The 2011 budget – the latest annual statement by the South African minister of finance about the nation’s finances – contained some interesting proposals relating to the taxation of cross-border transactions.
It stated that a new dividends tax would replace the secondary tax on companies (STC) from 1 April 2012. Any dividend paid by South African-resident companies and any dividend paid by non-resident companies in respect of listed shares on or after 1 April 2012 will be subject to the dividends tax.
A foreign dividend paid in respect of unlisted shares will thus not be subject to the dividends tax. Such foreign dividends will therefore be subject to normal tax.
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Peter Dachs is co-head of the tax department at Edward Nathan Sonnenbergs
150 West Street
Tel: +27 11 269 7600
Fax: +27 11 269 7899