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Tax break for personal service companies |
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Written by: Jenny Klein
Source: www.persfin.co.za
Personal service companies were used as tax planning vehicles until a clampdown in 2000 left them without many of the benefits available to other small businesses. Now amendments to the law have helped balance the scales.
The concept of a personal service company was introduced in 2000 to combat a tax avoidance scheme whereby employees contracted to render services through a company in order to escape employees tax being deducted from their earnings.
For example, the scheme was used by information technology personnel. While employees are liable for PAYE, a person could do the same work and avoid PAYE by setting up a company or close corporation (CC) that would employ him or her to render services to the former employer. No employees tax was withheld from the fees paid to the company or CC in these circumstances. |
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Getting by with a little help from the taxman |
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Written by: Deborah Tickle
Source: www.persfin.co.za
There are significant tax benefits to encourage small businesses, but the size of your business determines which benefits you qualify for, and there are other criteria to keep track of too.
In recent years the government has recognised the need to encourage the development of small businesses by providing special tax rules and methods to help them deal with the heavy administrative burden that all businesses carry but that small businesses, through theirlack of size and resources, find difficult to manage. |
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How big is your small business? |
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Written by: Deborah Tickle
Source: www.persfin.co.za
Before you assume that as the owner of a small business you qualify
for special tax concessions, make sure you understand the Receiver
of Revenue’s definition of a "small business".
In his Budget speech this year, Minister of Finance Trevor Manuel
announced that further special tax concessions would be granted
to small businesses. In the past, the special treatment accorded to
small businesses was limited and only applied to certain types of
small businesses. |
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