Robyn van der MerweSARS, Taxation Laws, Taxation Requirements

Taxation in South Africa

SARS published an updated 134-page guide to taxation in South Africa in 2024.

Below is a list of the most significant tax legislation administered in South Africa by the Commissioner for the South African Revenue Service (SARS). 

  • Carbon Tax Act;
  • Customs and Excise Act;
  • Disaster Management Tax Relief Act;
  • Employment Tax Incentive Act;
  • Estate Duty Act;
  • Income Tax Act;
  • Securities Transfer Tax Act;
  • Securities Transfer Tax Administration Act;
  • Skills Development Levies Act;
  • Tax Administration Act;
  • Transfer Duty Act;
  • Unemployment Insurance Contributions Act; and
  • Value-Added Tax Act.

The information in this guide concerning income tax relates to:

  • natural persons, deceased estates, insolvent estates, or special trusts for the 2024 year of assessment commencing on 1 March 2023 or ending on 29 February 2024;
  • trusts for the 2024 year of assessment commencing on 1 March 2023 or ending on 29 February 2024; and
  • companies for the 2024 year of assessment with financial years ending during the 12-month period ending on 31 March 2024.

For income tax purposes, this guide has been updated to include the Tax Administration Laws Amendment Act 18 of 2023, the Taxation Laws Amendment Act 17 of 2023, and the Rates and Monetary Amounts and Amendment of Revenue Laws Act 19 of 2023.

For indirect tax purposes, all information has been updated to include amendments up to the date of publication of this guide.

Secrecy and confidentiality

In Chapter 6 of the TA Act, provision is made for the confidentiality of information by current or former SARS officials because of the performance of their duties, except under specified circumstances. For example, information that a serious offence has been or may be committed or information of an imminent and serious public safety or environmental risk may be shared with certain organs of state. Such disclosure, however, may only be made under an order issued by a judge in chambers.

The purpose of the secrecy provisions is to encourage taxpayers to make full disclosures of their financial affairs, thereby maximising tax compliance while having the peace of mind that their information will remain confidential. A taxpayer may agree to dispense with the secrecy provisions if so desired.

Overview of taxes

Taxes that are levied by the national government of South Africa under the Act are the following:

  • Normal tax, also known as income tax

The following taxes form part of normal tax:

➢ PAYE
➢ Provisional tax
➢ Withholding of amounts from payments to non-resident sellers of immovable property
➢ CGT

  • Taxation of foreign entertainers and sportspersons
  • Withholding tax on royalties
  • Withholding tax on interest
  • Donations tax
  • Dividends tax
  • Turnover tax on micro businesses

Value-added tax (VAT) is levied by the national government under the VAT Act. VAT is a consumption tax, so it is generally based on domestic consumption and is levied at the standard rate (currently 15%) on the

  • supply of all goods or services made by any vendor in the course or furtherance of any enterprise carried on by that person;
  • importation of any goods into South Africa by any person; and
  • supply of certain “imported services” as defined in the VAT Act.

The levying of VAT is, however, subject to certain exemptions, exceptions, deductions, and adjustments provided for in the VAT Act. For example, as an exception, certain goods and services are subject to VAT at the zero rate.

Duties and levies that are leviable by the national government under the Customs and Excise Act 91 of 1964 are:

  • ordinary customs duty;
  • environmental levy;
  • anti-dumping, countervailing, and safeguard duties on imported goods;
  • specific excise duty;
  • specific customs duty;
  • ad valorem excise duties;
  • ad valorem customs duty;
  • general fuel levy and road accident fund levy; and
  • ordinary levy, this is the equivalent of ordinary customs duty paid by governmental bodies in Botswana, Lesotho, Namibia, and Eswatini for specified purposes.

The national government also levies the following taxes under the relevant acts:

  • Transfer duty
  • Estate duty
  • STT
  • SDL
  • Unemployment insurance fund (UIF) contributions
  • Air passenger departure tax
  • Mineral and petroleum resources royalties
  • Diamond export levy
  • International oil pollution compensation fund contributions levy

Provincial and local governments do not levy any of the taxes mentioned above. Local governments levy rates on the value of fixed property to finance the cost of municipal or local services.

A series of articles will individually deal with most of the forms of taxation. When reading these articles, the glossary below is to be kept in mind.

Glossary

  • “ADR” means alternative dispute resolution.
  • “CFC” means controlled foreign company;
  • “CGT” means capital gains tax, being the normal tax attributable to the inclusion of a taxable capital gain in taxable income under section 26A;
  • “Customs and Excise Act” means the Customs and Excise Act 91 of 1964;
  • “Disaster Management Tax Relief Act” means the Disaster Management Tax Relief Act 13 of 2020;
  • “Eswatini” means the Kingdom of Eswatini, previously known as Swaziland;
  • “ETI” means employment tax incentive;
  • “ETI Act” means the Employment Tax Incentive Act 26 of 2013.
  • “MTC” means medical scheme fees tax credit contemplated in section 6A;
  • “non-resident” means a person that is not a resident of South Africa;
  • “OECD” means Organisation for Economic Co-Operation and Development;
  • “PAYE” means Pay-As-You-Earn;
  • “Resident” means a person that is a “resident” as defined in section 1(1) and, therefore, a resident of South Africa.
  • “SACU” means the Southern African Customs Union;
  • “SADC” means the Southern African Development Community.
  • “SARS Act” means the South African Revenue Service Act 34 of 1997.
  • “SBC” means small business corporation;
  • “Schedule” means a schedule to the Act;
  • “SDL” means skills development levy;
  • “section” means a section of the Act;
  • “South Africa” means the Republic of South Africa;
  • “standard rate” means the current rate of VAT that is payable on a taxable supply or taxable importation of goods or services under section 7(1) of the VAT Act; 
  • “STT” means securities transfer tax;
  • “TA Act” means the Tax Administration Act 28 of 2011;
  • “Tax treaty” means an agreement for the avoidance of double taxation entered into between South Africa and another country.
  • “the Act” means the Income Tax Act 58 of 1962;
  • “Transfer Duty Act” means the Transfer Duty Act 40 of 1949;
  • “UIF” means unemployment insurance fund.
  • “VAT” means value-added tax;
  • “VAT Act” means the Value-Added Tax Act 89 of 1991; and
  • any other word or expression bears the meaning ascribed to it in the relevant Act.