The South African Revenue Service (SARS) issued Interpretation of Note 131 on 29 April, 2024, which addresses the exemption of income associated with South African ships utilised in international shipping.
This aims to support the growth of a competitive domestic maritime industry.
Key points from Interpretation Note 131
- Exemption: Ships mainly used for international transportation of passengers or goods qualify for exemption from income tax, capital gains tax, dividends tax, and withholding tax on interest.
- Requirement: The operating company must be a South African resident and own/operate one or more South African ships.
- Purpose: To encourage the use of the South African flag and promote a strong domestic maritime industry.
The note also explains the definitions used in the law and provides examples for applying the tax relief.
