The South African Revenue Service (SARS) has published a comprehensive guide to dividends tax, Issue 5. The purpose of this guide is to assist taxpayers in gaining a more in-depth understanding of dividends tax. The foundation for this guide can be found in the various explanatory memoranda which supported the dividends tax legislation, but the explanations contained in these explanatory memoranda have been expanded with additional explanations and examples.
The guide deals, amongst others, with the following:
- introduction to dividends tax;
- the definitions of a company, contributed tax capital, dividend, dividend cycle, equity share, foreign dividend, listed company, listed share, share, beneficial owner, return of capital and regulated intermediary;
- levy of dividends tax, liability for dividends tax, deeming provisions and special rules applying to specified companies;
- exemption from dividends tax and relief from double taxation;
- withholding of dividends tax;
- secondary tax on companies credit;
- payment and recovery of dividends tax assessments, non-compliance, electronic communication and record-keeping;
- refund of dividends tax;
- rebate against normal tax or dividends tax in respect of foreign taxes on dividends; and
- company reorganisation rules – contributed tax contribution and dividends tax.
The information in this guide is based on the income tax and tax administration legislation (as amended) at the time of publication of this guide and includes the Rates and Monetary Amounts and Amendment of Revenue Laws Act 19 of 2021, the Taxation Laws Amendment Act 20 of 2021 and the Tax Administration Laws Amendment Act 21 of 2021. These Acts were all promulgated on 19 January 2022.