Corporate Income Tax

What is Corporate Income Tax?

Corporate Income Tax (CIT) is also known as a business tax. It is a tax imposed on businesses incorporated under the laws of the Republic of South Africa and which derive income from within the Republic or through a branch or permanent establishment within the Republic.

What kind of businesses need to pay Corporate Income Tax?

CIT is applicable  to the following businesses which are liable under the Income Tax Act, 1962.  The payment of tax on all income received by or accrued to them within a financial year:

  • Listed public companies
  • Unlisted public companies
  • Private Companies
  • Close Corporations
  • Co-operatives
  • Collective Investment Schemes
  • Small Business Corporation (s12E)
  • Body Corporates
  • Share Block Companies
  • Dormant Companies
  • Public Benefit Companies.

What steps must you take?

  1. Register as taxpayer
  2. Submit annual tax return
  3. Submit provisional tax returns

When should CIT be paid?

Provisional Tax

  1. First payment – within six months from the beginning of the year of assessment
  2. Second payment – on or before the last day of the year of assessment
  3. Third payment – seven months after the year of assessment for taxpayers with February year-end and six months after year of assessment for all other cases.

Tax on Assessment

Payment of tax upon an assessment notice issued by SARS must be done within the period specified in such notice.

Corporate Income Tax is payable at a rate of 28%.

How should CIT be paid?

Payments can be made using the following options:

  • Online Banking
  • Electronic funds transfer
  • Bank payments
  • e-filing
  • By cheque, limited to payments of R500 000 or less
  • Swift payment method (foreign payments only).