CAPITAL
South Africa does not have a single official capital city.
The Parliament is in Cape Town, making it the legislative capital.
The President and Cabinet meeting in Pretoria, making it the administrative capital. The Supreme Court of Appeal is
in Bloemfontein, making it the judicial capital.
POPULATION
58 Million
AREA
1,220,813 sq km
LEGAL SYSTEM
A mixed legal system of Roman-Dutch civil law, English common law and customary law.
TAX REGIME
Personal Income Tax | Local & Expatriate
| Summary | Tax Rate/s |
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Income tax information supplies is in South African Rand.
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Corporate Income Tax
| Summary | Tax Rate/s |
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A South African (SA)-resident company is subject to corporate income tax (CIT) on its worldwide income, irrespective of the source of the income. Non-residents are taxable on SA-source income.
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In South Africa, the CIT rate applicable for corporate income of both resident and non-resident companies for tax years ending between 1 April 2020 and 31 March 2021 is a flat 28%. |
Withholding Tax
| Summary | Tax Rate/s |
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The only payments to residents that are subject to WHT are in respect of dividends, although resident companies are exempt from the dividend WHT.
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Royalties and know-how payments made to non-residents for the use of or right to use IP rights in South Africa are deemed to be from an SA source. The payer of the royalty or know-how payment is obligated to deduct a WHT of 15% of this payment, which is a final tax payable by the recipient of such income. |
Capital Gains Tax
| Summary | Tax Rate/s |
| CGT applies to all assets disposed of on or after 1 October 2001. Capital gains and losses on the disposal of a primary residence are excluded, limited to R2 million. To calculate your capital gains, subtract the base cost of your property from the value at which you sold it. | 18% for individuals and special trusts. 22.4% for companies and 36% for other trusts. |
Environmental Levy
| Summary | Tax Rate/s |
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The following products carry environmental levies:
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Currently 3.5 cents per kWh on electricity generated from fossil fuels, as this might impact the carbon tax. |
Inheritance Tax
| Summary | Tax Rate/s |
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You don’t have to pay tax on what you inherit as it’s not included in your gross income, however, the estate of a deceased is subject to a 20% tax called estate duty. |
20% on the first R30 million and at a rate of 25% on the dutiable value of the estate above R30 million. |
Dividend Tax
| Summary | Tax Rate/s |
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Dividends are tax exempt if the beneficial owner of the dividend is an SA-resident company, SA-retirement fund, or other prescribed exempt person.
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Dividends tax is imposed at 20% on dividends declared and paid by all resident companies as well as by non-resident companies in respect of shares listed on a South African exchange. |
VAT/GST
| Summary | Tax Rate/s |
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Zero-rated VAT is charged at 0% and exempt goods are non-taxable.
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The standard rate is 15%. |
Bilateral Tax Treaties and DTAAs
| Summary | Tax Rate/s |
| The Double Taxation Agreements (DTAs) and Protocols that are already in force, have been divided into two groups to make navigation easier, i.e. Africa and Rest of the World. | N/A |
Tax Incentives
| Summary | Tax Rate/s |
| Foreign Tax Credit
The South African Income Tax Act makes provision for a rebate against CIT in respect of foreign taxes paid on foreign-sourced income or a deduction against income of foreign taxes paid on SA-sourced income. Research and Development (R&D) The current costs related to certain R&D activities carried on in South Africa are 150% deductible, subject to pre-approval by a government-appointed approval committee. Headquarter Company Regime At least 50% of the headquarter company’s gross income must be comprised of dividends, interest, royalties, rentals, service fees, or proceeds from the sale of equity shares or IP from its 10%-plus holdings, where the gross income exceeds ZAR 5 million. Energy Efficiency Savings The energy efficiency savings incentive provides an income tax deduction to qualifying taxpayers. The deduction equates to ZAR 0.95 for each kilowatt hour (or equivalent) saved by the taxpayer during the relevant year of assessment against a baseline from the beginning of the year. |
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TOP INDUSTRIES
MINING
AUTOMOBILE ASSEMBLY
METALWORKING
MACHINERY
TEXTILES
IRON & STEEL
CHEMICALS
FERTILIZER
FOODSTUFFS
COMMERCIAL SHIP REPAIR
ECONOMIC OVERVIEW
South Africa has a middle-income emerging market with an abundant supply of natural resources. In addition to their well-developed financial, legal, communications, energy and transport sectors with a stock exchange that is Africa’s largest and among the top 20 in the world.