Tax Rates & Rebates

 

Individuals, Estates & Special Trusts

 

Year ending 29 February 2024

 

Taxable Income	Rate of Tax [Rands]
R 1 – R 237 100	18% of taxable income
R 237 101 – R 370 500	R 42 678 + 26% of taxable income above R 237 100
R 370 501 – R 512 800	R 77 362 + 31% of taxable income above R 370 500
R 512 801 – R 673 000	R 121 475 + 36% of taxable income above R 512 800
R 673 001 – R 857 900	R 179 147 + 39% of taxable income above R 673 000
R 857 901 – R 1 817 000	R 251 258 + 41% of taxable income above R 857 900
R 1 817 001 and above	R 644 489 + 45% of taxable income above R 1 817 000

 

Year ending 28 February 2023

 

Taxable Income	Rate of Tax [Rands]
R 1 – R 226 000	18% of taxable income
R 226 001 – R 353 100	R40 680 + 26% of taxable income above R226 000
R 353 101 – R 488 700	R73 726 + 31% of taxable income above R353 100
R 488 701 – R 641 400	R115 762 + 36% of taxable income above R488 700
R 641 401 – R 817 600	R170 734 + 39% of taxable income above R641 400
R 817 601 – R 1 731 600	R239 452 + 41% of taxable income above R817 600
R 1 731 601 and above	R1 731 601 and above

Rebates	2023/2024	2022/2023
Primary	R 17 235	R 16 425
Secondary (Persons 65 and older)	R 9 444	R 9 000
Tertiary (Persons 75 and older)	R 3 145	R 2 997

Tax Thresholds	2023/2024	2022/2023
Below age 65	R 95 750	R 91 250
Age 65 to below 75	R 148 217	R 141 250
Age 75 and over	R 165 689	R 157 900

Medical Tax Credits [Rands Per Month]	2023/2024	2022/2023
For the taxpayer who paid the medical scheme contributions	R 364	R 347
For the first dependent	R 364	R 347
For each additional dependent(s)	R 246	R 234

Interest Exemption

 

South African Sourced Interest	Amount [R]
Persons under 65 years	R23 800
Persons 65 years and older	R34 500

South African sourced interest income earned by non-residents is exempt if the non-resident was absent from the country for an aggregate of 183 days in the 12 months preceding the accrual of that interest.

Tax Free Investments

Amounts received by or accrued to an individual in respect of particular prescribed investment
instruments and policies are exempt. Contributions to these prescribed investments/policies are subject to an annual limit of R36 000. Currently, a R500 000 lifetime limit applies.  

Dividends

Dividends received by individuals from South African companies are generally exempt from income tax, but dividends tax at a rate of 20% is withheld by the entities paying the dividends to the individuals.

Foreign Dividends

Most foreign dividends received by individuals from foreign companies (shareholding of less than 10% in the foreign company) are taxable at a maximum effective rate of 20%. No deductions are allowed for expenditure to produce foreign dividends.

Foreign Interest

Foreign interest received by or accrued to a resident is subject to normal tax in South Africa.

  

Travel Expenses

Rates per kilometre, which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are determined by using the table on the SARS website www.sars.gov.za.

·     If the travel allowance is applicable to a portion of the tax year, the fixed cost is reduced
proportionately.

·     Where the travel allowance is based on actual distance travelled by the employee for business purposes, no tax is payable on an allowance paid by an employer to an employee, up to the rate of R4,64 per kilometre regardless of the value of the vehicle or distance travelled. This alternative is not available if other compensation in the form of an allowance or reimbursement (other than for parking or toll fees) is received from the employer in respect of the vehicle.

·     It is compulsory to keep a travel logbook in order to claim business travel expenses.

·     When claiming actual expenditure, the cost of the vehicle must be limited to the maximum allowed value as per the SARS website www.sars.gov.za for the purposes of calculating finance charges and wear and tear.

 

Subsistence Allowance

Where the recipient is obliged to spend at least one night away from his or her usual place of residence on business, and the accommodation to which that allowance or advance relates is in the Republic of South Africa, and the allowance or advance is granted to pay for meals and
incidental costs or incidental costs only, an amount, published on the SARS website www.sars.gov.za, under Legal Counsel / Secondary Legislation / Income Tax Notices / 2023, is deemed to have been expended per day.

Where the accommodation to which that allowance or advance relates is outside the Republic of South Africa, a specific amount per country is deemed to have been expended. Details of these amounts are published on the SARS website under Legal Counsel / Secondary Legislation / Income Tax Notices / 2019.

Where the recipient is by reason of the duties of his or her office or employment obliged to spend a part of a day away from his or her usual place of work or employment, a reimbursement or advance for expenditure actually incurred by the recipient is exempt if the recipient is allowed by his or her principal to incur expenditure on meals and other incidental costs for that part of a day and the amount of the expenditure does not exceed an amount published on the SARS website www.sars.gov.za, under Legal Counsel / Secondary Legislation / Income Tax Notices / 2023.

  

Travelling Allowance

Rates per kilometre, which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are determined using the table published on the SARS website www.sars.gov.za, under Legal Counsel / Secondary Legislation /
Income Tax Notices / 2023 / Fixing of rate per kilometre in respect of motor vehicles.

Note:

·     80% of the travelling allowance must be included in the employee’s remuneration for the purposes of calculating PAYE. The percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year will be for business purposes.

·     No fuel cost may be claimed if the employee has not borne the full cost of fuel used in the vehicle, and no maintenance cost may be claimed if the employee has not borne the full cost of
maintaining the vehicle (e.g. if the vehicle is covered by a maintenance plan).

·     The fixed cost must be reduced on a pro-rata basis if the vehicle is used for business purposes for less than a full year.

·     The actual distance travelled during a tax year, and the distance travelled for business purposes substantiated by a log book, are used to determine the costs which may be claimed against a
travelling allowance.

 

 

Retirement Fund Contributions

Contributions to a pension, provident or retirement annuity fund during a tax year are deductible by the member of the fund. The deduction is limited to the greater of:

·     27.5% of the employee’s remuneration for PAYE purposes (excluding retirement fund lump sums and severance benefits);
or

·     27.5% of the employee’s taxable income (excluding retirement fund lump sums and severance benefits).

The deduction is limited to a maximum amount of R 350 000. If contributions exceed the limit during a particular tax year, the contributions are carried over to the next tax year.

 

Donations

Deductions in respect of donations to certain public benefit organisations are limited to 10% of taxable income (excluding retirement fund lump sums and severance benefits). The amount of donations exceeding 10% of the taxable income is treated as a donation to qualifying public benefit
organisations in the following tax year.

Donations tax is levied at a flat rate of 20% on the cumulative value of donations not exceeding R30 million and a rate of 25% on the cumulative value exceeding R30 million. This was effective March 2018. Donations made prior to this date must not be included in the cumulative total.

The first R100 000 of donations in each year by an individual is exempt from donations tax, as well as donations to spouses and certain public benefit organisations.

Donations made by non-residents are also exempt from donations tax

Lump Sum Benefits

Lump sum benefits in consequence of the withdrawal of membership of a retirement fund, including amounts assigned in terms of divorce settlements in certain circumstances, other than death/retirement lump sum benefits, are taxed according to the following table:

 

Taxable Income from Withdrawal Benefits	Tax Payable
R 1 – R 27 500	0% of taxable income
R 27 501 – R 726 000	18% of taxable income above R 27 500
R 726 001 – R 1 089 000	R 125 730 + 27% of taxable income above R 726 000
R 1 089 001 and above	R 223 740 + 36% of taxable income above R 1 089 000

Lump sum benefits in consequence of Retirement/Death are taxed according to the following table:

 

Taxable Income from Retirement Benefits	Tax Payable
R 1 – R 550 000	0% of taxable income
R 550 001 – R 770 000	18% of taxable income above R 550 000
R 770 001 – R 1 155 000	R 39 600 + 27% of taxable income above R 770 000
R 1 155 001 and above	R 143 550 + 36% of taxable income above R 1 155 000

* Taxable income is cumulative and includes all lump sum payments whether on retirement
(after 1 October 2007) or withdrawal (after 1 March 2009), or a severance benefit (after 1 March 2011).

    

Capital Gains Tax [CGT]

  

Maximum Effective Rate of Tax	Tax Rate
Individuals and special trusts	18%
Companies	21.6%
Other trusts	36%

Inclusion Rates	Inclusion Rate
Individuals, special trusts and individual policyholder funds	40%
Companies and trusts	80%

Exclusions	Rands
Individuals, special trusts and individual policyholder funds	R 40 000
Individuals in year of death	R 300 000
Primary residence exclusion on the disposal of a primary residence	R 2 m gain/loss
Small business assets (persons over age 55 and market value of assets not more than R10 million)	R 1.8 million

Capital Gains Tax Example		Tax Payable
Salary		R 180 000
Sale of primary residence
– Proceeds	R 4 000 000
– Agent commission	(R 200 000)
– Purchase price	(R 1 500 000)
– Improvements	(R 150 000)
Sub total	R 2 150 000
Primary residence exclusion	(R 2 000 000)
Gain from sale	R 150 000
Sale of shares
– Proceeds	R 50 000
– Purchase price	(R 35 000)
Gain from sale	R 15 000
Total capital gains	R 165 000
Less: Annual exclusion	(R 40 000)
Total	R 125 000
Apply inclusion rate (40%)		R 50 000
Total taxable income		R 230 000

 

Trusts

Trust Tax Rates	2015	2016 – 2017	2018 – 2024
All Taxable Income	40%	41%	45%

Special trusts are taxed at the rates applicable to individuals, but are not entitled to any rebate. The 40% inclusion rate for a taxable capital gain applies to both types of special trusts and 80% inclusion rate for normal trusts.

 

A special Trust is one created:

 

·      Solely for the benefit of a person affected by a mental illness or serious physical disability which prevents that person from earning sufficient income to maintain him/herself. Where the person for whose benefit the trust was established dies prior to or on the last day of the year of assessment, the trust will no longer be regarded as a special trust; or

·      As a testamentary trust established solely for the benefit of minor children who are alive and related to the deceased on the date of death. Where the youngest beneficiary turns 18 years of age prior to or on the last day of the year of assessment, the trust will no longer be regarded as a special trust.

 

Section C

What is Section 7C?

Section 7C is an anti-avoidance provision designed to prevent avoidance of both donations tax and estate duty through low or no interest loans granted to trusts.

 

Implications of Section 7C?

 

SARS will deem the interest foregone on a loan to a trust where the interest is less than the official interest rate, as a donation. This donation is deemed to be made on the last day of the year of assessment of the trust and will be subject to donation tax.

The lender must be either a connected natural person or a company who granted the loan at the instance of that natural person. This applies to all loan account balances on or after 1 March 2017.

The provision does not apply to loans granted to a trust for the purchase of the lender’s or the spouse’s primary residence.

The official interest rate is linked to the repurchase rate plus 1% and is published on the SARS website. The most recent changes are as follows:

Date From	Date To	Rate
01.04.2016	31.07.2017	8.00%
01.08.2017	31.03.2018	7.75%
01.04.2018	30.11.2018	7.50%
01.12.2018	31.07.2019	7.75%
01.08.2019	31.01.2020	7.50%
01.02.2020	31.03.2020	7.75%
01.04.2020	30.04.2020	6.25%
01.05.2020	30.05.2020	5.25%
01.06.2020	31.07.2020	4.75%
01.08.2020	30.11.2021	4.50%
01.12.2021	31.01.2022	4.75%
01.02.2022	31.03.2022	5.00%
01.04.2022	31.05.2022	5.25%
01.06.2022	31.07.2022	5.75%
01.08.2022	30.09.2022	6.50%
01.10.2022	30.11.2022	7.25%
01.12.2022	31.01.2023	8.00%
01.02.2023	Until change in Repo* rate	8.25%

Company Tax Rates

Unless otherwise stated, Financial Years Ending on any date between 1 April 2023 and
31 March 2024:

 

Basic rate (other than entities specified below)

27%

Small Business Corporations [Annual Turnover of R 20 million or less]

Financial Years Ending on any date between 1 April 2023 and 31 March 2024:

 

Taxable Income	Rate of Tax
R 1 – R 95 750	0% of taxable income
R 95 751 – R 365 000	7% of taxable income above R 95 750
R 365 001 – R 550 000	R 18 848 + 21% of taxable income above R 365 000
R 550 001 and above	R 57 698 + 28% of the amount above R 550 000

 

Micro Businesses [Elective presumptive Turnover Tax for qualifying Turnover of R 1
million or Less]

Financial Years of assessment commencing on 1 March 2023 or ending on 29 February 2024:

 

Taxable Turnover	Rate of Tax
R 1 – R 335 000	0% of taxable turnover
R 335 001 – R 500 000	1% of taxable turnover above R 335 000
R 500 001 – R 750 000	R 1 650 + 2% of taxable turnover above R 500 000
R 750 001 and above	R 6 650 + 3% of taxable turnover above R 750 000

Donations

In the case of a taxpayer who is not an individual, exempt donations are limited to casual gifts not exceeding R10 000 per annum in total.

 

Donations between companies forming part of the same group of companies and donations to

certain public benefit organisations are exempt from donations tax.

Value Added Tax [VAT]

The VAT rate remained unchanged at 15%.

  

Compulsary Registration

It is mandatory for a business to register for VAT if the total value of taxable supplies made in any consecutive twelve month period exceeded or is likely to exceed R1 million. The business must complete a VAT 101 – Application for Registration form and submit it to SARS within 21 days

from date of exceeding R1 million. 

Voluntary Registration

A business may also choose to register voluntarily for VAT if the value of taxable supplies made or to be made is less than R1 million, but has exceeded R50 000 in the past period of 12 months.

Dividends

Dividends are subject to dividends tax which is withheld from the gross dividend declared, before being paid to the beneficial owners. The entity declaring the dividend is liable for withholding the tax and paying it to SARS.

The following rates are applicable: 

Beneficial Owner	Dividend Witholding Tax Rate
Resident individuals	20%
Resident companies	0%
Non-resident individuals and companies	Refer to tax rates per South African DTA Agreements – available on the SARS website

Fringe Benefits

Employer Owned Vehicles

·     The taxable value is 3.5% of the determined value (the cash cost including VAT) of each vehicle per month. Where the vehicle is:

·     the subject of a maintenance plan when the employer acquired the vehicle the taxable value is 3,25% of the determined value; or

·     acquired by the employer under an operating lease, the taxable value is the cost incurred by the employer under the operating lease plus the cost of fuel.

·     80% of the fringe benefit must be included in the employee’s remuneration for the purposes of calculating PAYE. The percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year will be for business purposes.

·     On assessment, the fringe benefit for the tax year is reduced by the ratio of the distance travelled for business purposes, substantiated by a log book, divided by the actual distance travelled during the tax year.

·     On assessment further relief is available for the cost of licence, insurance, maintenance and fuel for private travel, if the full cost thereof has been borne by the employee and if the distance travelled for private purposes is substantiated by a log book.

 

Interest-free or low-interest loans

The difference between interest charged at the official rate, and the actual amount of interest
charged, is to be included in gross income.

Residential Accommodation

·     
The value of the fringe benefit to be included in gross income is the lower of the benefit calculated by applying a prescribed formula, or the cost to the employer if the employer does not have full ownership of the accommodation.

·     The formula will apply if the accommodation is owned by the
employee, but it does not apply to holiday accommodation hired by the
employer from non-associated institutions.

Securities Transfer Tax

Securities transfer tax (STT) is payable upon the transfer of unlisted shares. This includes the buying back, redemption or cancellation of shares. STT is levied at 0.25% of the value of the shares transferred and is due within two months after the end of the month in which the shares were transferred.

Tax on International Travel

R190 per passenger departing on international flights, excluding flights to Botswana, Lesotho,
Namibia and eSwatini, in which case the tax is R100.

Skills Development Levy

Skills Development Levy

A skills development levy is payable by employers at a rate of 1% of the total remuneration paid to
employees. Employers paying annual remuneration of less than R500 000 are exempt from the payment of Skills Development Levies.

Unemployment Insurance Contributions

·     Unemployment insurance contributions are payable monthly by employers, on the basis of a
contribution of 1% by employers and 1% by employees, based on the employees’ remuneration below a certain amount

·     Employers not registered for PAYE or SDL must pay the contributions to the Unemployment
Insurance Commissioner.

·     The proposed UIF ceiling limit increase is R17 711.58 per month.

·     Effective since 1 June 2021, under section 6(2) of the Unemployment Insurance Contributions Act, 2002 (Act No. 4 of 2002), the UIF contributions amount shall not apply to so much of the remuneration paid or payable by an employer to an employee during any month, as exceeds R17 712.

 

Provisional Tax

A provisional taxpayer is any person who earns income by way of remuneration from an unregistered employer, or income that is not remuneration, or an allowance or advance payable by the person’s principal. An individual is not required to pay provisional tax if he or she does not carry on any business, and the individual’s taxable income:

·        Will not exceed the tax threshold for the tax year; or

·        From interest, dividends, foreign dividends, rental from letting of fixed property, and remuneration from an unregistered employer will be R30 000 or less for the
tax year.

Provisional tax returns showing an estimation of total taxable income for the year of assessment are required from provisional taxpayers.

Deceased estates are not provisional taxpayers.

  

Estate Duty

Value of Estate	Rate
R0 to R30 000 000	20% of the dutiable amount of a deceased estate
Exceeding R30 000 000	25% of the dutiable amount of a deceased estate

Estate duty is levied on the dutiable amount of a
deceased estate (property of residents and SA property of non-residents).
Deductions include: a standard abatement of R3.5 million per estate (R7
million for a married couple) and certain other deductions, the most
important of which is the deduction for property accruing to a surviving
spouse.

 

Transfer Duty

Paid on acquisition of immovable property where the transaction is not subject to VAT. Transfer duty is also payable on the acquisition of residential property through an interest in a company or trust. The rates of duty are as follows:

Years of assessment commencing on 1 March 2023 or ending on 29 February 2024. 

 

Value of Property	Rate
R 1 – R 1 100 000	0%
R 1 100 001 – R 1 512 500	3% of the value above R 1 100 000
R 1 512 501 – R 2 117 500	R 12 375 + 6% of the value above R  1 512 500
R 2 117 501 – R 2 722 500	R 48 675 + 8% of the value above R 2 117 500
R 2 772 501 – R 12 100 000	R 94 075 +11% of the value above R 2 722 500
R 12 100 001 and above	R 1 128 600 + 13% of the value exceeding R 12 100 000

Witholding Taxes

Other Payments to Non-Residents	Rate
Royalties	15%
Interest	15%
Sportsmen and entertainers who perform in SA	15%

 

Fixed Property acquired in South Africa from a seller that is a Non-Resident	Rate
If the non-resident is a natural person	7.5%
If the non-resident is a company	10%
If the non-resident is a trust	15%

SARS Interest Rates

Rate of Interest [From 1 February 2023]	Rate
Fringe benefits – interest-free or low-interest loan (official rate)	8.25% p.a.

 

Rate of Interest [From 1 March 2023]	Rate
Late or underpayment of tax	10.50% p.a.
Refund of overpayment of provisional tax	6.50% p.a.
Refund of tax on successful appeal or where the appeal was conceded by SARS	10.50% p.a.
Refund of VAT after prescribed period	10.50% p.a.
Late payment of VAT	10.50% p.a.
Customs and Excise	10.50% p.a.