South Africa Tax Guide

South Africa

Currency: South African Rand

Foreign Exchange Control: None on non-residents. Exchange controls over residents and transactions between residents and non-residents.

Accounting Principles: IFRS. Financial statements prepared annually.

Business Entities: Principally, profit or non-profit companies. Within profit companies there are four different types: private company, personal liability company, state-owned company and public company. Branches of foreign companies are required to register as external companies.

Corporate Taxation

Residence: If incorporated or effectively managed in South Africa.

Basis: Residents are taxed on worldwide income. Non-residents are taxed on certain types of Canadian-source income and capital gains on assets of a permanent establishment in South Africa.

Rate: 28%

Foreign Tax: Foreign tax paid on income may be credited against South African tax on the same profits limited to the South African tax payable. Other limitations also apply.

Other: Preferential tax rate for small business corporations, R&D deductions, urban development and infrastructure allowances, film allowances etc.

Tax Year: Accounting year

Personal Taxation

Residence: Residents taxed on worldwide income. Non-residents taxed on South African-source income and capital gains from immovable property and permanent establishments (resident if spend > 91 days in a calendar year and present for an aggregate of 915 in the 5 preceding years).

Rate: Progressive up to 40%

Capital Gains: 33% of gains are included in taxable income

Other: Stamp duty: 0.25% on transfer of shares

Real property tax: Municipal authorities levy taxes on the occupation of real property.

Inheritance tax: 20% on estates over ZAR 3.5m, deductions are available.

.Social Security: Employer 1% and employee 1%

VAT: Federal rate 5%. Provinces also levy charges.

Member Firm: Sprigg Abbott Incorporated

Email:
David Barnes: david@sprigg.co.za