Corporate Tax in South Africa

Overview by
Tax Base For Resident and Foreign Companies
Residents and locally controlled companies are taxed on worldwide income, where as foreign companies (meeting certain criteria are considered non-resident for tax purposes ) are taxed on South African-source income and capital gains on immovable property in South Africa.

Tax Rate

Corporate tax is payable by South African companies on their worldwide
taxable income
Although dividends are exempt from tax in the recipient’s hands, an Secondary tax  applies 10%
Tax Rate For Foreign Companies
33% in case of a branch office of a foreign company. However, branches offices are exempt from the STC in order to offset the higher tax rate.
Capital Gains Taxation
Charged at the normal income tax rate on 50% of the gain i.e. at 14.5%.
Main Allowable Deductions and Tax Credit
Motor vehicle expenses, legal expenses, medical and dental expenses, bad and doubtful debts, and contributions to pension and provident funds and retirement annuities. Lease premiums may be written off for the period of the lease. Municipal rates may also be deducted from taxable income.
Other Corporate Taxes
Capital duty, Payroll tax, Real property tax, Social security, Stamp duty, Transfer tax, Gift tax.

Country Comparison For Corporate Taxation

  South Africa Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 9.0 37.3 11.0 16.0
Time Taken For Administrative Formalities (Hours) 200.0 315.1 187.0 215.0
Total Share of Taxes (% of Profit) 30.5 68.0 46.8 48.2

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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