SARS Guide for Tax Rates/Duties/Levies (Issue 16)

– August 2023 update

SARS regularly updates its guides. One such recent update is their 68-page Guide for Tax Rates, Duties, and Levies (Issue 16) published in August 2023.

In summarising this Guide, a few of the lesser-known levies and taxes are listed below.

Oil and gas companies

(a) Rate of dividends tax in respect of dividends paid by an oil and gas company

The rate of dividends tax that is paid by an oil and gas company on the amount of any dividend derived from oil and gas income must not exceed 0% of the amount of that dividend.
Dividends paid out of amounts not derived from an oil and gas company’s oil and gas income will be subject to dividends tax at the rate of 20% if a reduced rate or exemption is not applicable.
The rate of 0% also applies to the amount of a foreign dividend paid by a foreign oil and gas company on listed shares provided that the foreign dividend is derived from that company’s oil and gas income.

(b) Rate of withholding tax on interest paid by an oil and gas company

Withholding tax on interest is applicable with effect from 1 January 2015. The rate of withholding tax payable by an oil and gas company may not exceed 0% of the amount of any interest that is paid or becomes due and payable on or after that date by such company for loans applied to fund expenditure contemplated in paragraph 5(2) of the Tenth Schedule. The rate is 15% on other interest paid to non-residents unless an exemption or a reduced rate applies.

Companies mining for gold

These companies are taxed according to one of the following “gold mining tax formulae”:

(a) Rate of normal tax on taxable income derived from mining for gold.

Only one formula applies as of 01 April 2012 as STC was replaced by dividends tax on that date: Y = 34 – (170/x) in which:

x = the ratio, expressed as a percentage, calculated as follows: Taxable income from gold mining / Total revenue (turnover) from gold mining and y = calculated percentage which represents the rate of tax to be levied.

Rate of normal tax on taxable income other than that derived from mining for gold

Only one rate applies as of 01 April 2012 as STC was replaced by dividends tax on that date. The current tax rate is 27% from 31 March 2023.

Public benefit organisations or recreational clubs

A public benefit organisation (PBO) that is approved under section 30(3) is taxable on its taxable income as from its first year of assessment commencing on or after 1 April 2006.
A recreational club that is approved under section 30A(2) is taxable on its taxable income as from its first year of assessment commencing on or after 1 April 2007.
A small business funding entity that is approved under section 30C(1).

PBO or recreational club that is a company
The current tax rate is 27% from 31 March 2023.

PBO that is a trust
The current tax rate is 27% from 31 March 2023.

Security transfer tax (STT)

Securities transfer tax was introduced by the Securities Transfer Tax Act 25 of 2007 with effect from 1 July 2008. It replaced stamp duty and uncertificated securities tax on marketable securities. STT is levied for:

  • every transfer of any security (whether listed or unlisted) issued by a close corporation or company incorporated, established, or formed inside South Africa; or a company incorporated, established, or formed outside South Africa and is based on the taxable amount of the security; or
  • any reallocation of securities from a member’s bank-restricted stock account or a member’s unrestricted and security-restricted stock account to a member’s general restricted stock account.

A “security” means any:

  • share or depository receipt in a company; or
  • member’s interest in a close corporation,
    excluding the debt portion in respect of a share linked to a debenture.

The current STT rate is 0.25% of the taxable amount.

Skills Development Levy (SDL)
The current tax rate is 1% of payroll. Employers with an annual payroll of R500 000 or less whether or not the employer is registered for employees’ tax (PAYE) are exempt from SDL.

Withholding tax on royalties: Rate

As of 01 January 2015 to date

The withholding tax is increased to 15% on payments to or for the benefit of a foreign person unless the foreign person is exempt from withholding tax on royalties or a reduced rate applies.

A foreign person is exempt from withholding tax on royalties if:

  • the person is a natural person and physically present in South Africa for more than 183 days in aggregate during the twelve-month period preceding the date that the royalty is paid;
  • the property in respect of which that royalty is paid is effectively connected with a permanent establishment of that foreign person in South Africa if that foreign person is registered as a taxpayer under Chapter 3 of the Tax Administration
    Act 28 of 2011; or
  • the royalty is paid by a headquarters company under specified circumstances.

The above payments may be subject to normal tax.

Withholding tax on interest: Rate

From 1 March 2015 to date

With effect from 1 March 2015, a 15% final withholding tax is imposed on interest from a South African source payable to non-residents. Section 50D provides for exemptions from withholding tax on interest. The interest payment may be subject to a reduced rate under section 50E.

Withholding tax on foreign entertainers and sportspersons (visiting artists): Rate

From 1 August 2006 to date

A 15% final withholding tax is payable effective from 1 August 2006 on gross payments to entertainers and sportspersons who are not residents for their performances in South Africa in respect of any specified activity exercised or to be exercised by that person or any other person who is not a resident.

The withholding tax does not apply in respect of any person who is not a resident if that person is an employee of an employer who is a resident and is physically present in South Africa for a period or periods exceeding 183 full days in aggregate during any 12-month period commencing or ending during the year of assessment in which the specified activity is exercised.

Ordinary customs duty

Ordinary customs duty is levied on imported goods and is usually calculated on the value of the goods. Refer to the relevant Part 1 of Schedule No. 1 to the Customs and Excise Act 91 of 1964 (the Customs and Excise Act).

Anti-dumping, countervailing, and safeguard duty or quota on imported goods

Anti-dumping and countervailing duties are levied on goods considered to be dumped in South Africa or on subsidized imported goods respectively. A safeguard duty or a quota can be imposed in case of disruptive competition e.g. if imports unexpectedly increase which poses a threat to local industries. Refer to Schedule No. 2 of the Customs and Excise Act.

The above duties are either levied on an ad valorem basis (percentage of the value of the goods) or as a specific duty (cents per unit, kilogram, or litre). The level and type of duty imposed on a product is subject to the following main criteria:

  • The value of the goods (customs value)
  • The volume or quantity of goods
  • The tariff classification of the goods (tariff heading)

Plastic bag levy

An environmental levy of 3 cents per bag was introduced on certain plastic carrier bags and flat bags (bags generally regarded as “grocery bags” or “shopping bags”). Plastic bags used for immediate wrapping or packaging, zip-lock bags, and household bags including refuse bags and refuse bin liners are excluded from paying this levy.

The environmental levy must be treated by a vendor for VAT purposes in the same manner as ad valorem excise duty levied in terms of Part 2B of Schedule No. 1 to the Customs and Excise Act, 1964.

The method to be followed is that the environmental levy must be added to the price of the goods supplied and VAT must be levied on this total price in terms of section 7(1)(a) of the Value-Added Tax Act, 1991.

The levy from 6 April 2022 to date increased to 28 cents per bag.

Incandescent (filament) light bulbs

An environmental levy on incandescent light bulbs was introduced with effect from 1 November 2009 to promote energy efficiency and to reduce electricity demand.

The levy from 6 April 2022 to date increased to R15 per bulb.

Carbon dioxide (CO2) vehicle emissions levy

The 2009 Budget announced an ad valorem CO2 emissions levy on new motor vehicles, effective from 1 September 2010. The main objective of this levy is to influence the composition of South Africa’s vehicle fleet to become more energy-efficient and environmentally friendly. The levy will be based on certification provided by the vehicle manufacturer, or in the absence thereof according to the set methods of calculation as described in Note 5 in Schedule 1 Part 3D to the Customs and Excise Act, 1964.

The levy increased to R132 per g/km from 6 April 2022 to date.

Example: If the CO2 emissions of a new car are 140 g/km the tax payable will be calculated as follows:

140 g/km – 95 g/km = 45 g/km × R132 = R5 940.

Diamond export levy

A diamond export levy on unpolished diamonds exported from South Africa was introduced, effective from 1 November 2008 at a rate of 5% of the value of such diamonds.

Health Promotion Levy on Sugary Beverages

The Sugary Beverages Levy (SBL) was implemented with effect from 1 April 2018 as follows:

  • The SBL is calculated on the total sugar content that exceeds 4 grams per 100ml. The first 4 grams per 100ml are levy free. Sugar content means both the intrinsic and added sugars and any other sweetening matter of the product.
  • For powder and liquid concentrates or preparations for making of beverages, sugar content is calculated on the total volume of the prepared beverage when mixed or diluted according to the manufacturer’s product specifications.

The rate from 1 April 2019 to date is equivalent to 2,21c/g of the sugar content that exceeds 4g/100ml.