Verified Facts
Tax rates in South Africa range from 18% to 45% for individuals and 28% for corporations, with various deductions, allowances, and incentives available for both personal and business income.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
South Africa has a worldwide taxation system, which means that residents are taxed on their global income, regardless of where it is earned. Non-residents, on the other hand, are only taxed on their South African-sourced income. Residency rules for tax purposes are based on the physical presence test, which considers the number of days spent in the country, as well as the ordinarily resident test, which looks at an individual's intentions and ties to the country.
The tax system in South Africa is administered by the South African Revenue Service (SARS), which is responsible for collecting taxes, customs, and excise duties. The tax year in South Africa runs from March 1 to February 28 of the following year, and taxpayers are required to file their tax returns by the end of June. South Africa has a comprehensive tax treaty network, with agreements in place with 79 countries to prevent double taxation and fiscal evasion.
Personal Income Tax
| Income Bracket (ZAR) | Tax Rate |
|---|---|
| 0 - 205,900 | 18% |
| 205,901 - 321,600 | 26% |
| 321,601 - 445,100 | 30% |
| 445,101 - 584,200 | 35% |
| 584,201 - 744,800 | 39% |
| 744,801 and above | 45% |
Individual taxpayers in South Africa are entitled to various deductions and allowances, including a primary rebate of ZAR 14,958, as well as deductions for medical expenses, retirement contributions, and donations. Taxpayers are required to file their tax returns electronically, and the deadline for submission is usually the end of June. Taxpayers who fail to submit their returns on time may be subject to penalties and interest.
Corporate & Business Tax
- The corporate tax rate in South Africa is 28%, which applies to companies that are tax resident in the country.
- Small business corporations with a turnover of less than ZAR 20 million may qualify for a reduced tax rate of 20%.
- South Africa has several special economic zones and industrial development zones that offer tax incentives and other benefits to businesses that operate within these areas.
- Companies that are tax resident in South Africa are required to register with SARS and obtain a tax clearance certificate.
- Value-added tax (VAT) registration is compulsory for businesses with an annual turnover of ZAR 1 million or more.
VAT / Sales Tax
- The standard VAT rate in South Africa is 15%, which applies to most goods and services.
- A zero-rated VAT applies to certain basic food items, as well as to exports of goods and services.
- Exemptions from VAT apply to certain goods and services, such as financial services and residential accommodation.
- Tourist refund schemes are available for international tourists who purchase goods in South Africa and take them out of the country.
For Expats & Foreign Workers
- Tax residency rules for expats and foreign workers are based on the physical presence test and the ordinarily resident test.
- South Africa has double taxation agreements in place with 79 countries to prevent double taxation and fiscal evasion.
- Expats and foreign workers who are tax resident in South Africa may be required to register with SARS and obtain a tax clearance certificate.
- Social security contributions are compulsory for employees and employers in South Africa.
- Expats and foreign workers may be subject to remittance rules, which require them to repatriate their earnings to their home country.
- Foreign employment income may be exempt from tax in South Africa, depending on the individual's tax residency status and the terms of their employment contract.
Crypto & Investment Income
- Investment income, such as dividends and interest, is subject to tax in South Africa.
- Capital gains tax applies to the disposal of cryptocurrencies, such as Bitcoin, and is taxed at a rate of 18% or is included in the individual's taxable income.
- Taxpayers who invest in unit trusts or collective investment schemes may be subject to tax on their investment income.
- Foreign investment income may be subject to tax in South Africa, depending on the individual's tax residency status and the source of the income.