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South Africa

Taxes

If you want to do business in South Africa, this article will educate you on the tax laws for a (PTY) Ltd which is the most common company type in South Africa.

South Africa taxes corporate worldwide income, whether accrued onshore or offshore. The prevailing approximate tax rate for offshore income, from our research, and these things do change, is 28%. The country may have certain exemptions to bring in income earned outside the borders. The highest corporation tax rate is 28%. This ranks South Africa as 130th overall with regards to CIT globally.

The value added tax (VAT) rate is 14.00%, which ranks South Africa as 76th overall with regards to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 1% to the equivalent of a social security fund and an employee will contribute 1%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 50hours. Contributing to this is the number of yearly labor tax payments, which is 2 in ZA.

Thin capitalization standards are not officially enacted. Thin capitalisation refers to any sort of restrictions on given company with respect todebt-to-asset ratios.
Dividends distributed to a resident shareholder are generally subject to withholding tax of 15%, but certain exemptions may apply. Foreign dividends received are usually taxed at an effective tax rate of 15%, but a tax credit may apply for foreign tax paid. However, a participation exemption for dividends received by foreign companies may apply when shareholder holds more than 10% of shares and voting rights. Dividends are distributions of a company's earnings, established by the board of directors, to a class of its shareholders. Dividends can be issued as stock, cash, or property.
80% of Capital Gains are included in taxable income and subject to Corporate Income Tax standard rate, which makes an effective tax rate of 22.4%. A Participation exemption may apply for capital gains from the disposal when shareholder owns at least 10% of shares and voting rights of a foreign company more than 18 months. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 15%. This means that the tax authorities expects (PTY) Ltd 's to pay tax on 15% of interests remitted abroad. The dividends withholding tax rate is 15%. Which means that the relevant tax authorities expects companies to pay tax on 15% on dividends distributed abroad. The royalties withholding tax is 15%. This should be interpreted usually that the taxman expects to legal entities automatically withhold 15% of royalties paid to non-residents. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in South Africa. There are inheritance, real property and transfer taxes in South Africa. We are aware of popular and well known research and development tax incentives in this country.

The above is not tax or legal advice for your particular facts and circumstances. Incorporations.io can refer you to an accountant in South Africa who can answer all your questions. Ready to get started? Click incorporate now if you are in a hurry, or press the free consultation button above.

Country details

South Africa
ZAR
Pretoria
Africa
Zulu, Xhosa, Afrikaans, nso, English (South Africa), Tswana, st, Tsonga, ss, Venda, nr
49,000,000

Tax treaties

Country Type Date Signed
Ethiopia DTC  2004-03-17
China DTC  2000-04-25
Russian Federation DTC  1995-11-27
Liberia TIEA 2012-02-07
Jersey TIEA 2011-07-12
Hungary DTC  1994-03-01
Thailand DTC  1996-02-12
Norway DTC  1996-12-02
Singapore DTC  1996-12-23
Costa Rica TIEA 2012-10-27
Tanzania DTC  2005-09-22
Netherlands DTC  2005-10-10
Belgium DTC  1995-02-01
Croatia DTC  1996-11-18
Germany DTC  1973-01-25
Denmark DTC  1995-06-21
Iran DTC  1997-11-03
Rwanda DTC  2002-12-05
Chinese Taipei DTC  1994-02-14
Japan DTC  1997-03-07
Swaziland DTC  2004-01-23
Finland DTC  1995-05-26
Lesotho DTC  1996-07-24
Bulgaria DTC  2004-04-29
Chile DTC  2012-07-11
Cook Islands TIEA 2013-10-25
Turks and Caicos Islands TIEA 2015-05-27
Sierra Leone DTC  1968-11-21
Indonesia DTC  1997-07-15
Cyprus DTC  1997-11-26
Botswana DTC  2003-08-07
Gibraltar TIEA 2012-02-02
Qatar DTC  2015-03-06
Samoa TIEA 2012-07-26
Canada DTC  1995-11-27
Seychelles DTC  1998-08-26
Malawi DTC  1971-05-03
Luxembourg DTC  1998-11-23
Egypt DTC  1997-08-26
Kenya DTC  2010-11-26
Korea, Republic of DTC  1995-07-07
Guernsey TIEA 2011-02-21
New Zealand DTC  2002-02-18
Mozambique DTC  2007-09-18
Cameroon DTC  2015-02-19
Belarus DTC  2002-09-18
Monaco TIEA 2013-09-23
Ireland DTC  1997-10-07
Australia DTC  1999-07-01
Namibia DTC  1998-05-18
Bahamas, The TIEA 2011-09-14
Argentina TIEA 2013-08-02
Zambia DTC  1956-05-22
Greece DTC  1998-11-19
Saint Kitts and Nevis TIEA 2015-04-07
United Kingdom DTC  2002-07-04
Dominica TIEA 2012-02-07
Brazil DTC  2003-11-08
Malta DTC  1997-05-16
Gabon DTC  1995-03-22
Kuwait DTC  2004-02-17
Tunisia DTC  1999-02-02
Cayman Islands TIEA 2011-05-10
Bermuda TIEA 2011-09-06
Switzerland DTC  2007-05-08
Slovakia DTC  1998-05-28
Saudi Arabia DTC  2007-03-13
India DTC  1996-12-04
Belize TIEA 2014-05-06
San Marino TIEA 2011-03-10
Ukraine DTC  2003-08-28
Grenada DTC  1960-08-06
Spain DTC  2006-06-23
Romania DTC  1993-11-12
Algeria DTC  1998-04-28
Zimbabwe DTC  1965-06-10
Pakistan DTC  1998-09-26
Malaysia DTC  2005-07-26
Ghana DTC  2004-11-02
Congo, Democratic Republic of the DTC  2005-04-29
Turkey DTC  2005-03-03
France DTC  1993-11-08
Poland DTC  1993-11-10
Israel DTC  1978-10-02
Portugal DTC  2006-11-13
Austria DTC  1996-03-04
Sudan DTC  2007-11-07
Sweden DTC  1995-05-24
Mauritius DTC  1996-07-05
Mexico DTC  2009-02-19
Oman DTC  2002-10-09
Czech Republic DTC  1996-11-11
Nigeria DTC  2000-04-29
Barbados TIEA 2013-09-17
Liechtenstein TIEA 2013-12-06
United States DTC  1997-02-17
Italy DTC  1995-11-16
Uganda DTC  1997-05-27

Tax treaties Map

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Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.

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