Summary of Corporate Taxes
A South African (SA)-resident company is subject to corporate income tax (CIT) on its worldwide income, irrespective of the source of the income. Non-residents are taxable on SA-source income.
In South Africa, the CIT rate applicable for corporate income of both resident and non-resident companies is a flat 28%. It was announced in the February 2021 National Budget that this rate would be reduced to 27% with effect for tax years commencing on or after 1 April 2022.
Small business corporations (i.e. companies with only natural persons as members/owners and with gross income of not more than 20 million South African rand [ZAR]) are taxed at the following rates:
- 0% on the first ZAR 87,300 of taxable income.
- 7% on taxable income above ZAR 87,300 but not exceeding ZAR 365,000.
- 21% on taxable income above ZAR 365,000 but not exceeding ZAR 550,000.
- 28% on taxable income exceeding ZAR 550,000.
Other Useful Information
Alternative turnover-based tax for very small companies
To reduce the compliance costs for very small companies, a turnover-based presumptive tax is available. Companies with a turnover of less than ZAR 1 million per year can elect to pay this tax instead of normal CIT, at a rate ranging from 0% to 3%, depending on the level of turnover.
Dividends tax
Dividends tax is imposed at 20% on dividends declared and paid by all resident companies as well as by non-resident companies in respect of shares listed on a South African exchange (i.e. generally the Johannesburg Stock Exchange [JSE]).
Dividends are tax exempt if the beneficial owner of the dividend is an SA-resident company,
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