FAQ: 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 constitutes a dividend it would trigger a Dividends Tax liability and should be reflected in the return to SARS.
FAQ: 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 to be reflected in the return to SARS.
FAQ: 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. The claim must be made to the person who paid the dividend to you (i.e. the company if it paid the dividend to you directly, alternatively to the regulated intermediary […]
FAQ: 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 dividend payment.
FAQ: 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 or withholding agent.
FAQ: 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 agent to obtain the correct form.
FAQ: 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). The criteria for a reduced rate (with a few exceptions) normally require the foreign beneficial owner to firstly be a company and secondly hold a significant shareholding (at least 10% […]
FAQ: 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 between South Africa and the country of residence of the beneficial owner (normally Article 10) are met; and The required declaration […]
FAQ: 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.
FAQ: 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.
