Could you please advise me on how to submit the relevant tax returns in the following scenario?: A client earns a salary, but also has a sideline business which is registered for Turnover Tax (TT). Once you register a client for TT SARS automatically regi
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
The SARS Tax Guide for Micro Businesses explains that “Salary income, excluding a notional salary payment made by a sole proprietor to himself or herself, will be taxed in terms of the current personal income tax system.”
There is no reason why SARS should register a person applying to be a micro business as a provisional taxpayer. Section 10(1)(zJ) confirms that “any amount received by or accrued to or in favour of a registered micro business as defined in the Sixth Schedule, from the carrying on of a business in the Republic, other than an amount received by or accrued to a natural person registered as a micro business that constitutes—
(i) investment income as defined in paragraph 1 of the Sixth Schedule; or
(ii) remuneration as defined in the Fourth Schedule”.
No IRP6 should therefore be necessary unless the individual is in receipt of other income. If the person is a natural person that is a registered micro business, he or she will only be a provisional taxpayer if the investment income or other taxable income exceeds the tax threshold.