Taxation in South Africa is residence-based. Residents are taxed, based on their worldwide income, non-residents based on their South African income.
Any person who is liable of income tax must register as a tax payer at the South African Revenue Service (SARS). You need to register as a tax payer to get a tax number, and you will need one if you are planning on buying a house or trade shares.
It is important to research if you qualify as a resident or non-residents tax payer, and you should register yourself at SARS within 60 days after becoming a tax payer.
You must register as a tax payer if you:
- receive a R60,000 (or more) income,
- run a business in your name,
- want to become director of a company or member of a CC,
- received a travel allowance,
- had PAYE (Pay As You Earn tax) deducted from your salary during the year.
What do you need for tax registration?
In order to register as a tax payer, you must fill the IT 77 form (download it at: www.sars.gov.za). Your will have to hand in at the nearest SARS office, along with:
- a certified copy of your Identification Document or Passport,
- your bank details (certified copies of account statements, letters from the bank confirming your details, or a cancelled check),
- income details for the last three years,
- proof of residence (e.g. an electricity bill).
Tax registration is free, and there is no standard waiting time set. Once you are registered and have a tax number, you must register online as a tax payer (www.sarsefiling.co.za).
There are three different mechanisms of tax payment: SITE (Standard Income Tax on Employee), PAYE (Pay As You Earn) and provisional tax. SITE and PAYE are part of the employee's tax, and are monthly, daily or weekly deducted from salaries, wages and bonuses. Employers issue employees with a tax certificate when these taxes are deducted. Provisional tax is an estimated on anticipate income paid twice a year.