How to open a bank account
Follow the links below to the major banks in South Africa’s business services.
Interest differs from profit, in that interest is received by a lender, whereas profit is received by the owner of an asset, investment or enterprise. (Interest may be part or the whole of the profit on an investment, but the two concepts are distinct from each other from an accounting perspective.)
The rate of interest is equal to the interest amount paid or received over a particular period divided by the principal sum borrowed or lent (usually expressed as a percentage).
Understanding compounded interest
Compound interest means that interest is earned on prior interest in addition to the principal. Due to compounding, the total amount of debt grows exponentially. In practice, interest is most often calculated on a daily, monthly, or yearly basis, and its impact is influenced greatly by its compounding rate.
It is mandatory for any business to register for VAT if the income earned in any consecutive twelve-month period exceeded or is likely to exceed R1 million.
Any business may choose to register voluntarily if the income earned, in the past twelve-month period, exceeded R50 000.
A small business that is registered as a micro business under the Sixth Schedule of the Income Tax Act may also register for VAT and may elect to submit returns and payments every four months, ending on the last day of June, October and February.
The South African Revenue Service (SARS) is the nation’s tax collecting authority. Established in terms of the South African Revenue Service Act 34 of 1997 as an autonomous agency, they are responsible for administering the South African tax system and customs service.