Tax Treatment of Non Residents South Africa

Tax Treatment of Non Residents South Africa
Tax Treatment of Non Residents South Africa

Below we take you through the main South African Personal Taxes:

Income Tax

South Africa personal taxation is calculated on a residency based system. This means that no matter where the income comes from residents must pay tax.

That said, the tax system does allow for some exemptions for certain types of income and double taxation agreements are in place with many countries allowing credit for foreign taxes paid.

If the person is a Non South African resident, tax is only payable on their South African income.

Capital Gains Tax

Capital gains tax is a direct personal tax which is payable when certain assets are disposed. Disposal includes:

  • The sale of an asset;
  • Donation of an asset;
  • The loss or destruction of an asset.

Capital Gains tax is the disposal proceeds minus the base cost, the gain (profit). The first R40,000 gain is exempt and thereafter 18% of the gain is added to your income and tax is charged as per the income tax schedule.

Transfer Duty

Once again transfer duty is a direct tax that is levied on the taxpayer when they purchase a property.

Donations Tax

Donations tax came to being as a measure to counter accordance of estate duty (inheritance tax). Each year an individual may donate R100,000; any amount over this is taxed at 20%. Donations between spouses is exempt.

Estate Duty

For South African residents duty is payable on the entire estate, for non residents it is payable on South African assets only. As per donations tax, Estate duty is levied at 20% on the estate but with the first R3.5 million not dutiable. This is increased to R7 million in the event of it being a married couple.

VAT (Value Added Tax)

An indirect tax which is payable on goods or services purchased at a rate of 15%.

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