Tax Payment Advice Turnover Tax Return 8 DOCUMENT MANAGEMENT Designation Name / Division Business Owner: Group Executive: Contact Centre Operations and Branch Operations Policy Owner: Executive: Enterprise Business Enablement Author: S Matimba Detail of change from previous revision: Q code updated from AS-TT-01-G1 to ; updated with Tax Administration Act and 2012 legislative changes. Template number and revision POL-TM-07 - Rev 3 Revision: 2 Page 7 of 7