Introduction

Corporate tax is a fundamental component of South Africa’s tax framework, influencing business profitability and regulatory compliance. For businesses to thrive, understanding corporate tax obligations, potential deductions, and compliance risks is essential. At Marwick & Company, we specialise in corporate tax services, ensuring businesses remain compliant while optimising their tax strategy​.

What Is Corporate Tax?

Corporate tax in South Africa is levied at 27% for companies with financial years ending on or after 31 March 2023. Businesses must file annual tax returns with the South African Revenue Service (SARS) to avoid penalties and interest. Managing corporate tax can be complex, and that’s where Marwick & Company steps in. Our expert team ensures that your business tax affairs are handled efficiently, giving you more time to focus on growth​.

Key Considerations for Businesses

1. Provisional Tax Management

Businesses must pay provisional tax twice a year to avoid a large tax bill at the end of the financial year.

• First payment: Due six months into the tax year.
• Second payment: Due at the tax year-end.

At Marwick & Company, we help businesses calculate and submit provisional tax payments accurately to prevent underpayments, which can lead to interest charges​.

2. Tax Deductions and Allowances

Businesses can legally reduce their taxable income by taking advantage of various deductions, including:

• Depreciation on assets (capital allowances).
• Travel and vehicle expenses (subject to SARS regulations).
• Research & Development (R&D) incentives for innovation-driven businesses.

We work with businesses to identify every tax deduction available, ensuring compliance while maximising savings​.

3. Turnover Tax for Micro Businesses

If your annual turnover is less than R1 million, you may qualify for turnover tax, a simplified tax system that reduces the administrative burden on small businesses. Marwick & Company assists startups and SMEs in determining whether turnover tax is the best option for them​.

4. Capital Gains Tax (CGT)

Businesses must account for Capital Gains Tax (CGT) when selling assets. The corporate CGT inclusion rate is 80%, meaning 80% of any capital gain is taxable. We guide businesses on structuring transactions efficiently to mitigate CGT liabilities​.

Common Compliance Mistakes and How to Avoid Them

• Late Filing Penalties: Businesses must meet SARS deadlines to avoid penalties.
• Underestimating Provisional Tax: Inaccurate estimates can result in interest and penalties.
• Failure to Register for VAT: Businesses exceeding R1 million in revenue must register for VAT.

With Marwick & Company, businesses avoid these pitfalls through proactive tax planning and expert compliance management​.

Conclusion

Corporate tax compliance is non-negotiable for businesses operating in South Africa. Partnering with Marwick & Company ensures expert handling of tax submissions, strategic planning, and optimal tax efficiency​.