FAQ: 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 section 64F of the Act.
FAQ: 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. The declaration and undertaking should be in the format prescribed by the Commissioner, and should be made available to all shareholders (beneficial […]
FAQ: Are trade unions or stokvels exempt from Dividends Tax?
No, trade unions and stokvels are not exempt from Dividends Tax.
FAQ: 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) as they fall within the definition of a “benefit fund” as defined in section 1 of the Act, which in turn is listed in section 10(1)(d)(ii) of the Act.
FAQ: 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): South African resident companies Government (all three spheres) Public Benefit Organisations (approved in terms of section 30(3) of the Act) Mining rehabilitation trusts (section 37A of […]
FAQ: 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. A regulated intermediary includes, for example, central securities depository participants, brokers, nominee companies, and approved transfer secretaries.
FAQ: 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. Where an actual dividend has been declared and the dividend cycle ends on 31 March 2012, a return need only be submitted if STC […]
FAQ: 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 – the Dividends Tax liability of the beneficial owner may not be reduced by the STC credit portion, and the beneficial owner (if it is a company) will not be able to use the incoming STC credit when […]
FAQ: 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 the dividend is.
FAQ: 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, not the company paying it, is liable for the tax (South Africa was one of a few countries with a corporate level tax […]
