For purpose of Income Tax a company includes; any body corporate, specified corporation, collective investment undertaking, a charitable, religious or educational institution, a trust established for public purposes and any association or society whether incorporated or registered or not, but it does not include a partnership.

Taxation of a company
A company is liable to tax on its income like any other person. In broad terms a company is taxed on its income after deducting expenses that are “wholly, exclusively and necessarily incurred” for the production of that income. The income is then subject to tax at the rate of 22% for resident companies and 30% for non resident companies, except for;

a)   Approved manufacturing companies – 15%
b)   IFSC Companies – 15% and,
c)   Pension and Provident funds not approved by the 
      Commissioner – 7.5%

Self Assessment Tax (SAT)
All companies pay tax under Self Assessment system. This is a system where a Taxpayer is charged with the responsibility of making his own assessment and pays the necessary tax in quarterly installments.

A company has to estimate the taxable income for the tax year to the best of its ability based on the past and current performance of the company. Then;

•    Apply the rates of tax as appropriate to the
      tax year to
•    Arrive at tax payable for the year
•    Divide the tax payable in quarterly installments
•    Pay the tax in advance for each quarter

The exact tax payable for the year will only be known when completing the SAT return which is due four months from financial year end. If there is any difference between the amounts of tax paid in advance and the amount in the return, the balance should be paid at the time of submitting a return in case of an underpayment. If the balance is an overpayment a refund will be payable.

The quarters are made at three months interval. First quarter payment being due three months from the beginning of the company’s financial year.
For example;
    Company XYZ has its financial year commencing in the month of April. Its Quarterly
Installments will be due as follows;
    1st quarter            June
    2nd quarter            September
    3rd quarter            December
    4th quarter            March of the succeeding year

Due date of the return in this case will be end of July of the succeeding year.

A company whose tax payable is P50 000 or less has an option to either pay in quarterly installments or at the time of submitting a return.