FAQ: How is the deduction recouped?
The deduction is recouped (under the general recoupment rules of section 8(4) of the Income Tax Act, 1962), if a taxpayer disposes of the venture capital company shares within a period of five years from the date of acquisition of the venture capital company shares.
FAQ: Are there any limits to the tax deductions that investors can claim?
Yes. From 21 July 2019, investments made by natural persons and trusts will be capped at R2.5 million and for companies, investments will be capped at R5 million. This cap is per tax year. Where any loan or credit is used to finance the acquisition of a venture capital share and remains owing at the […]
FAQ: Who qualifies to be an investor?
Any taxpayer (natural person / trust / company) who invests in an approved venture capital company in exchange for venture capital company shares.
FAQ: Are there any tax benefits to the Venture Capital Company incentive?
Yes. Investors can claim income tax deductions in respect of their investments in approved venture capital companies.
FAQ: Are there any additional requirements to be met by an approved Venture Capital Company?
Yes. The company must satisfy the following additional requirements after the expiry of 48 months commencing on the first date of the issue of venture capital share: A minimum of 80% of the expenditure incurred by the Venture Capital Company to acquire assets must be for qualifying shares, and each qualifying company (i.e. investee) must, immediately after […]
FAQ: What are the preliminary requirements to be met to become an approved Venture Capital Company?
A company must meet all the following preliminary requirements to qualify for an approved venture capital company status for each year of assessment: The company must be a resident; The sole object of the company must be the management of investments in qualifying companies (i.e. investees); The company’s tax affairs must be in order; The […]
FAQ: What happens after the VCC application form has been submitted?
SARS will assess the application form to determine if the company meets the requirements. If the application is successful, a venture capital company reference number will be allocated and an approval letter will be issued to the applicant. If the application is not successful, a rejection letter will be issued to the applicant stating the […]
FAQ: How is interest paid to a non-resident from a South African source taxed?
As from 1 March 2015 interest from a South African source paid to a non-resident will be taxed at a final withholding tax rate of 15%. See more information on Withholding Tax on Interest (WTI).
FAQ: When will a non-resident be required to submit a tax return?
Non-residents are taxed on income received or accrued from a South African source (such as annuities which accrue to a person as a result of services rendered in SA, rental income from property in SA or interest income from a local bank, etc.). If a non-resident receives income from a South African source, he or […]
FAQ: Am I required to submit an income tax return if I am a South African resident but I work overseas and I do not earn other income from a South African (SA) source except for exempt interest income from a South African source?
If you are a tax resident of South Africa, you are subject to tax on worldwide income, irrespective of where the income is earned. You may, however, qualify for certain tax exemptions (such as an exemption against interest received, or an exemption against foreign employment income). Should you be subject to tax in more than […]
