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South Africa tax highlights
South Africa Tax indicators Fiscal year end
Residents
Non-residents
Companies: Financial year end; Individuals: February
Companies: Financial year end; Individuals: February
Income tax
28%
28%
Tax on capital gains
Maximum effective tax rate – Companies: 18.6%; Trusts 26.7%; Individuals 13.3%
Maximum effective tax rate – Companies: 18.6%; Trusts: 26.7%; Individuals: 13.3%
Value-added tax
14%
14%
Individual marginal tax rate (max)
40%
40%
Basis of taxation
Worldwide
Source & deemed source
Dividends1
15%1
15%1
Interest2
n/a
n/a
Royalties
n/a
12%2
Exchange controls
Exist
Exist
Thin capitalisation
Exists with a 3:1 debt-to-equity ratio3
Transfer pricing
Cross-border transactions between connected parties should be conducted at arm’s length.
Double tax treaties
In Africa: Algeria, Botswana, Egypt, Ethiopia, Ghana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Rwanda, Seychelles, Swaziland, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe.
Companies
Individuals
Withholding tax
Rest of the world: Australia, Austria, Belarus, Belgium, Brazil, Bulgaria, Canada, (People’s Republic of) China, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Korea, Kuwait, Luxembourg, Malaysia, Malta, Mexico, Netherlands, New Zealand, Norway, Oman, Pakistan, Poland, Portugal, Romania, Russian Federation, Saudi Arabia, Singapore, Slovak Republic, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, Ukraine, United Kingdom and United States of America.
South Africa tax highlights PwC
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Tax indicators Notes
South Africa tax highlights PwC
Residents
Non-residents
(1) The new dividend (withholding) tax of 15% replaces Secondary Tax
on Companies (STC) with effect from 1 April 2012 unless reduced by a tax treaty. (2) Interest withholding tax of 15% is effective from 1 January 2013. The Minister of Finance, in his 2012 Budget Speech, has proposed a uniform tax rate of 15% for royalties, however, this has not been passed into law and would be subject to the operation of tax treaties. (3) The thin capitalisation (financial assistance) test will become an arm’s length test applicable to financial years commencing on or after 1 April 2012. There is currently no guidance from the Revenue authorities on whether the new safe harbour will be applied.
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Contacts South Africa Elandre Brandt
: elandre.brandt@za.pwc.com : +2711 797 5822
Africa Tax and Investment Desk – Australia Brisbane Peter Dunn
: peter.dunn@au.pwc.com : +61 7 3257 5670
Melbourne Peter Collins
: peter.collins@au.pwc.com : +61 3 8603 6247
Perth Rob Bentley
: robert.k.bentley@au.pwc.com : +61 8 9238 5202
Sydney Tino Saladino
: modestino.saladino@au.pwc.com : +61 2 8266 2037
© 2012 PricewaterhouseCoopers. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers a partnership formed in Australia, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This publication is a general summary. It is not legal or tax advice. Readers should not act on the basis of this publication before obtaining professional advice. The information contained in the publication is based on our interpretation of the existing legislation as at 31 December 2011. Whilst we will have taken every care in preparing the publication, we cannot accept responsibility for any inaccuracies that may arise.