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Five years of uncertainty around dividends withholding tax laid to rest

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Five years of uncertainty and discussion around the introduction of dividends withholding tax have at last been laid to rest, says Deloitte.

Legislation that took effect on 01 April 2012 specifies a dividend withholding tax (DWT) rate of 15%, which is, however, subject to applicable domestic exemptions or tax treaties,” says Musa Manyathi, Associate Director in Taxation Services at Deloitte.

“The introduction of DWT marked the end of Secondary Tax on Companies (“STC”), which, until now, had been part of our tax regime for nearly 20 years – although it had never quite been understood by our major international trading partners. This ultimately was the fatal blow delivered to its existence.”

“DWT as an alternative tax ensures South Africa’s alignment with the international trend on the taxation of dividends. It therefore encourages much-needed foreign investment, and should have the benefit of compensating the fiscus for revenues lost as a result of the abolition of STC.”

“Whilst STC was a tax borne by the company declaring the dividend, DWT, in line with the rest of the world, is borne by the shareholder provided that the dividend is a cash dividend,” says Manyathi. “Although the DWT legislation is only eight months old, it has already undergone significant changes,” notes Manyathi.

Download the full article . . . .  Five years of uncertainty around dividends withholding tax has been laid to rest

For a more detailed discussion around dividends withholding tax, contact Musa Manyathi (Associate Director in Deloitte Taxation Services) at mmanyathi@deloitte.co.za

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Deloitte urges the Minister to give the property development sector clarity on tax positions

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The 2013/2014 budget speech will present an ideal opportunity for SARS to provide the property development sector with clarity on several of their tax concerns and, in so doing, provide adequate incentives to help expand the nation’s infrastructure and create employment, says Deloitte.

Izél Du Plessis, Deloitte Tax Director and Regional Tax Leader for Pretoria, says that “although taxpayers who own new and unused commercial buildings are permitted to deduct capital allowances on these buildings from their taxable income, there have recently been two occasions where confusion regarding this principle has arisen.”

“The first example of confusion occurring involved ownership of a building transferred within a group of companies. Section 45, one of the corporate rules of the Income Tax Act, provides for tax roll-over relief to be provided where assets are sold from one group company to another,” says Du Plessis.

“Section 45 states that the new owner will “step into the shoes” of the previous owner as if the building has always belonged to it. To qualify for the relief provided in terms of this section it is required that, if the building constitutes an allowance asset (a capital asset on which tax allowances are claimed), for the seller, it must also be acquired as an allowance asset by the purchaser.

Download the full article . . . . Give the property development sector clarity on tax positions and create employment Deloitte urges the Minister

For a more detailed discussion on the contents of this article, contact Izél Du Plessis (Director – Tax at Deloitte & Touche) at iduplessis@deloitte.co.za

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South African Budget 2012 : Budget Speech Facts & Figures

Deloitte South Africa offers a unique view into the intricacies of the national budget with special focus on VAT, international tax, personal income tax, grants and incentives, carbon tax and energy as well as company tax to name a few. Please also have a look at the 2012 South African budget infographic as a snapshot into this year’s facts and figures.

Also download Deloitte’s Quick Tax Guide for a complete snapshot to keep as your own personal reference.

Budget 2012 Commentary

Budget 2012 Infographic

Download the complete Deloitte Budget 2012 infographic here – Budget 2012 Infographic.

Budget 2012 Insomnia Index

Download the 2012 Budget Insomnia Index results here – Budget Insomnia Index

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