Are there any exemptions applicable to Dividends Tax?
Dividends payable to the following beneficial owners could be exempt from Dividends Tax (provided the required “declaration” and “undertaking” are submitted to the company or withholding agent in time):

Who is liable to pay Dividends Tax to SARS?
Generally speaking the Dividends Tax is a withholding tax. As such the tax is withheld from dividend payments and paid to the SARS by the company paying the dividend or,

I am an individual and I receive dividends, must I submit Dividends Tax information to SARS?
Individuals receiving dividend payments are not responsible for submitting any information to SARS. The company or regulated intermediary paying the dividend administers this aspect.

I am currently not registered for Income Tax (eg. I am a low income earner who earns income under the tax threshold and acquired some shares as a result of, for example, a BBBEE deal). Would I need to now register as a result of Dividends Tax?
No, if you are not required by law to register for income tax purposes you will not be required to do so merely as a result of the

Who is liable for the Dividends Tax?
The beneficial owner of the dividend is liable for the Dividends Tax - normally this would be the shareholder. However, if the particular dividend consists of a distribution.

What is meant by beneficial owner?
The beneficial owner is the person entitled to the benefit of the dividend attaching to a share.

What is a dividend?
A dividend is defined in section 1 of the Act, but in essence is any payment by a company for the benefit of a shareholder in respect of a share in that company

What is the rate of Dividends Tax?
Dividends tax was introduced at a rate of 15% when it came into effect on 1 April 2012. The rate was increased to 20% in respect of any dividend paid on or after 22 February 2017 (irrespective of when it was declared).

When will Dividends Tax come into effect
Dividends Tax applies to any dividend declared and paid on or after 1 April 2012.

What is the main difference between Dividends Tax and STC?
The main difference lies in who is liable for the tax. Dividends Tax is a tax levied on shareholders (beneficial owners of dividends) on receipt of dividends,

How is the STC credit calculated?
The STC credit is comprised of two possible sources: Any unused STC credits of the company brought forward from the final dividend cycle under the STC system,

How should the STC credit be applied?
The company paying the dividend must notify the beneficial owner of any part of the dividend that carries a STC credit, and must be applied pro rata to the full dividend.

Why is STC being replaced?
The main objectives behind the change to Dividends Tax are: To align the level of the taxation of dividends in South Africa with the international norm where the recipient of the dividend,

In what format should the notification to the beneficial owner be in respect of the portion of the dividend constituting a STC credit?
There is no format prescribed for this notification. However, it should be clear from the notification what the STC credit portion of

What happens if the company does not notify the beneficial owner of the STC credit portion of the dividend?
If the company does not notify the beneficial owner of the STC credit part of the dividend - (a) the Dividends Tax liability of the beneficial owner may not be reduced by the STC credit portion,

Should the company submit a STC return (IT56) reflecting the company’s available STC credits for the last dividend cycle under STC? If it does not will it lose the STC credits under the Dividends Tax system?
You only have to submit a STC return when it accompanies a STC payment (i.e. when STC is due). This requirement remains the same for the “final dividend cycle” under STC.

What is a regulated intermediary?
A regulated intermediary is a specified regulated person which administers dividend payments that were declared by a company after having received those payments from the company that declared the dividend.

Are medical schemes exempt from Dividends Tax?
Yes, medical schemes registered under the Medical Schemes Act of 1998 are exempt (provided the required declaration is submitted)

Are trade unions or stokvels exempt from Dividends Tax?
No, trade unions and stokvels are not exempt from Dividends Tax.

What are the required “declarations” and “undertakings” to be submitted to qualify for exemptions from Dividends Tax?
Dividends payable to certain beneficial owners (shareholders) could be exempt if the beneficial owners submit the required declarations and undertakings to the company / withholding agent prior to the payment of the dividend.

Who should complete the declaration and undertaking for exemptions?
The beneficial owner of the dividend, but only if the beneficial owner qualifies in terms of the exemptions provided for in

As a beneficial owner where can I obtain the declaration and undertaking form for exemptions for completion?
The declaration and undertaking form for exemption can be obtained from the company or withholding agent who issued the dividend to the shareholders (beneficial owners).

Do I have to complete a declaration and undertaking form for exemption for each dividend / share in my share portfolio?
You only need to declare your exempt status per the declaration and undertaking form once (per company / withholding agent) and it will remain valid until your

Will regulated intermediaries / companies accept faxed or scanned & e-mailed declarations and undertakings?
Yes. The declaration and undertaking may be submitted to the regulated intermediary / company via post, fax or e-mail.

How can an entity register for Dividends Tax?
The Dividends Tax number will be the entity’s Income Tax reference number. Dividends Tax transactions will be distinguishable from assessed income tax and provisional tax

Will STC and Dividends Tax overlap?
There is no overlap. If a dividend is declared prior to 1 April 2012 (irrespective of actual payment date) it will be subject to STC. Only where the dividend is declared and paid on or after

What is a dividend in specie?
A dividend in specie refers to distribution to shareholders in a form other than cash.

What triggers Dividends Tax?
Dividends Tax is triggered by the payment of dividends by any: South African tax resident company; or Foreign Company in respect of shares listed on the Johannesburg Stock Exchange.

Is there a difference in payment dates in respect of dividends declared on shares listed on the JSE and those on unlisted shares?
Where a declared dividend is payable to shareholders of a company listed on the JSE Ltd the tax is triggered on the actual payment date.

When will the trigger date be for dividends distributed in respect of units held in a Collective Investment Scheme in Securities?
In the case of a Collective Investment Scheme in Securities (CISS) the date the CISS distributes the dividend received by it triggers the liability for payment of the related Dividends Tax.

When does the Dividends tax have to be paid to SARS?
By the end of the month following the month in which the dividend was paid or became due and payable to the beneficial owner.

What is the impact of a company’s existing Secondary Tax on Company credits on the beneficial owner’s liability for Dividends Tax?
A company may utilise its available STC credits to reduce the liability for Dividends Tax of the beneficial owner of the dividend.

Who qualifies for a reduced rate of Dividends Tax?
Only persons who are not South African tax residents could possibly qualify for a reduced rate of Dividends Tax, and only if: The criteria for a reduced rate set out in the relevant DTA

Who should complete the declaration and undertaking form for reduced rates?
The beneficial owner of the dividend, but only if that person qualifies in terms of the criteria listed in the relevant DTA (normally Article 10).

Is the declaration and undertaking form with regards to reduced rates the same as the form used for exemptions?
Two different forms are prescribed, a form for exemptions and a separate form for reduced rates. Kindly contact the company or its withholding

Do I have to apply to SARS for a reduced rate in terms of Dividends Tax?
You do not have to apply to SARS for a directive or any confirmation. You only need to submit the required declaration and undertaking form to the company

What happens if I do not complete the form but do qualify for an exemption in terms of section 64F or a reduced rate in terms of a DTA?
If you do not complete and return the required form to the company / withholding agent, the latter must deduct the full Dividends Tax from your

Will I be able to claim a refund if I made a mistake or submitted the declaration form late?
Under certain circumstances refunds may be claimed provided the claim is made within three years from the date of payment of the dividend to you.

Is disclosure required with regard to linked units which comprise both dividends and interest?
Only the dividend component of linked units must be declared in the submission for Dividends Tax purposes. The interest portion should not

Are capital distributions subject to Dividends Tax?
Pure capital distributions are not dividends for tax purposes, and hence no Dividends Tax liability arises. However, if a portion of a capital distribution

Where can I find examples of the format for the beneficial owner declaration and undertaking forms for exemption and reduced rates?
"Refer to Annexure G of the BRSification (BRS) for examples of the required “declaration” and “undertaking” forms for both exemptions and reduced rates as published on the SARS website.

If I am a company / regulated intermediary, when may I start issuing the declaration and undertaking forms to beneficial owners?
You can already start issuing the forms. Refer to Annexure G of the BRSification (BRS) for examples of the required “declaration” and “undertaking” forms for both exemptions and reduced rates.

Where it is not cost effective to pay small amounts of dividends to beneficial owners (donated to a charity as per agreement instead), would these still be subject to Dividends Tax?
Yes. Dividends Tax must be withheld and be paid to SARS on these dividends even though the cost of processing these dividends often exceeds 

If a dividend vests in the beneficiary of a trust, who is required to report on the details of the beneficiary (as the beneficial owner in this case)?
The Company/Regulated Intermediary (i.e. the withholding agents) will have to report to SARS on the details of the dividend declared to the

Which dividend distributions are automatically exempt from Dividends Tax?
Some dividend payments are automatically exempt, i.e. do not require the beneficial owner to submit a declaration and undertaking form in order to qualify,

How will the SARS identify Dividends Tax payments?
Dividends Tax transactions will be distinguishable from assessed Income Tax and provisional tax by the tax form type and Payment

What is the definition of “Date paid / payable” referred to in the BRS?
As per section 64E of the Act this refers to the earlier of the dividend being paid or becoming due payable by the company declaring the dividend.

Will penalties be levied on late payment and submission to SARS?
Yes, penalties will be levied for late payments of Dividends Tax or the late submission of Dividends Tax returns.

Will Dividends Tax withheld be set off as a credit against my Income Tax liability, or may I claim a refund of the Dividends Tax withheld if I am not liable for Income Tax (for example I earn income below the tax threshold)?
No, Dividends Tax is a separate and final tax. It may not be used as a credit against your income tax liability. For the same reason a refund of the

How can a Dividends Tax payment be made?
By legislation every company/regulated intermediary is required to withhold Dividends Tax on any dividend declared after 1 April 2012. There will be no more fixed cycle dates and it is the

Can a Dividends Tax payment still be made without submitting a DTR02 return?
Yes, a payment can still be made without submitting the Dividends Tax return, however, a payment reference number must be requested via the following channels to accompany the payment: . eFiling; . SARS branch.