How to File Turnover Tax: TT03 Return, Payments, and Penalties

To file turnover tax in South Africa, register with SARS before the year of assessment begins, calculate your gross taxable turnover for the year, submit the TT03 return during the filing window that runs from 1 July to 31 January, and settle the liability through two interim payments plus a final payment after assessment.1South African Revenue Service. How to Submit The system replaces income tax, VAT, provisional tax, capital gains tax, and dividends tax with a single return for micro businesses under the R2.3 million turnover threshold.2South African Revenue Service. Turnover Tax

Before You File: Check You Qualify

Your qualifying turnover for the year of assessment must not exceed R2.3 million.2South African Revenue Service. Turnover Tax For individuals the tax year runs from 1 March 2026 to 28 February 2027; for companies it ends on any date between 1 April 2026 and 31 March 2027.3National Treasury. Budget 2026 Tax Guide

Turnover tax is open to sole proprietors, partnerships, close corporations, companies, and co-operatives.2South African Revenue Service. Turnover Tax Professional service providers such as lawyers, accountants, doctors, and engineers are excluded under the Sixth Schedule to the Income Tax Act, along with businesses earning more than a specified share of income from investment returns. If either exclusion applies to you, you file under the standard income tax framework, not the TT03.

Step 1: Register With SARS

You register for turnover tax before you can file a TT03. Registration is done online through the SARS Online Query System (SOQS) or by completing a TT01 application form, which is available for either manual or online submission.4South African Revenue Service. How to Register SARS recommends the SOQS route because it generates an immediate confirmation.

Timing is strict. Registration must happen before the start of the year of assessment in which you want turnover tax to apply. Miss that window and you are taxed under the standard framework for the full year, with no option to backdate. Once you are in, your registration carries forward automatically as long as you stay under R2.3 million and remain compliant with your other tax obligations.

Step 2: Calculate Your Taxable Turnover

Taxable turnover is your gross business income for the year, before any expense deductions. Add every rand of trading income received during the assessment year.

Capital proceeds get separate treatment. Because turnover tax replaces capital gains tax, 50% of the proceeds from selling business assets must be included in the taxable turnover figure. Keep the sale agreements and valuations for any assets you disposed of during the year, because SARS will expect the arithmetic to reconcile.

Cross-check the total against your bank statements and sales records. The TT03 asks for your identification details, business registration number, and the calculated gross turnover split between operating income and capital proceeds.5South African Revenue Service. Annual Return Gaps between what you report and what SARS already sees through third-party data are the fastest route to an audit query.

Step 3: Submit the TT03

The TT03 filing window runs from 1 July to 31 January of the following year, aligned with the annual income tax return season.1South African Revenue Service. How to Submit You can obtain the form by visiting a SARS branch or completing it online.5South African Revenue Service. Annual Return

Two submission methods are available. You can book an appointment at a SARS branch, where an official processes the document and issues a physical acknowledgment. Or you can email the completed form to SARS and keep the sent confirmation as proof of your filing date.5South African Revenue Service. Annual Return After processing, SARS issues an assessment notice showing the tax owed or confirming a nil liability. Store that notice with your business records.

Step 4: Make the Interim and Final Payments

Turnover tax is not paid in one lump sum. SARS requires two interim payments during the year and a final settlement after assessment:2South African Revenue Service. Turnover Tax

  • First interim payment, due on the last business day of August, submitted with the TT02 Payment Advice form.
  • Second interim payment, due on the last business day of February, also on a TT02.
  • Final payment, due after SARS processes your TT03 and issues the assessment.

If a due date falls on a weekend or public holiday, the deadline moves to the last business day before it. Payments can be made at approved banks or by internet banking. Quote both the Beneficiary ID and your unique Payment Reference Number (PRN) so SARS allocates the funds to the right tax account.6South African Revenue Service. FAQ: What Is a Payment Reference Number (PRN)? A wrong PRN is a common error and leaves the payment sitting in a holding account while your turnover tax balance still shows as outstanding.

Late payments attract interest at the prescribed rate published on the SARS website.7South African Revenue Service. Tables of Interest Rates Set calendar reminders for August and February rather than relying on the final assessment to prompt you.

How Much You’ll Pay

Turnover tax uses a progressive rate structure starting at zero and topping out at 3%. The brackets for the 2026/2027 year of assessment are:3National Treasury. Budget 2026 Tax Guide

  • R1 to R600,000: 0%.
  • R600,001 to R950,000: 1% of the amount above R600,000.
  • R950,001 to R1,400,000: R3,500 plus 2% of the amount above R950,000.
  • R1,400,001 and above: R12,500 plus 3% of the amount above R1,400,000.

On a taxable turnover of R800,000, for example, you pay 1% on the R200,000 above the R600,000 threshold, giving a bill of R2,000 for the year. Use this table to estimate each interim payment.

Records to Keep After Filing

Keep all records supporting your turnover tax return for at least five years from the date you submit the return.8South African Revenue Service. Record Keeping That covers bank statements, invoices, sale agreements for disposed assets, and anything else supporting the turnover figure. Physical or digital copies are both acceptable.

If you never submit a return for a given year, the five-year clock never starts, and your retention obligation continues indefinitely until you file. If SARS audits you or you lodge an objection, records must be kept until that process concludes, even if that runs past five years.8South African Revenue Service. Record Keeping

What Happens If You File Late or Understate

SARS applies two distinct types of penalties and they can stack.

Administrative non-compliance penalties for late submission range from R250 to R16,000 per month, scaled to your taxable income, and accumulate for every month the return remains outstanding.9South African Revenue Service. Request for Remission of Administrative Non-compliance Penalty

Understatement penalties scale with conduct:10South African Revenue Service. Guide to Understatement Penalties

  • Substantial understatement: 10% of the shortfall in standard cases, up to 20% if obstructive or repeated.
  • Reasonable care not taken: 25%, or 50% if obstructive or repeated.
  • No reasonable grounds for tax position: 50%, or 75% if obstructive or repeated.
  • Gross negligence: 100%, or 125% if obstructive or repeated.
  • Intentional tax evasion: 150%, or 200% if obstructive or repeated.

Voluntary disclosure sharply reduces these percentages. If you come forward before SARS notifies you of an audit, most categories drop to 0%. Even after audit notification, voluntary disclosure roughly halves the penalty. If you find an error after filing, correct it through disclosure rather than waiting.