South Africa
follows a revenue based income tax system meaning that income
earned from a South African source will be subject to ordinary
income tax. Accordingly, any rental earned by non-resident in
respect of South African properties will be subject to income
tax and it is the responsibility of the non-resident to register
as a South African tax payer.
Income earned by natural persons below R27 000 per annum (for
persons under the age of 65) and R42 640 (for persons above the
age of 65) is exempt from income tax, whilst all income earned
over and above the aforesaid amounts, will be taxed at a
marginal rate applicable to that non-resident.
Corporate entities are subject to a tax rate of 30% of each Rand
of taxable income whilst the equivalent rate for a trust is 40%.
Non-resident companies are taxed at a rate of 35% but are exempt
from Secondary tax on companies (STC) in respect of dividends
paid.
Capital Gains
Tax
Non-residents
are only liable to pay CGT on the disposal of the following
:
-
Immovable property situated in South Africa, including
any right or interest in immovable property.
- Assets
of a permanent establishment of a non-resident through
which trade is carried on in South Africa.
CGT is payable
in the year in which the asset is disposed of and is
calculated by adding 25% of the capital gain, or profit, to
the individuals income for that year and taxing that income
tat the individuals marginal rate of income tax. The maximum
marginal income tax rate for individuals in South Africa is
presently 40%. The capital gain is calculated and disclosed
in the individual’s income tax return for the year in which
it is sold. Thus, if a non-resident disposes of an immovable
property in any year of assessment and is not already
registered as a South African taxpayer, her or she will have
to register as such and submit an income tax return
reflecting the calculation of the capital gain and will be
liable for the payment of CGT on that gain.
South African residents to not pay CGT on the first R1
million of profit made on the disposal of their primary
residence. However, non – residents will not qualify for
this exemption if there primary residence is not in South
Africa.
