INCOME TAX FORMULA
Description Calculation/Explanation R
GROSS INCOME (includes exemptions)
Local Sales remove VAT +
Export Sales export sales are zero-rated +
LESS : EXEMPTIONS
Partial exemptions therfore add to calculation and
Dividends - Foreign & local & Gorvenment grants
then subtract it.
INCOME
LESS: DEDUCTIONS
Opening Stock Market Value -
S11(a): Raw materials / purchases Cost price -
Closing stock Add back lower of: Cost or Market value +
Other deductions
LESS : CAPITAL ALLOWANCES
ADD :TAXABLE CAPITAL GAINS
Total cost incurred to bring the asset to the location
Cost
and condition to be used by the tax payer
Cumulative allowances
Tax base (cost - cumulative allowances)
Scrapping loss / recoupment lower of selling price or cost price - tax base
Proceeds selling price - recoupment X
Base cost -
Capital gain (PROCEEDS - BASE COST)
SUBTOTAL
LESS: SECTION 18A DEDUCTION limited to 10 % of subtotal -
TAXABLE INCOME
Normal tax x 28%
Provisional taxes paid -
Net tax payable to/ (refundable by) SARS
Description Calculation/Explanation R
GROSS INCOME (includes exemptions)
Local Sales remove VAT +
Export Sales export sales are zero-rated +
LESS : EXEMPTIONS
Partial exemptions therfore add to calculation and
Dividends - Foreign & local & Gorvenment grants
then subtract it.
INCOME
LESS: DEDUCTIONS
Opening Stock Market Value -
S11(a): Raw materials / purchases Cost price -
Closing stock Add back lower of: Cost or Market value +
Other deductions
LESS : CAPITAL ALLOWANCES
ADD :TAXABLE CAPITAL GAINS
Total cost incurred to bring the asset to the location
Cost
and condition to be used by the tax payer
Cumulative allowances
Tax base (cost - cumulative allowances)
Scrapping loss / recoupment lower of selling price or cost price - tax base
Proceeds selling price - recoupment X
Base cost -
Capital gain (PROCEEDS - BASE COST)
SUBTOTAL
LESS: SECTION 18A DEDUCTION limited to 10 % of subtotal -
TAXABLE INCOME
Normal tax x 28%
Provisional taxes paid -
Net tax payable to/ (refundable by) SARS
