Sars administers a wide range of legislation in terms of part 1 and schedule 1 to the south african revenue service act. Section 9c of income tax act essentially contains a safe harbour provision in terms of which the gains from the disposal of qualifying shares will be deemed to be of a capital nature if the owner held such shares for a continuous period of 3. Running through the maze of tax consequences for corporate. Some guidance 1introduction for income tax purposes, the distin ction between whether an amount or expenditure is of a capital nature or not is decisive. Estate duty is the name given to inheritance tax in south africa, which is a property tax payable on all estates with a net worth in excess of r3,500,000. Amend section 6a, insert section 6b, delete section 18 i. Mar 01, 2020 every year, sars announces its tax season, a period during which you are required to submit your annual income tax return. Register for efiling and you will be automatically registered for personal income tax and receive a tax reference number. The section treats interest which is incurred by a company during a year of assessment tax. Cliffe dekker hofmeyr section 9c safe harbour rules expanded. Dividends tax on 1 april 2012 the new dividends tax dt replaces secondary tax on companies stc. Note that the various amendment acts are available in pdf format at sars. Commissioner for the south african revenue service v.
Proposal in view of the above, it is proposed that the following amendments be made in the act to regularise the tax treatment of funds managed by bargaining councils. Tax administration act 28 of 2011 southern african legal. Section 312 gives the commissioner the power to adjust the consideration of a transaction to an armslength price for. Definitions chapter 2 generaladministration provisions part a 10 in general 2. When addressing the related parties definition, the south african legislation refers to the concept of a connected person that is defined in section 1 of the sa income tax act and further guidance is provided for in interpretation note 67 to the sa income tax act. Notes on south african income tax is written by phillip haupt, a leading tax consultant in south africa. Hedron publishers of notes on south african income tax. Income received by or accrued to a nonresidents from a source within south africa the income tax treatment of overseas income application of oecd model double tax treaty to given situations explanation of antiavoidance regulations double taxation relief available to individuals.
Laws of kenya income tax act chapter 470 revised edition 2018 2012 published by the national council for law reporting with the authority of the attorneygeneral. Republic of south africa explanatory memorandum on the taxation laws amendment bill, 2012 12 november 2012 draft w. Government gazette, 4 july 2012 tax administration act, 2011 e it enacted by the parliament of the republic of south africa, as follows. Act to provide for the effective and efficient collection of tax. Amendment of section 6b of act 58 of 1962, as inserted by section 7 of act 22 of 2012. Set out below are some of the more common questions that affected parties are asking. Sa budget 202021 export of dual listed securities proposed income tax amendments sa budget 202021 proposal to prevent tax avoidance through the use of loop structures utilisation of trusts as a planning tool remains under the microscope. While section 11a provides positively for what may be deducted, section 23g provides negatively for what may not be deducted. The income tax act restricts pbos from using their resources to directly or indirectly support, advance, or oppose any political party income tax act section 303h. Taxation is a means whereby the state collects funds to pay for public services. Over many years south african courts have developed a number of or adopted principles for determining whether expenditure is of a capital or revenue nature. Foreign dividends are subject to income tax in the hands of a south african shareholder, but exempt if the shareholder holds at least 10% of the. Introduction to taxation taxes are the price we pay for a civilized society.
This is a general guide providing an overview of the most significant tax legislation administered in south africaby the commissioner for the south african revenue service sars, namely, the income tax act. Tax today september 2012 a monthly journal published by pwc south africa providing informed commentary on current developments in the tax arena, both locally and internationally. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. Capital gainslosses are included in taxable income and taxed at the standard corporate income tax rates. Income tax in south africa was first introduced in 1914 with the introduction of the income tax act no 28, an act that had its origins in the new south wales act of 1895. Amended by south african revenue service act 34 of 1997. Republic of south africa updated 10 april 2018 resident or to another connected resident, the licensor is a nontaxable person and the licensee and resident connected persons in relation to the. There are 56 dtas concluded by south africa where the definition of interest does not include amounts that are deemed to be interest under the domestic law. With acts you are guaranteed the latest and most up to date resource for your legislative needs. Section 24i deferral of exchange gains and losses may 2015 issue 188.
Income tax act, 1962 customs and excise act, 1964 value. Schedule amendment of skills development act south african revenue service act, no. The general deduction formula is contained in section 11a read with section 23g of the income tax act 58 of 1962 the act. Despite the general rule above, certain specific matters albeit minor consequential amendments have. The tax season for 2019 opens on 1 august 2019 for branch filers and 1 july 2019 for efilers. Arrangement of sections sections chapter 1 definitions 5 1. Schedule 3 amendment of legislation affected by this act tax administration act, no. Section 31, as it reads below, is effective from 1 april 2012 and applicable in respect of years of assessment commencing on or after that date. According to pwcs paying taxes report for 2012, the introduction of electronic. Income tax s 12 of eighth schedule of act 58 of 1962 deemed disposal of assets double tax agreement between the republic of south africa and luxembourg meaning of and effect article 4 includes within its ambit capital gains derived from the alienation of all.
South africa has recently amended section 31 of the income tax act 58 of 1962. Tax administration act 28 of 2011 south african government. South african income tax guide for 201220 sa tax guide. Income tax act 58 of 1962 south african government. South african institute of chartered accountants integritax newsletter income tax and vat acts online. Have a formal employment contract with a foreign employer, are a south african tax resident, spend at least 183 days of a consecutive 12month period outside of sa rendering services to your foreign employer, and. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website. Glacier provides access to investment products that are tailored to suit clients. Subject to certain exceptions, local dividends are fully exempt from income tax in the hands of the recipient. Charting the changes, 21 years of vat in south africa vat 21 pwc. South african income tax tables 2012 south african tax guide. However, transfers of villas or idle lands except when they were acquired during the period from march 16. Income tax act 90 of 1988 income tax amendment act 99 of 1988. Unemployment insurance contributions act 4 of 2002.
We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. The form of tax that people generally associate with the concept of income tax is normal income tax. As further alluded to above, these group relief provisions go much further than merely to negate income tax effects it also extends to the other applicable ancillary taxes see specifically s 825 of the valueadded tax act 89 of 1991, s 81 of the securities transfer tax act 25 of 2007 and s 91 of the transfer duty act 40 of 1949. Income tax act 21 of 1995 income t ax act 36 of 1996 revenue laws amendment act 46 of 1996 general law amendment act 49 of 1996 income tax act 28 of 1997 south african revenue service act 34 of 1997. Sars administers a wide range of legislation in terms of part 1 and schedule 1 to the south african revenue service act, 1997. Section 9c of the income tax act came into operation on 1 october 2007 and applies to the disposal of qualifying shares on or after that date. Site and paye are the two elements of employees tax. At least 60 of these days are continuous or unbroken. September 2012 5 open to contracting states to extend the definition in a dta by reference to the domestic law should they so desire. E it enacted by the parliament of the republic of south africa, as follows.
The income tax act, 1981 act 24 of 1981 of the national assembly of south west africa, hereinafter referred to as the act, shall, subject to the provisions of this act and in so far as the firstmentioned act applies to natural persons, apply also to. The income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website. In this way, income tax is collected as soon as the taxpayer has earned the income and is offset against the final income tax that is due on assessment. In addition, dividends paid by south african resident companies are generally not subject to income tax or capital gains tax. Taxation in south africa 2019 i taxation in south africa 201 9. Receipts and accruals of a capital nature do not form part of the gross income definition the. It is foreign income which may not be subject to tax if you. In 2012 financial year south africa had a tax togdp ratio of 25. The following acts are examples of the primary legislation sars administers. South african revenue service makes changes to 2014. To consolidate the law relating to the taxation of incomes and donations. South african law does not restrict the political activities of organisations that are not approved as pbos, however.
Nonprofit law in south africa council on foundations. The act has gone through numerous amendments with the act presently in force is the income tax act no 58 of 1962 which contains provisions for four different types of income tax. South african income tax capital gains tax corporate income tax customs duties dividend tax donations tax estate duty tax excise duties and levies pay as you earn personal income tax. The income tax return which should be completed by individuals is known as the itr12 form. Dividends are tax exempt if the beneficial owner of the dividend is a south african company, retirement fund or other exempt person. The tax is to be withheld by companies paying the taxable dividends or by regulated intermediaries in the case of dividends on listed shares.
The motivation behind this seems to have been, in part, the fact south african resident companies are not subject to dividends tax. Handbook which obviously only deals with income tax acts, for income tax. However, see comments below in respect of wht on dividends in the form of a dividends tax. Doubtful debt allowances the latest set of proposed changes to section 11j of the income tax act seeks to remove south african revenue service sars discretion, in part to reduce the sars administrative burdenbut at what cost to the taxpayer. Tax paid in the foreign country generally may be offset against the south african tax payable. Visit our youtube channel for easy help on everything digital. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria. Securities transfer tax administration act 26 of 2007. In 2015, various discretionary powers afforded to the commissioner of sars in the context of assessment provisions contained in the income tax act, no 58 of 1962 act were removed in order to formalise the move towards income tax selfassessment in south africa. Thus, any profit made when an asset is sold it is subject to the same rates as south african income tax. Section 9d initially only taxed passive income but later the scope was extended to include active income also. The tax rate in south africa for estate duty is 20%. Sars means the south african revenue service established by section 2.
But the income tax act is also the source of a number of other taxes that, although they have their own particular names, still form part of the income tax system. South africa highlights 2019 deloitte united states. October 2012 with only the provisions relating to interest being deferred to a date yet to be effected by notice. The types of publications covered by the term government publications will include green and white papers, bills, statutes or acts, amendments to acts, regulations and government notices, all of which are published in the government and provincial gazettes. Other income from a south african source is subject to income tax and may be subject to provisional tax. Cliffe dekker hofmeyr tax treatment of doubtful debts to be. All tax laws should conform to the maxims of taxation equity 1. Through analysis and comment on new law and judicial decisions of interest, it assists business executives to identify developments and trends in tax law and revenue. A foreigners south africansourced employment income is subject to monthly employees tax if paid by an employer who is resident in south africa. Proposed repeal of foreign employment income exemption july 26, 2017 in brief south african residents are entitled to an exemption for remuneration received or accrued with respect to services rendered outside south africa pursuant to section 101oii of the income tax act, 1962 act no. Income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website. Phillip haupt deals with complex tax problems, and works predominantly with audit firms, law firms, businesses and high net worth individuals. Although capital expenditure may be incurred in the production of income and in. Taxation laws amendment act 22 of 2012 south african government.
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