Company Income Tax Return

SARS classification questions that determine which sections of the ITR14 are generated. Categories include: dormant, micro (turnover under R1M), small/SBC (R1M–R20M), medium/large (over R20M), share block, body corporate. Qualifying Small Business Corporations (SBCs) receive preferential graduated tax rates.

Total sales and revenue: local sales, connected-person sales, and foreign sales. Excludes VAT. The basis for calculating turnover, which determines SBC eligibility (under R20 million threshold) and other tax obligations.

Direct costs of goods sold: opening stock plus purchases less closing stock, plus manufacturing overhead. Deducted from gross sales to arrive at gross profit.

Below-the-gross-profit income items: interest received, REIT dividends, accounting profit on disposal of assets, bad debts recovered, foreign exchange gains, and other sundry income.

Deductible business expenses: employee costs, directors' remuneration, depreciation, administration fees, rent, interest paid, foreign exchange losses, bad debts written off, and other allowable deductions under section 11 of the Income Tax Act.

Accounting profit or loss (gross profit + other income − operating expenditure). Starting point for the tax computation, before SARS-specific tax adjustments.

Additions (disallowed accounting expenses: excessive depreciation, penalties, private expenses) and deductions (SARS allowances: section 12C accelerated depreciation on manufacturing plant, section 11 deductions) to reconcile accounting profit to taxable income.

Accumulated assessed loss from prior tax years. From 1 April 2022, only up to 80% of taxable income can be offset by carried-forward losses per year (the "80/20 rule"). The remaining 20% of taxable income is always subject to tax, regardless of losses.

Net capital gain included in taxable income using the 80% inclusion rate for companies (vs. 40% for individuals). This gives a maximum effective CGT rate of 21.6% (80% × 27%). Capital losses may only be offset against capital gains, not ordinary income.

Final taxable income after all tax adjustments. Corporate tax rate: 27% for years of assessment ending on or after 31 March 2023 (previously 28%). Qualifying SBCs (gross income ≤ R20M, ≤ 4 natural-person shareholders, no passive investment business) are taxed at graduated rates from 0%.

Total tax liability at the applicable rate, less foreign tax credits (section 6quat) and any dividends tax credits. Reduced by provisional tax (IRP6) already paid; any shortfall is due within the SARS assessment notice period.