Page 27 - Nexia Cape Town 2018 TG Digital

DIVIDENDS TAX

Dividends tax is a tax levied on the shareholder at a rate of 20% (15% prior to
22 February 2017) on dividends paid� However, where a dividend in specie is paid,
dividends tax is a tax levied on the company declaring the dividend� Dividends
tax is normally withheld by the company paying the dividend and is payable at
the end of the month following the month in which the dividend was paid�

Dividends tax exemptions
A dividend is exempt from dividends tax if the dividend is not a dividend in specie
and the beneficial owner is:
■ A SA company
■ The Government and various quasi government institutions
■ Public Benefit Organisations
■ Environmental rehabilitation trusts
■ Pension, provident and similar funds
■ Medical Schemes
■ A shareholder in a registered micro business (only the first R200 000 of
dividends paid during a particular year of assessment)
■ A non-resident and the dividend is paid by a South African Listed non-
resident company
Where the dividend comprises of a dividend in specie, the following exemptions
are applicable:
■ The same exemptions as above subject to the beneficial owner submitting a
declaration and written undertaking
■ Where the beneficial owner forms part of the same group of companies
Loans to connected persons
Dividends tax will be calculated as 20% of the difference between the official rate
of interest in respect of the debt and the amount of interest payable in respect of
the debt� Where the official rate of interest on the debt does not exceed the actual
interest payable on the debt, the value of the deemed dividend is deemed to be
nil� Dividends tax on a loan to a connected person is regarding is a dividend in
specie and as such the liability of the company and not the shareholder�

25