Taxation in South Africa
[1] Three of the provinces of South Africa contributed 77.8% of the total tax revenue: Gauteng (49.0%), Western Cape (15.5%), and KwaZulu-Natal (13.3%).
In line with the changes in tax residence implemented with the 2019/20 budget, taxation of capital gains has become of greater interest.
One effect of this process is the immediate triggering of capital gains tax liability on all assets the taxpayer has in South Africa.
As of 1 March 2018, this tax subjects cumulative donations in excess of R30 million made by persons to a flat rate of 25%.
For taxpayers who are not natural persons, the exempt donations are limited to casual gifts not exceeding R10 000 per annum in total.
The aim of this tax is to encourage owners of motor vehicles in South Africa to become more energy efficient and environmentally friendly.
[1] This tax applies to electricity generated from non-renewable sources and was introduced in July 2009 at a rate of 2 cents per kWh.
[1] On 1 April 2018 this tax was imposed on sugary beverages "in support of the Department of Health's deliverable to decrease diabetes, obesity and other related diseases.
[18] This tax was implement on 1 February 2017 with the aim of reducing waste and/or disposal into landfills while also encouraging reuse, treatment and recycling of pneumatic tyres.
[1] Exchange controls relate to two broad areas: 1) Transactions involving foreign currency purchases or sales.
Such investments generally require large transactions involving foreign currency and are subject to exchange controls.
From June 2003 to February 2004 an exchange control amnesty was implemented which allowed such individuals the opportunity to "regularise" their affairs.
[18] Generally a fringe benefit of 3.5% of the determined value (cash cost plus VAT) of the vehicle per month is added to the taxpayer's remuneration.
[18] As with a travelling allowance, 80% of the fringe benefit is included in the taxpayer's remuneration, unless the vehicle is used for business purposes at least 80% of the time, then the percentage is reduced to 20%.
[20] The diesel refund system was introduced on 4 July 2001 as a way to promote international competitiveness in the fishing, farming, forestry and mining industries.
The Gauteng Province had 40.1% of assessed taxpayers and 27.3% of them employed in finance, insurance, real estate, or the business service sector.
[2] Policy changes: In 2017/18 section 11F of the tax code set a R350 000 cap on the 27.5% deductible contribution to a pension fund.
The tax is levied on the gross value of the assets (in excess of R3.5 million) of the deceased person at the time of death, less any allowable deductions.
The South African government has agreements with some countries to avoid double taxation in relation to estate duty.
[16] Interest earned by non-residents is exempt from taxation if it is payable by any sphere of the South African government or a bank or if the debt is listed on a recognised exchange.
[18] From 1 March 2012 the exemption applicable to foreign interest earned by South African resident taxpayers was scrapped.
In the case where the taxpayer has already made a withdrawal from the retirement annuity (not possible before age 55) that amount is deemed to be part of the tax free lump sum.
The following rates apply:[18] A retrenchment package is severance pay that is required to be at least one week's remuneration per completed year of service.
The entire value of the retrenchment package, less an exemption amount, is included in the taxpayer's taxable income for the financial year.
This negated the possibility of a taxpayer, who was retrenched and retired within the same year, claiming two tax free lump sum exemptions.
As from 1 April 2012, the "right or entitlement to receive any distribution from a company or close corporation" is no longer deemed to be a security and is covered by dividends tax.
Transfer Duty is a tax levied on the value of any property (defined as land and fixtures including mineral rights and shares in a share-block company) acquired by any person by way of a transaction or in any other way.
[4] Certain goods and services are Zero-rated, including exports, basic food items, petrol and diesel, and farming inputs.
The actual distance travelled by the vehicle for business purposes, as recorded in a log book is used to determine the costs which may be claimed.
[18][19] If the taxpayer receives any other allowance or reimbursement related to the vehicle (excluding parking and toll fees) then this exception is not applied.
