An SBC (Small Business Corporation) is a private company, close corporation, or co-operative that meets the strict tests in section 12E of the Income Tax Act. Qualifying SBCs are taxed on a progressive scale — 0% on the first R99,000, then 7%, 21%, and a top bracket of 27% (matching the standard rate) only above ~R550k of taxable income.
Eligibility tests include: gross income under R20 million, all shareholders are natural persons, no shareholder holds shares in another company (with limited exceptions), and no more than 20% of receipts can be from "personal services" or investment income.
SBC status also unlocks 100% write-off in the first year for plant/machinery used in a manufacturing process, and accelerated 50/30/20 wear-and-tear on other depreciable assets — a meaningful cash-flow benefit for capital-intensive small businesses.