The Corporate Social Responsibility tax |24 June 2013

With the introduction of this new tax certain businesses have had some reservations about its implementation. After consultations with the business community, the Ministry of Finance, Trade and Investment after taking on board some comments of the private sector has decided to amend the provision of the law. Businesses now have two (2) choices when paying the CSR tax.

Who should pay the CSR tax?
The CSR tax is payable by entities which:
• had a turnover of R1 million or more in 2012;
• are not to be listed in the exemption list of the second schedule of the Business Tax Act of 2009
• do not fall in categories 2 – 6 listed in the Seventh Schedule of the Business Tax of 2009 (SI 66 of 2012)

How and when is CSR tax paid?
The entities that are eligible to pay the CSR tax do so on a monthly basis based on their current turnover - in the same way that they are currently paying Vat (Value Added Tax). All payments must be paid by the 21st of every month using the Business Activity Statement (BAS).

What is the rate of the CSR tax?
The rates of CSR tax effective 30 April 2013 are:-
(a) 0.25% on the monthly turnover of the current year of payment; and
(b) 0.25 % offset against any donations made, sponsorships or projects paid for by the business during the current year of payment and approved by CSR tax committee; or
(c) 0.5% on the monthly turnover of the current year of payment.

Example 1: A business will pay 0.25% on its monthly turnover of R100,000 which will be:
R100,000×0.25% = R250 and make donations, sponsorships for projects of 0.25%.

Example 2: A business will pay 0.5% on its monthly turnover of R100,000 which is:
R100,000×0.5% = R500

Example 3:
(a) A non Vat-registered entity:
In June 2013, a company’s turnover is R100,000. Its CSR liability will be 0.5% of R100,000 which is R500.

(b)A Vat-registered entity:
In June 2013, a Vat-registered company’s turnover is R100,000. Then approximately R15,000 of the R100,000 will be Vat. Its CSR liability will therefore be calculated as 0.5% of the Vat exclusive turnover which is 0.5% of R85,000, which is R425.

For more information
Please do not hesitate to contact our Advisory Centre on 4293741/42, Manager Provision of Advice on 4294937, Manager Registry on 4293726, Manager Returns and Payment Processing on 4294972 or Mrs Woodcock on 4293724.