Taxation Flashcards
Who pays tax
Enterprise
Shareholders
Who pays tax in a SP
Owners
Who pays tax in a partnership
Owners
Who pays tax in a company
Enterprise
How are sp’s and partnerships taxed?
Personal income tax table
How are standard company’s taxed
27%
How are small business companies taxed
Small business tax table
How are micro companies taxed
Micro tax table
Who qualifies for primary tax rebates
Everyone
Who qualifies for only secondary and primary rebates
People older than 65but younger than 75
Who qualifies for primary, secondary and tertiary tax rebates
People 75 and older
Whats the equation for tax payable for individuals
Tax according to scale — rebate(s) = tax payable
What is marginal tax rate
Tax rate applicable on next rand income (read from scale)
Whats effective tax rate
Percentage of taxable income paid towards taxes
Whats the formula for effective tax rate.
(Tax payable)/(taxable income) x 100
What is the income tax for a company on net profit
27%
Whats the dividend tax for a company
20%
What are the prerequisites (requirements) for a small business corporation
- turnover must be less than R20m
- enterprise must have own legal personality
What are the prerequisites (requirements of a micro business)
- turnover less than R1m
- turnover tax: taxes on turnover, NOT profit before taxes
- dividend withholding tax: 20% on amounts above R200 000
Elaborate on paying taxes in SA
Taxes paid in SA is very top heavy with majority of income tax received by SARS coming from the very rich
What is tax morality
The willingness of individuals to pay their taxes and comply with tax laws - its driven by several factors which work in combination to define whether people feel inclined or disinclined to contribute to the tax revenue of their country. At times, these factors are so negative that they accumulate to cause a break down in morality
What are the issues that influence tax morality
- how taxes are spent by government (corruption)
- people are demanding a return on their taxes cause they are unsure of the value of paying taxes
- individuals are entitled to arrange their affairs to minimise paying taxes
Tax avoidance
Arranging affairs to minimise paying tax
Tax evasion
Deliberately conducting activities that result in purposely not paying tax when there is a clear tax liability
