Corporate Tax in South Africa
- 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.
|Corporate tax is payable by South African companies on their worldwide
|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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