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South Africa - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
Two types of corporate taxes are applicable:
- Basic Corporate Tax, now reduced to 30%, is applicable to South African-resident companies whose income exceeds 150 000 Rands. Firms with an income lower than 150 000 Rands are taxed only at a 15% rate.
- Secondary Tax called Secondary Tax Company (STC) is levied on South African-resident companies, at the rate of 12.5%, on dividends declared net of exempt dividends received .
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Taxe rate on long-term capital gains |
Caoital Gains Tax (CGT) was introduced with effect from 1 October 2001. The effective rate of CGT for individuals and companies is 10.5% and 15% respectively.
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
South African-source dividends are exempt from tax, while as with effect from 23rd February 2000 foreign dividends received by South African residents are taxable. The amount of foreign dividends subject to tax varies, depending on whether the holding in the company distributing the dividends is considered a portfolio investment. A levy at the rate of 12.5% is imposed on dividends declared.
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Tax rate on branches |
Tax at the rate of 35% is imposed on profits of South African branches of non-resident companies. Suc h companies are now exempt from STC.
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Income tax
Fiscal year |
The tax year for a company is its financial year. which begins on 1st January and ends on 31st December of the same year.
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Income tax rate |
Individuals are charged at rates of tax that increase progressively as taxable income increases. The highest marginal tax rate payable is 40%, the lowest is 18%.
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VAT rates
Standard rates |
Standard rate is 14%
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Reduced rates |
Reduced rate varies between 0% to 14%.
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Other important taxes
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Name of tax |
Rate |
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Wealth tax
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No
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Successions
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0% but a duty (between 0% - 11.3%) is levied on property transfers depending upon the property value.
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Donations
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Donations by individuals and companies not considered to be public companies are subject to donation tax of 20%.However there is an exemption for casual donations valued within a certain limit.
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Accounting
Introduction
Accounting regulations are very strict in South Africa.
General accounting principles
The general principles of the structure of accounts published in South Africa are in agreement with the international accounting agreements.
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Obligations and publications
All the companies must hold their accounts in english, these recordings must include : capital and obligations of the company, the fixed assets register , the incomes, the annual stock report, a sumamry of the goods sold and bought.
Moreover, they have to produce their annual financial statement. It must contain the balance sheet and the annexes, a report on the incomes with annexes, a report made authentified by the director, a report authentified by the executives and a profit and loss account.
Certification and auditing
The annual financial statements of companies with private or public capital must be controlled by an independent auditor.
Professionals and representative organizations
Most of the big audit and accounting multinationals are present in South Africa. The accountants chartered by the Public Accountants and Auditors Board.
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Export Entreprises SA ©, All rights reserved
Last modified in
January 2003
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