Subject to certain exceptions, local dividends are fully exempt from income tax in the hands of the recipient. Each individual is taxed separately in south africa, with no distinction between male and female, or between married and single people. South african income tax guide for 201220 sa tax guide. However, due to unforeseen circumstances the contractual obligations may not end up being fulfilled. Cases and materials 4ed outdated material has been removed and the most important of new cases have been selected for inclusion in this edition. 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. Amendment of section 1 of act 40 of 1949, as amended by section 11 of act 80 of.
Amendments to s66 ita in respect of the period covered by the income tax return in the year when a saresident taxpayer becomes nonresident s2723. South african income tax rates from 2008 to 2014 sa tax guide. 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. Section 11a of the income tax act and the deductibility of. 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. Background south africa s income tax system contains an incentive aimed at stimulating on the producti of films within the republic. In terms of the bill, the act will be amended to allow the first r1 million of foreign remuneration in respect of a year of assessment to be exempt from tax in south africa if the person is outside of south africa for more than 183 days and for a continuous period of longer than 60 days during a 12 month period. Dividends received by individuals from south african. The south african law of trusts south africa has taken over most, but not all, of the concepts and principles of the english law of trust, and has added some refinements of its own. Income tax is a tax levied on all income and profit received by a taxpayer which includes individuals, companies and trusts.
Market access information including south africa import duty and south africa custom duty information. Notice in terms of section 12t of income tax act, 1962, notice no. Paragraph 78 of schedule 1 is deemed to have come into operation on 1 january 2011 and applies in respect of premiums incurred on or after that date. The research will address the income tax, capital gains tax, valueadded tax and other tax consequences that may arise with restructuring a group, specifically analysing a south african tax resident company, a. University of cape town,faculty of commerce,department of finance and tax, 2016 cited yyyy month dd. Evaluation of the source rules as contained in section 9 of the south african income tax act as relating to software in the context of the digital economy. Evaluation of the source rules as contained in section 9. For income tax purposes, this guide has been updated to include the tax administration laws amendment act 22 of 2018, the taxation laws amendment act 23.
Amendment of section 12c of the income tax act, 1962 the proposed amendment deletes a reference to an obsolete subsection. Sections topics 10 tax liability and payment 151 161 taxpayers. List of all incomes exempted from income tax, list of. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. To consolidate the law relating to the taxation of incomes and donations. Income tax act 28 of 1997 south african revenue service act 34 of 1997. The general deduction formula is contained in section 11 a read with. Income tax act and subsidiary legislation revised edition showing the law as at 31 december 2009 this is a revised edition of the law, prepared by the law revision commissioner under the authority of the law revision act, cap. Evaluation of the source rules as contained in section. Successive corporate reorganisation transactions a number of advance tax rulings have recently been released by the south african revenue service sars relating to the corporate tax rollover relief rules contained in s41 to 47 of the income tax act, no 58 of 1962 act. The following acts are examples of the primary legislation sars administers. The taxpayer donates a profitmaking investment to his trust and at yearend the trustees of the trust distribute the profits from this investment to a beneficiary who works and lives. A tax residents income is taxed in south africa, regardless of the source of the income.
Income tax act, 1914 based on new south wales act, 1895 income tax consolidation act, 1917 income tax act, 1925 income tax south africa income tax act, 1941 income tax act, 1962. Under south african law a resident is defined by the income tax act, 1962, as either an individual who meets thephysical presence test an or individual who is ordinarily resident in south africa under south african common law. For income tax purposes, this guide has been updated to include the tax administration laws amendment act 22 of 2018, the taxation laws amendment act 23 of 2018 and the. Amendment in respect of foreign employment income exemption.
South african tax guide taxation made easy by nyasha musviba. Explanatory memorandum organisation of south african law. The first major amendment to the income tax law since 1979. Subparagraphs g, h, i and j of paragraph 60 of schedule 1 come into operation on the date on which part viii of chapter ii of the income tax act, 1962, comes into operation. Tax administration act updated to 17 january 2019 act 28 of 2011 gon 591, g. The most recent ruling in this regard is binding private ruling. Inter alia, south africa has enacted the trust property control act no 57 of 1988 to add some uniquely south african elements to our law of trusts.
Arrangement of sections sections chapter 1 definitions 1. Income tax act 90 of 1988 income tax amendment act 99 of 1988 income tax act 70 of 1989 legal succession to the south african transport services act 9 of 1989. Lump sum benefits upon retirement or death until the february 2007 budget announcement of the abolishment of the tax on retirement funds, the south african retirement fund tax system could. Income tax act 19454 kb act current to 20200421 and last amended on 20200411. No fewer than 41 clauses, including amendments to cap. For 30 years notes on south african income tax has been the leading tax textbook and tax reference book in south africa. Key revenue sources a brief history of income tax and vat.
The form of tax that people generally associate with the. Tax administration act 28 of 2011 southern african legal. May 04, 2020 list of all incomes exempted from income tax, list of exempted incomes 2020. The form of tax that people generally associate with the concept of income tax is normal income tax. However, see comments below in respect of wht on dividends in the form of a dividends tax. Section 78 deems this income to be taxable in the hands of the taxpayer. Personal income taxation and the struggle against inequality. Clause 12 amendment of section 12e of the income tax act, 1962 the proposed amendment places small business cooperatives on par with small business companies as a matter of consistency with prior year amendments. South africa, the part of a taxable income3 that exceeds r701 300 this is the highest tax bracket is currently taxed at the top rate 41%. Knowing the basic principles of taxation and the associated tax cases, is a prerequisite for effective tax planning. Returns to be submitted by a person in terms of section 25 of the tax administration act, 2011 act no. We are the leading resource for freely available legislation in south africa and are used.
South african institute of chartered accountants integritax newsletter 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 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. Find full list of all incomes who completely exempt from income tax. 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. The constitution of the republic of south africa, 1996 everyone has the right to administrative action that is. Income tax act act 17 of 1966 in force 1st january, 1967. The main reason why section 45 was suspended was to allow national treasury to put in place measures to curb the perceived erosion of south africas tax base through numerous debt funded private equity transactions that occurred utilising the provisions of section 45 to avoid triggering any taxation. Tax administration act, 2011 gg 35491 of 4 july 2011 the act was implemented by proclamation with effect from 1 october 2012, save for the exclusions listed in the schedule to the proclamation, which should be read. South african budget 201718 budget speech summary and tax proposals.
A person will be considered to be ordinarily resident in south africa, if south africa. From 1 april 2012 dividends received from domestic companies are subject to a final withholding tax of 15% but will be exempt from normal tax. South african residents account for tax on their worldwide receipts and accruals, if they are tax resident on the basis of being ordinarily resident or through the physical presence test. Effective from 1 march 2011 late or underpayment of tax 8. Individuals are deemed to be resident in south africa for tax purposes if they normally live in the country or are in south africa for more than 183 days a year. The incentive was previously contained sectionunder 24f. Annexure e part i of the ninth schedule to the income tax. Income tax amendment act 1993 amended by income tax act 1 of 1993.
It has set the standard for others to follow and emulate. South african income tax act 58 of 19 62 the south african income tax act. Act 5 of 2001 is available in pdf format from the sars web site at sars. These provisions were introduced in the act to protect the south african tax base from the effects of the relaxation of the exchange control provisions that came into effect on 1 july 1997. The section treats interest which is incurred by a company during a year of assessment tax. All income tax information contained in this document is summarized by kpmg services pty limited, the south africa member firm affiliated with kpmg international cooperative kpmg international, a swiss entity, based on the income tax act, no 58 of 1962 as amended. Tax administration act 28 of 2011 south african government. With acts you are guaranteed the latest and most up to date resource for your legislative needs. Always bear in mind that deductions can only be claimed. 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. Finance in a calabash introduction income tax is a charge levied on income, pro. Pdf south african income tax implications for income earned. Schedule 3 amendment of legislation affected by this act tax administration act, no.
In terms of section 101oii of the income tax act, 1962 a ct no. Reserve bank repurchase rate plus 1% from 1 march 2011. In 1997, however, provisions were introduced in the act to tax residents of the republic on their worldwide passive investment income. Income tax act 58 of 1962 south african government. The 2011 edition the 30 th edition will be available on the 10 of january 2011, and will be couriered when.
Broadly speaking, tax residence can be established through either. The fourth schedule to the income tax act requires three elements to be. Tax administration act 2018 south african institute of. After being reduced in 2000 and 2001 from 45 to 40%, this tax rate was again. Notes on south african income tax 2011 order formv2. Be it enacted by the parliamentof the republicof south africa, as follows. South africa fita offers extensive information and link resources for south africa and more than 80 other different country profiles. Tax exemption guide for public benefit organisations in south africa issue 4 61 annexure e pa rt i of the ninth schedule to the income tax act, 1962 ninth schedule public benefit activities section 30 part i w elfare and h umanitarian 1.
Latest income tax slab rates, today we provide complete list of all incomes exempt from income tax. This sars pocket tax guide has been developed to provide a. Persons not required to submit an income tax return. South africa information on residency for tax purposes. Act to provide for the effective and efficient collection of tax. The concept of residence and ordinary residence and its relevance to 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. These circumstances may commonly arise for matters. Sars administers a wide range of legislation in terms of part 1 and schedule 1 to the south african revenue service act, 1997. This includes employers, employees, individuals, companies, close corporations and trusts. This person will most probably be taxed at a lower marginal tax rate in south africa. 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. Tbe rates of normal tax to be levied in terms of section 52 of the income tax act, 1962 act no. Section 7 of the income tax act, 1962, is hereby amended by the substitution in subsection 11 for. Republic of south africa updated 10 april 2018 republic of south africa transfer pricing country profile updated april 2018 summary reference the arms length principle 1 does your domestic legislation or regulation make reference to the arms length principle.
Like agriculture income completely exempt under sec 10 1 etc. South african income tax tables 2011 south african tax guide. The result is that the individual may be required to repay a portion of the benefit received back to the employer. All these people have an obligation to comply with. Refund of tax on successful objection, appeal or where an appeal was conceded by sars 8.
As from 1 january 2016, section 12b of the income tax act south africa was amended from a threeyear 50% 30% 20% accelerated depreciation allowance on renewable energy to an even quicker depreciation allowance of just one year 100%. A person may receive remuneration benefits such as maternity leave or retention bonuses by virtue of their employment contact. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. It is the national governments main source of income and is imposed by the income tax act no. An evaluation of income tax incentives available to the south. Tax cases play a large part in the interpretation of tax legislation. Does section 7 of the income tax act form part of your. 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. Apr 24, 2017 the taxpayer claimed in his income tax returns for the 2010, 2011 and 2012 years of assessment that certain interest incurred on the mortgage bond was incurred in the production of interest income received from the law firm, but the south african revenue service sars disallowed these deductions, to which the taxpayer then objected.