SOUTH AFRICA Law and Practice Contributed by: Magda Snyckers and Cameron Nathaniel, ENS
or non-resident) where more than 80% of the value of the equity shares being disposed of is attributable, directly or indirectly, to South African immovable prop - erty or rights to this, and more than 20% of the equity shares are held by connected parties. 2.8 Other Taxes on Transactions Other taxes that may be payable by an incorporated business include the following. • A transfer duty is imposed under the Transfer Duty Act, 1949 on the acquisition of real property (ie, land and buildings thereon) and certain interests in land. The duty is imposed according to a sliding scale with reference to the value of the property transferred. • Securities transfer tax is imposed on any transfer of either (i) a listed or unlisted security of a South African incorporated company, or (ii) a South African stock exchange listed security of a for - eign incorporated company. The applicable rate is 0.25% on the taxable amount, which is generally the higher of the consideration given for the trans - fer of a security or the market value of the security. • Value added tax (VAT) is levied at 15% on the sup - ply of goods and services in South Africa and on the importation of goods and services. • Donations tax is levied at the rate of 20% (of the value under ZAR30 million) and 25% (of the value over ZAR30 million) upon the gratuitous disposal of property by a resident or where the Commissioner of the South African Revenue Service (SARS) is of the view the consideration is inadequate. 2.9 Other Notable Taxes Skills Development Levy (SDL) The Skills Development Levy (SDL) is payable by employers at a rate of 1% of remuneration. Employ - ers paying annual remuneration of less than or equal to ZAR500,000 are exempt from paying SDL. Unemployment Insurance Fund (UIF) Both employees and employers must each contribute 1% of the employee’s remuneration (ie, 2% in total) to the unemployment insurance fund (UIF), based on a maximum monthly remuneration of ZAR17,712 (ie, maximum monthly contribution is ZAR354.24), for purposes of insuring employees against the loss of
earnings due to termination of employment, illness and maternity leave. Carbon Tax Carbon tax is imposed on entities that operate emis - sions generation facilities at a combined installed or production capacity equal to or above the carbon tax threshold for the activity or sector in which the tax - payer is operating. The emissions that are subject to carbon tax are determined in accordance with either an approved reporting methodology of the Depart - ment of Forestry, Fisheries and the Environment, or the prescribed formulas in terms of the Carbon Tax Act, 2019. Persons conducting an activity or activities in South Africa resulting in greenhouse gas emissions above the threshold must license each of their emissions generation facilities with SARS as customs and excise manufacturing warehouses for environmental levy purposes. As of 1 January 2025, the carbon tax rate is ZAR236 (ZAR190 in 2024) per tonne of carbon dioxide equiva - lent emissions. A taxpayer may reduce its greenhouse gas emissions liability by utilising any allowances and deductions to which the taxpayer is entitled. 3. Corporations and Non-Corporate Businesses 3.1 Form of Closely Held Local Businesses Closely held local businesses operate either in corpo - The income tax rates applicable to resident individuals range from 18% to 45% on a sliding scale as opposed to the corporate rate of 27%. “Personal service pro - viders”, as defined in the Act (which may be trust or companies), are regarded as employees, and employ - ee tax must be withheld from payments made to them. 3.3 Restrictions on Retention of Earnings by Closely Held Corporations There is no applicable information in this jurisdiction. rate form, in partnerships or as trusts. 3.2 Individual and Corporate Rates
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