Dealing with tax in South Africa while being overseas can be a tricky process and pose complications that would demand expert guidance. Bradford Jacobs is in the front rank of international taxation, payroll and recruitment specialists. Over 20 years of experience in the field ensures our clients comply with every aspect of taxation legislation wherever they operate worldwide. The combination of local ‘know-how’ plus global expertise is essential for foreign companies moving into South Africa, a gateway to further expansion throughout the African continent.
The experience that Bradford Jacobs brings to the table will answer all your questions regarding South African taxes, guaranteeing compliance across the board for personal and payroll taxes; several levels of corporate taxes, alternative turnover taxes; dividends tax; capital gains tax; Value Added Tax (VAT) and various indirect tax applications as well as customs and excise duties. We also guide companies through the limited responsibilities towards social insurance taxes. Our dedicated specialists take the burden off your shoulders while you focus on establishing your business to access the massive potential in your new territory. From locating the brightest talent to running your payroll and answering all your taxation questions, our Professional Employer Organisation (PEO) and Employer of Record (EOR) specialists are with you every step of the way.
Personal Income Tax (PIT):
Progressive tax rates apply in seven bands, with residents taxed on worldwide income and non-residents liable only for South Africa-sourced income, with the same percentage rates applying to both. Annual earnings up to ZAR 226,000 (EUR 13,508, USD 13,750) are taxed at 18% to a top rate of 45% for the excess over ZAR 1,731,601 (EUR 103,588, USD 105,380). These rates apply to February 28 2003.
Social Insurance Taxes:
South Africa has no comprehensive national health or social security system. Employers and employees each contribute 1% of payroll and salary towards the Unemployment Insurance Fund (UIF).
Corporate Income Tax (CIT):
Until March 31 2023, a rate of 28% applies to the taxable income of both resident and non-resident companies, with the rate down to 27% for subsequent tax years after that date. Until March 31 2023, lower rates apply to companies with gross income under ZAR 20 million (EUR 1,205,280, USD 1,237,040). There is also an alternative tax for small companies where turnover is under ZAR one million (EUR 59,840, USD 60,857).
Indirect Taxes:
The standard rate for Value Added Tax is 15% on goods and services plus imports. The zero-rated band includes some foodstuffs and exports. Tax is paid by all companies registered as vendors with the South African Revenue Service (SARS).
Withholding Tax on Interest (WTI):
A tax of 15% is withheld on interest paid to a foreign individual or company.
Capital Gains Tax (CGT):
Individuals, companies and trusts are taxed at various rates, with tax treated as income. The applicable rates for 2022 for individuals and special trusts is 18%; companies at 22.4% (reduced to 21.6% for the tax year beginning in 2023); other trusts at 36%.
| From | Not Over | Tax % |
|---|---|---|
|
ZAR 0 |
ZAR 226,000 (EUR 13,508 - USD 13,750) |
18% |
|
ZAR 226,001 |
ZAR 353,100 (EUR 21,130 - USD 21,513) |
26% |
|
ZAR 353,101 |
ZAR 488,700 (EUR 29,268 - USD 29,744) |
31% |
|
ZAR 488,701 |
ZAR 641,400 (EUR 38,413 - USD 39,100) |
36% |
|
ZAR 641,101 |
ZAR 817,600 (EUR 49,000 - USD 49,840) |
39% |
|
ZAR 817,601 |
ZAR 1,731,600 (EUR 103,588 - USD 105,380) |
41% |
|
Over ZAR 1,731,600 |
- |
45% |
*Rates apply until April 2023.
South Africa has no comprehensive national health or social insurance system, meaning there are no significant employer contributions required. Employers contribute 1% of payroll on behalf of their employees to the Unemployment Insurance Fund (UIF).
For more information, download our free guide or get in touch with our consultants here