On 22 December 2023, the South African Revenue Service officially published the 2023 tax acts, marking a substantial reform in the country’s fiscal landscape. The key acts include the Taxation Laws Amendment Act, 2023 (Act 17 of 2023), the Tax Administration Laws Amendment Act, 2023 (Act 18 of 2023), and the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2023 (Act 19 of 2023).

Highlights of the Main Changes:

  1. Personal Income Tax Adjustments: The personal income tax brackets and rebates have been adjusted to account for inflation, resulting in an increase in the annual tax-free threshold for individuals under the age of 65 from ZAR 91,250 to ZAR 95,750. Effective from 1 March 2023.
  2. Small Business Tax Rate Adjustments: The revision of brackets and rates for small business corporations effective from April 1, 2023, is outlined as follows:
  • ZAR 1 to 95,750: 0%
  • ZAR 95,751 to 365,000: 7%
  • ZAR 365,000 to 550,000: 21%
  • ZAR 550,001 and above: 27%
  1. Transfer Duty Bracket Increases:
    • Progressive adjustments to transfer duty brackets for property transactions.
  2. Incentives for Businesses and Individuals:
    • Introduction of a tax deduction incentive for businesses investing in renewable energy.
    • Solar tax credit for individuals acquiring solar PV panels, capped at ZAR 15,000.
  3. Excise Duties and Health Promotion Levy:
    • Excise duties on alcohol and tobacco have been raised by 4.9%.
    • Postponement of health promotion levy increase on beverages to April 2025.
  4. Extension and Introduction of Incentives:
    • The section 11D research and development (R&D) tax incentive has been extended for an additional 10 years.
    • Two-year extension of the urban development zone tax incentive.
    • The minimum royalty rate for oil and gas companies has been elevated to 2%.
  1. Advance Pricing Agreement (APA) Program:
    • Legislative provisions for an APA program to prevent double taxation.
    • Specific rules for unilateral and bilateral (“DTA”) APAs.
    • APAs applicable for up to five consecutive years, extendable for three more years with conditions.
    • Further details on APA program implementation to be communicated through public notice.

These comprehensive amendments aim to enhance tax efficiency, incentivize renewable energy investments, and provide clarity through the APA program, contributing to a dynamic and progressive fiscal environment in South Africa.