Page 27 - GA Maclachlan Tax Guide 2024

DIVIDENDS TAX

Dividends tax is a tax levied on the shareholder at a rate of 20% on dividends paid�
However, where a dividend in specie is paid, dividends tax is a tax levied on the
company declaring the dividend� Dividends tax is normally withheld by the company
paying the dividend and is payable at the end of the month following the month
in which the dividend was paid� The repayment of contributed tax capital by a
company would be regarded as a return of capital and not subject to dividends tax�
Dividends tax exemptions
A dividend is exempt from dividends tax if the dividend is not a dividend in specie
and the beneficial owner is:
■ A SA company
■ The Government and various quasi government institutions
■ Public Benefit Organisations
■ Environmental rehabilitation trusts
■ Pension, provident, similar funds and medical schemes
■ A shareholder in a registered micro business (only the first R200 000 of
dividends paid during a particular year of assessment)
■ A non-resident and the dividend is paid by a South African Listed non-
resident company
Where the dividend comprises of a dividend in specie, the following exemptions
are applicable:
■ The same exemptions as above subject to the beneficial owner submitting a
declaration and written undertaking
■ Where the beneficial owner forms part of the same group of companies
Loans to connected persons
Dividends tax will be calculated as 20% of the difference between the official rate
of interest in respect of the debt and the amount of interest payable in respect of
the debt� Where the official rate of interest on the debt does not exceed the actual
interest payable on the debt, the value of the deemed dividend is deemed to be
nil� Dividends tax on a loan to a connected person is regarding is a dividend in
specie and as such the liability of the company and not the shareholder�

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