Corporate taxes

摘要

South Africa's standard corporate tax rate stands at 28%. With effect from fiscal year 2018/19 (ending March 31st), the value-added tax rose 1 percentage point to 15%. The tax regime became residence based, rather than source based, in 2001. Passive income (such as interest, rent and royalties) generated outside South Africa is taxable, and residents and locally controlled companies are taxed on their worldwide income with appropriate relief (such as tax treaties) to avoid double taxation. Nonresidents are taxed only on their income from a South African source. Multinational companies meeting certain criteria are considered nonresident for taxation purposes. Foreign dividends received by a South African resident company are usually taxable in South Africa. If a company is not a controlled foreign company (CFC)-a foreign company for which more than 50% of the total participating rights are held by a South African resident(s)-or if it is a CFC but its income is exempt, dividends received will form part of gross income and will be taxed accordingly, unless the "participation exemption" applies, meaning a resident company holds more than 20% of the total equity shares of the company declaring the dividend. Since the companies that declare these dividends are usually exempt from paying dividends tax, these dividends are not deductible in determining the "net amount". A South African branch can remit the taxed profits in full to the foreign head office as a deduction for withholding tax.