On 30 August 2021, the South African Revenue Service (SARS) published 2021 Tax Guide or Budget 2021 Tax Guide, which provides a synopsis of the most important tax, duty and levy related information for 2021/22. The guide includes the Tax Administration Laws Amendment Act 24 of 2020, the Taxation Laws Amendment Act 23 of 2020, and the Rates and Monetary Amounts and Amendment of Revenue Laws Act 22 of 2020. Some of the key points are given below:

Corporate tax

The corporate income tax rate is 28% of taxable income applies for companies whose years of assessment ending on any date between 1 April 2021 and 31 March 2022. Residents are taxed on their worldwide income, subject to certain exclusions. The general principle is that foreign taxes on foreign sourced income are allowed as a credit against South African tax payable. This is applicable to individuals, companies, close corporations, trusts and estates.

Small Business Corporations

Companies those have assessment years ending on any date between 1 April 2021 and 31 March 2022 required to pay the following tax according to their taxable income:

Taxable TurnoverTax rate
1 – 87 3000% of taxable income
87 301 – 365 0007% of taxable income above 87 300
365 001 – 550 00019 439 + 21% of taxable income above 365 000
550 001 and above58 289 + 28% of the amount above 550 000

Micro business

Taxable TurnoverTax rate
1 – 335 0000% of taxable income
335 001 – 500 0001% of taxable turnover above 335 000
500 001 – 750 0001 650 + 2% of taxable turnover above 500 000
750 001 and above6 650 + 3% of taxable turnover above 750 000

WHT rate on interest, royalties and immovable property

A 15% tax is imposed on the gross amount of royalties and interest from a South African source payable to nonresidents. Interest is exempt if payable by any sphere of the South African government, a bank, or if the debt is listed on a recognized exchange. A final 15% tax is imposed on gross amounts payable to non-residents, for activities exercised by them in South Africa as entertainers or sportspersons. A provisional tax is withheld on behalf of non-resident sellers of immovable property in South Africa, to be set off against the normal tax liability of the non-residents. The tax to be withheld from payments to the non-residents is at a rate of 7.5% for a non-resident individual, 10% for a non-resident company, and 15% for a non-resident trust that is selling the immovable property.

 A 20% dividends tax is paid by resident companies and non-resident companies in respect of shares listed on the JSE. Dividends are tax exempt if the beneficial owner of the dividend is a South African company, retirement fund or other exempt person.

VAT

VAT is levied at the 15% standard rate on the supply of goods and services by registered vendors. A vendor making taxable supplies of more than R1 million per annum must register for VAT. A vendor making taxable supplies of more than R50 000, but not more than R1 million per annum, may apply for voluntary registration. Certain supplies are exempt from VAT.

Capital gains tax

Capital gains on the disposal of assets are included in taxable income.

Individual tax

Individuals and special trusts are subject to following tax rate from 1 March 2021 to 28 February 2022:

Taxable TurnoverTax rate
1 – 216 20018% of taxable income
216 201 – 337 80038 916 + 26% of taxable income above 216 200
337 801 – 467 50070 532 + 31% of taxable income above 337 800
467 501 – 613 600110 739 + 36% of taxable income above 467 500
613 601 – 782 200163 335 + 39% of taxable income above 613 600
782 201 – 1 656 600229 089 + 41% of taxable income above 782 200
1 656 601 and above587 593 + 45% of taxable income above 1 656 600