South Africa: Part 6.1 - Taxation - Principal Taxes In South Africa

Last Updated: 9 April 1996
Most taxes in South Africa are levied by the central government. The new constitution gives some taxing powers to the provinces. These mainly involve assessment rates and other taxes based on immovable property.

The tax system is currently in a state of transition. In 1987, the Margo Commission of Inquiry into the tax structure of South Africa reported its findings. The general recommendations of the commission relate to a broader based fairer system of taxation with a reduction of personal income tax rates and a move towards indirect taxes, the withdrawal of special income tax allowances and specific provisions to counter tax avoidance schemes. Certain recommendations have been accepted by the government and many have been incorporated into the tax system. In 1994 a new commission was established to enquire into a wide range of tax matters. Its reports are expected to give rise to significant changes in tax legislation in the next few years. For many years married couples were taxed as a unit, with the burden falling largely on the husband. From the 1996 year of assessment, under the influence of the New Constitution's emphasis on equal treatment for all, the individual has been adopted as the basic tax paying unit, and no distinction is made between males and females or between married or single people.

Readers are advised to seek specific advice on changes in the tax system. These may depart substantially from earlier principles. The government's Reconstruction and Development Programme requires funding to be made available to achieve wide-ranging social changes, and this is likely to impact substantially on the system of taxation.


6.1.1 Direct Taxes

Direct taxes, which are covered in more detail later in this chapter, may be summarised as follows:

Income Taxes:

  • individual income tax - an annual tax on the income of partnerships and individuals (see article 'Taxation - Other Entities' and article 'Taxation - Individuals').
  • company tax - an annual tax on the income of companies and close corporations (see article 'Taxation - Corporate Tax').
  • secondary tax on companies - a tax imposed on dividends declared by companies and distributions made by close corporations payable and borne by the companies and close corporations (see article 'Taxation - Corporate Tax').

Capital Taxes:

  • donations tax - a gift tax payable by the donor on the value of property disposed of by donation by South African residents and private companies (see article 'Taxation - Other Taxes');
  • estate duty - an inheritance tax payable by the estate on the value of property of a deceased who was resident in South Africa at the date of death (see article 'Taxation - Other Taxes').

There is currently no capital gains tax in South Africa.

6.1.2. Indirect Taxes

South Africa imposes the following three indirect taxes:

  • value added tax - an invoice-based value-added tax is levied on supplies of goods and services (see article 'Taxation - Other Taxes');
  • excise and customs duties - for details see article 'Taxation - Other Taxes';
  • stamp duties - charges levied on certain documentary instruments (see article 'Taxation - Other Taxes').

6.1.3. Administration

Company tax is payable for the fiscal year that coincides with a company's financial year.

The tax year of individuals ends on the last day of February in each year. Tax is payable in instalments by all companies and by those individuals who are classified as provisional taxpayers. Provisional tax consists of two payments, the first falling due six months after the commencement of the year of assessment and the second at the end of the year of assessment. A third ("topping up") payment must be made within seven months after the end of the year of assessment if, in the case of a company whose taxable income exceeds R20 000, or an individual whose taxable income exceeds R50 000, the total amount paid by way of provisional taxes is less than the amount of tax assessed. Interest (non-deductible) is payable on the shortfall at a prescribed rate - currently 15%. Conversely, if the total amount paid exceeds the tax assessed, interest is payable to the taxpayer at a prescribed rate - currently 12% on the amount overpaid. That interest is not taxable in the hands of non-resident taxpayers.

Employers are required to deduct employees tax from their employees' remuneration and to pay such amounts over to the authorities on a monthly basis. Employees tax thus deducted is allowed as a credit against the total amount of an employee's liability for tax as finally assessed on the basis of his or her annual return. Under the SITE system (Standard Income Tax on Employees), however, individuals earning less than R50 000 a year from employment are not required to file an annual income tax return, and the employees tax deducted from their salaries represents their full and final liability for tax. SITE tax is deducted at rates varying, currently, from 15% to 45%.

For further information please contact: 

Werksmans Attorneys 

Werksmans Chambers, 22 Girton Road, Parktown, Johannesburg 2193 
P.O. Box 927, Johannesburg 2000 South Africa

Enquiries:        Mr Charles Butler
Telephone         27 (011) 488-0000
Telefax           27 (011) 484-3100/3200
E-Mail Address

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions