Asked by the Customer on 28-09-2016 21:06:39
Question posted in the General Law category relating to Eastern Cape

Can you please explain what taxes should I pay if I'm starting an internet freelance business?

Posted by Att. Patrick on 28-09-2016 22:36:47

Hi there and thank you for your question,

I am going to assume that your internet freelance business is going to be conducted in your own name. i.e. as a sole proprietor. If that is the case (as opposed to a close corporation, or a company) then the only taxes you will need to pay is provisional tax in your own name. The provisional tax is calculated on a sliding scale and the maximum provisional tax rate is 41% per annum. You should keep careful track of all of your income, as well as all of your business related expenses. e.g. laptop, internet connection, software costs, etc. All of those expenses are deductable from your income and will reduce your "profit" at the end of the day. That means that you will pay tax at a lesser rate on a lesser profit.

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.

Att. Patrick

Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.

Patrick, thank you for your answer. Can you please more details and references on the provisional tax rate? What it might be if my expected annual income is in the range of R400-500k.

P.S. Since I'm now outside of SA for some quite a long time is there a way to contact you any way apart from this website? email or skype could be a very convenient way for me. ready to provide a per-hour payment for consultations because I've got a number of questions.

Posted by Att. Patrick on 01-10-2016 13:55:51

The provisional income tax payable on an annual income of between R406 401 and R550 100 is R96,264 plus 36% of the amount above R406 400.

So if you earn R500 000 for the year, you would pay R500 000 0 R406 400 x 36% (which is R33 696) plus the R96,264, which works out to a total of R129 960.

Unfortunately the only way we can communicate is through this website.

The tax tables are here for more information: http://www.sars.gov.za/Tax-Rates/Income-Tax/Pages/Rates%20of%20Tax%20for%20Individuals.aspx

Remember, the above is calculated on your "profit", so it assumes that you've already deducted your expenses off of your income.

You can ask as many questions as you want through this website, just accept this question and then post another question in a new thread.