Please enable JavaScript.
Coggle requires JavaScript to display documents.
Companies and Dividends Tax - Coggle Diagram
Companies and Dividends Tax
Types of Companies
Co-operatives
SA charities
Foreign companies
Portfolio of Collective Investment schemes in properties
REIT
SA public entities
e.g) Universities
Foreign Collective Investment schemes
SA Companies
CC's
Company Tax Liability Rate
Normal Co or CC
28%
About
Year of Assessment/Financial Year
Are the same thing
Also
Tax period and financial period are in sync
Public and private companies
Public companies are exempt from donations tax
Close Corporation
1 - 10 members_Natural persons or trusts
Less onerous accounting requiremens
Small Business Corporation
Tax Rates
7% of the TI R87 300
Exceeding
R87 300
but not exceeding R365 000
R19 439 + 21% of TI exceeding R365 000
Exceeding
R365 000
but not exceeding R550 000
R58 289 + 28% of TI exceeding R550 000
Exceeding
R550 000
0%
Not
exceeding
R87 300
Definition of a SBC
Gross Income < R20 Mil
Shareholders do not have shares in other companies
Unless permitted holdings
Only natural persons as shareholders
<20% of revenue + capital gains from investment Income/person services
CC/Private Company
NOT a "personal service provider"
You'll be told if CC is a SBC in an assessment
Withholding Tax Dividends
Company declaring
Dividends
Can't claim deductions for dividends
Not expenditure incurred in the production of Income
Generally
2)
Prior
1 April 2012
STC payable
@ 10% payable
by the company on dividends paid to shareholders
3)
From
1 April 2012
dividends tax
@ 15% payable
by the company as a withholding tax charged on certain shareholder
1)
Not tax-deductible expense
4)
From
22 February 2017
dividends tax
@ 20%
payable by the company as a withholding tax charged on certain shareholder
Shareholder receiving
Dividends
Gross
amount specifically included in gross income
Local dividends are exempt
Dividends Tax
Dividends definition s1: 01 April 2012
Any amount transferred or applied by a company that is a resident for the benefit or on behalf of any person in respect of any share in that company, whether that amount
By way of a distribution made by; or
As consideration for the acquisition of any share in that company
NB!!
A dividend is not limited to payments to shareholders, but it merely must be made in respect of any share
Therefore
the payment of an amount to a
relative
or
family member
of a shareholder because of the shareholding, is a dividend
Rule
Dividend is an amount
Doesn't have to be cash
A dividend must effectively be out of profits
Payment in respect of a share
An issue of capitalisation shares is not a dividend
Payment must be by a
SA Residence Company
Rate
@ 20%
from
22 February 2017
Taxed on the shareholder
BUT
withheld by the company
to pay Div Tax to SARS therefore the beneficial owner is liable
NB!!
This withholding Tax should be paid in a month after dividend became payable
Shareholder receives
NET AMOUNT
Dividends Paid
LESS
Dividends Tax
(20%)
NET AMOUNT RECEIVED BY SHAREHOLDER
A
Dividend in specie
is a dividend not in cash
And here the company is liable for Dividend Tax
Tax Exemption
A dividend will be exempt if
A
PBO
which is tax exempt
Closure rehabilitation trust
Or the person issuing the dividend is a
Provincial admin
Municipality
Gvt
Certain institutions established by law
The company/CC is a
SA Resident
Pension, Providend or retirement annuity fund
Pension/Providend preservation fund
Beneficiary fund
Benefit fund
CSIR, SANRAL, DBSA
Micro-Business shareholder dividend from micro-business
Non-Res if dividend paid by non-Res SA listed Co.