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NEWSFLASH: PLEASE TAKE NOTE THAT ALL BUSINESSES OR INDIVIDUALS THAT HAVE PREVIOUSLY NOT DECLARED THEMSELVES TO SARS HAVE BEEN GRANTED AMNESTY BY TREVOR MANUEL! COME TALK TO US.NATURAL PERSONS - TAX RATES
Year of assessment ending 28 February 2007 Taxable Income (R) Rates of Tax (R) 0 - 100 000 18% of each R1 100 001 - 160 000 18 000 + 25% of the amount above 100 000 160 001 - 220 000 33 000 + 30% of the amount above 160 000 220 001 - 300 000 51 000 + 35% of the amount above 220 000 300 001 - 400 000 79 000 + 38% of the amount above 300 000 400 001 and above 117 000 + 40% of the amount above 400 000 NATURAL PERSONS – TAX THRESHOLDS Below age 65 R40 000 Age 65 and over R65 000 NATURAL PERSONS – TAX REBATES Primary (All natural persons) R7 200 Additional (Persons 65 and older) R4 500 Rebates are reduced proportionally where the period of assessment is less than 12 months. NATURAL PERSONS – PROVISIONAL TAX The following persons do not have to register for provisional tax: Below age 65 - Taxable non-employment income of R10 000 or less Age 65 and over - Annual taxable income consists exclusively of remuneration, interest, dividends or rent from the lease of fixed property and is R80 000 or less NATURAL PERSONS – FOREIGN DIVIDENDS Most dividends received from foreign entities are taxable. Recognition will be given for foreign tax paid. NATURAL PERSONS - EXEMPTIONS Interest income and taxable dividends Below age 65 R16 500 Age 65 and over R24 500 Only R2 500 of the above may be applied to foreign interest and foreign dividends Interest earned by non-residents who are absent from South Africa for 183 days or more per annum and who are not carrying on business in South Africa are exempt (criteria applied for residents of common monetary area). Dividends received by a taxpayer are exempt from normal income tax. NATURAL PERSONS - DEDUCTIONS Current pension fund contributions: The greater of - 7.5% of remuneration from retirement funding employment, or - R1 750 Excess may not be carried forward to the following year of assessment, but will be taken into consideration upon retirement Arrear pensions fund contributions Limited to - R1 800 Excess carried forward to the following year of assessment. Current retirement annuity fund contributions The greater of -15% of taxable non-retirement funding employment income, or - R3 500 less current pension fund contributions, or - R1 750. Excess carried forward to the following year of assessment. Arrear retirement annuity fund contributions Limited to - R1 800 Excess carried forward to the following year of assessment Donations Qualifying Public Benefit - Limited to 5% of taxable income before medical Organisations expense deduction. Subsistence allowances and advances Accommodation inside Republic: Meals and incidental costs - R196* per day Incidental costs only - R60* per day Accommodation outside Republic: - $190* per day Deduction only if person spends at least one night away from usual place of residence for business purposes. *Subject to change NATURAL PERSONS - DEDUCTIONS (CONTINUED) Qualifying Medical expenses Below age 65 Medical scheme contributions above the caps of: up to R500 for each of the first two persons covered, and R300 for each additional dependant. ·Other medical expenses are limited to the amount exceeding 7.5% of taxable income Below age 65 (Handicapped family members) ·Unlimited Age 65 and over ·Unlimited Other deductions available ·Bad debt in respect of salary ·Premiums paid on certain income protection policies NATURAL PERSONS – FRINGE BENEFITS
Company cars Taxable benefit – one vehicle - 2.5% per month of determined value (usually the cash cost excluding VAT) of first vehicle Taxable benefit – many vehicles - 2.5% per month of vehicle with highest determined value and 4% per month of determined value of additional vehicles Taxable benefit is reduced in the following cases: Employee pays all fuel for private use - 0.22% points Employee pays all cost for maintenance - 0.18% points Interest-free or low-interest loans Taxable benefit - Actual interest rate less Official interest rate Official interest rate - 8% from 1 September 2005 Residential accommodation Taxable benefit - Greater of formula-based benefit or, - cost to the employer Other fringe benefits Taxable benefit (in general) ·Value of benefit less Consideration given Only R2 500 of the above may be applied to foreign interest and foreign dividends. Interest earned by non-residents who are absent from South Africa for 183 days or more per annum and who are not carrying on business in South Africa are exempt (criteria applied for residents of common monetary area). Dividends received by a taxpayer are exempt from normal income tax
TAX RATE AND THRESHOLD GUIDE – 2006/7 COMPANIES – TAX RATES Normal company tax Financial years ending between 1 April 2006 and 31 March 2007 Type Rate of tax Companies and close corporations 29% Small business corporations (turnover below R14 000 000) R0 – R40 000 0% R40 001 – R300 000 10% R300 001 and above 29% Employment companies 34% South African branches of foreign resident companies 34% Tax on retirement funds Gross interest, net rental and foreign dividend income of retirement funds (pension, provident, retirement annuity funds and untaxed policy holder funds of long-term assurance companies) 9% Secondary tax on companies (STC) 12.5% - Calculation of STC based on dividends declared less dividends receivable - South African branches of foreign resident companies are exempt from STC - With effect from 1 January 2003 liquidation or deregistration dividends declared Skills Development Levy All employers - 1% of the total remuneration paid (exclusions apply) Employers paying annual remuneration of less than R500 000 are exempt from Skills Development Levies from 1 August 2005. This will apply even if any number of employees is registered for PAYE. Unemployment Insurance Contributions All employers - 2% of remuneration below a determined amount Contributions are paid monthly consisting of the 1% contribution by employer and 1% contribution by employee. Employers not registered for PAYE or SDL purposes must pay the contributions to the Unemployment Insurance Commissioner. TRUST – TAX RATES Year of assessment ending 28 February 2007: Type Rate Trusts 40% Special trusts Natural person tax rate Testamentary trusts for benefit of minor children Natural person tax rate TAXATION OF CAPITAL GAINS Residents and non residents are subject to capital gains tax at the following rates: Taxpayer Inclusion rate (%) Maximum Effective rate (%) Individual 25% 10% Trusts - Special 25% 10% - Other 50% 20% Companies - Ordinary 50% 14.5% Small business corporation 50% 14.5% Employment company 50% 17% CGT triggered on: - Disposal of assets Disposals include: - Donation, exchange, loss, death, emigration Exclusions include: - Disposal of primary residence: R1 500 000 of capital gain/loss - Death exclusion: R60 000 - Most personal use assets - Retirement benefits - Payments in respect of original long-term insurance policies - R12 500 reduction p.a. on capital gain/loss by individual or
OTHER TAXES DUTIES AND LEVIES Transfer Duty Rates applicable to natural persons acquiring property: Value of property (R) Rate of tax 0 – 500 000 0% 500 001 – 1 000 000 5% of the value above R500 000 1 000 001 and above R25 000 + 8% of the value exceeding R1 000 000 Rate applicable to other persons: 8% of the value - Transfer duty is payable on transactions that are not subject to VAT. - With effect from 13 December 2002 the disposal of shares or members Estate Duty All property of South African residents ·20% South African property of non residents ·20% Allowable deductions: ·Basic deduction: R2 500 000 - All property accruing to surviving spouse - Certain liabilities - Bequests to public benefit organizations Donations Tax Value of donation ·20% Exemptions: ·Donation between spouses - Donation to certain public benefit organisation - R50 000 of donation by natural persons - R10 000 of donation by other persons Value added Tax Standard rate - 14% Registration levels applicable based on annual income of taxable goods and services: Less than R20 000 - Deregistration compulsory Less than R300 000 - Registration voluntary More than R300 000- Registration compulsory More than R30 000 000 - Monthly returns Stamp Duty Lease agreements of fixed property (exemption for agreements where the duty is less than R500 Registration of transfer and cancellation of unlisted marketable securities (exemption for interest-bearing securities). Uncertificated Securities Tax On issue - 1/4 of a per cent On a change in beneficial ownership of listed ·1/4 of a per cent securities which are not interest-bearing Tax on International Air Travel Per passenger departing on international flights ·R120 Per passenger departing on flights to SACU countries ·R60 RSC Levy To be abolished from July 2006 RESIDENCE BASIS OF TAXATION With effect from 1 January 2001 residents of Resident is defined as: Individual: - Any person who is ordinarily resident in the republic - Any person who was physical present in >91 days per tax year for 4 consecutive tax years and was physical
SARS INTEREST RATES Type Rate (pa) With effect from 1 September 2005 Fringe benefits - interest-free or low-interest loan 8% With effect from 1 November 2004 Late or underpayments of tax 10,5% Refund of overpayments of provisional tax 6,5% Refund of tax: successful appeal or appeal conceded 10,5% Refund of VAT after prescribed period 10,5% Late payments of VAT 10,5% Customs and Excise 10,5% TAX CALENDER VAT ·25th day after the end of the vat period PAYE ·7th day of each following month SDL ·7th day of each following month RSC ·20th day of each following month STC ·Last day of the month in which the dividend cycle ends Provisional Tax: Natural Persons First ·6 months prior to year end (31 August) Second ·at year end (28 February) Third ·7 months after year end (30 September) Provisional Tax: Corporate (year end other than 28 February) First ·6 months prior to year end Second ·at year end Third ·6 months after year end If one of the dates fall on a weekend or public holiday payment must be made on the preceding working day.
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