Tax Law South Africa

GUIDE Tax Law

Author: Jan-Hendrik Delport (BKD)

Series: Doing Business in South Africa
Pocket Guide V

Published: November 2018

Soft Cover, 154 pages

Table of Content

CONTENTS
INCOME TAX RATES 2 DIFFERENT TYPES OF ENTITIES
TAX REBATES 2 Small business corporations 25
TAX THRESHOLDS 2 Personal service providers 26
MEDICAL SCHEME TAX CREDITS 2 Micro businesses 27
CORPORATE TAX RATES 2 Trusts 29
WEAR AND TEAR ALLOWANCES 3 Bodies corporate 32
RESIDENTS Public Benefit Organisations 32
Residency test 4 Recreational clubs 32
South African interest 4 OTHER TAXES
Foreign interest 4 Employees tax 33
South African dividends 4 Remuneration 33
Vesting of equity instruments 4 PAYE on employee share schemes 34
Capital distributions on restricted 5 Dividend tax 34
equity instruments Value-added tax 37
Dividends i.r.o employment 5 Donations tax 43
Foreign dividends 5 Estate duty 44
Tax-free investments 6 Transfer duty 46
Bursaries and scholarships 6 Securities transfer tax 47
Restraint of trade receipts 7 Skills development levies 47
Foreign trading activities 7 Unemployment insurance fund 47
Foreign employment 7 Workmen’s compensation 48
Pensions and annuities 7 Provisional tax 48
Income protection policies 7 Capital gains tax 51
NON-RESIDENTS GENERAL
Business income 8 Learnership allowance 56
Remuneration and fees 8 Employer-owned life policies 57
Rental income on fixed property 8 Research and development 58
Interest received 8 Special economic zone incentive 59
Royalties 9 Employment tax incentive 60
Dividends 9 Government grants 62
Foreign entertainers 9 Venture capital companies 62
Sale of immovable property 10 In Duplum rule 63
Service fees paid to non-residents 10 Bargaining councils 63
ALLOWANCES TAX ADMINISTRATION MATTERS
Travelling and car allowance n TaxOmbud 63
Reimbursive travel allowance n Tax compliance status 63
Subsistence allowance li Illegal use of the word SARS 64
FRINGE BENEFITS Request for relevant material 64
Acquisition of an asset li Persons who may be interviewed 65
Right of use of an asset 12 Assistance during field work 65
Use of company owned vehicle 13 Inquiry order 65
Insurance policies 14 Reduced assessments 65
Medical aid contributions 14 Objection against an assessment 66
Cost relating to medical services 17 Issuing of assessments 66
Residential accommodation 17 Liability of third parties 67
Holiday accommodation 18 Refunds and interest 68
Free or cheap services 19 Evasion of tax, fraud or theft 68
Low interest or interest free loans 19 Delivery of documents 69
Payment of employee’s debt 19 Bank account holds 69
Uniform allowance 20 PENALTIES AND INTEREST
Free subsidised meals 20 Administrative penalties 69
Contributions to retirement funds 20 Percentage based penalty 70
Share incentive schemes 20 Remittance of penalties 70
DEDUCTIONS FOR INDIVIDUALS Understatement penalty 71
Retirement fund contributions 21 Request for interest remittance 72
Donations 21 VOLUNTARY DISCLOSURE 72
Travel expenses 21 EXCHANGE CONTROL ALLOWANCES 73
Home study expenses 22 INTEREST RATES
RETIREMENT BENEFITS Prime interest rate 75
Annuities 23 Official interest rates 75
Retirement lump sum benefits 23 RETENTION OF RECORDS
Retirement withdrawal benefits 23 Companies 76
Severance benefits 24 Close corporations 76
Withdrawal from retirement 24 Tax records 76
annuity fund BUDGET SPEECH PROPOSALS 77
Joining a new fund 25 IRP5 CODES 78