Who is liable for Tax?

In South Africa and just about any other Mixed or Free economy any natural or artificial ‘person’ or legal entity that derives an income is liable to pay tax.

Legal entities are defined as a Person, Close Corporation, Company, Trust, Estates of Insolvent or deceased persons, Clubs and Associations and any other legal entity that derives a taxable income, either because they are legal ‘persons’ or are defined as such for tax purposes.

All business entities as mentioned above, except for a salaried individual that does not trade in his own legal capacity, must be registered for income tax upon foundation. Such entity, including an individual that receives taxable income that is not deducted when received, must also register for provisional tax, any managing member associated to any of the aforementioned legal entities must also be registered for tax and provisional tax.

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