Calculate your dividends tax on local and foreign dividends. Standard rate is 20%, with reduced rates available under Double Taxation Agreements (DTAs).
South Africa's Dividends Tax replaced the old Secondary Tax on Companies (STC) in April 2012. Unlike STC, which was levied on the company, Dividends Tax is a withholding tax levied on the shareholder (beneficial owner) at a standard rate of 20%. The company or regulated intermediary withholds the tax before paying the dividend.
The tax applies to dividends paid by South African resident companies to their shareholders. For individuals, the 20% withholding is the final tax — dividends are not included in taxable income for income tax purposes. This makes the effective combined tax rate on corporate profits distributed as dividends approximately 42.4% (27% corporate tax + 20% dividends tax on the remaining 73%).
Foreign dividends received by South African tax residents are included in their taxable income but benefit from a Section 10B(3) exemption: the first R25,000 of foreign dividends per year is exempt for individuals. Beyond that, foreign dividends are taxed at the individual's marginal rate, but with a credit for any withholding tax paid in the source country. Alternatively, if the foreign dividend is from a listed company and the individual holds less than 10% of the shares, they may elect to be taxed at the flat 20% rate.
Double Taxation Agreements (DTAs) can reduce the withholding rate for non-residents receiving dividends from SA companies. South Africa has DTAs with over 80 countries. Treaty rates typically range from 5% (Mauritius, Cyprus, UAE) to 15% (UK, USA, Netherlands). To benefit from a reduced treaty rate, the non-resident must submit a declaration to the company or intermediary before the dividend is paid.
Certain dividends are completely exempt from the tax: dividends between South African companies (to avoid double taxation), dividends received by SA retirement funds, dividends from tax-free savings accounts, and dividends paid to approved public benefit organizations. REITs and property funds have special rules — their distributions are generally treated as income rather than dividends and taxed at the recipient's marginal rate.
The standard rate is 20%, withheld at source by the company paying the dividend. This is a final tax for individuals — dividends are not included in your income tax return.
No. Dividends between South African companies are exempt from dividends tax. The recipient company must submit a declaration (Section 64G) to the paying company to claim the exemption.
Foreign dividends up to R25,000/year are exempt for individuals. Beyond that, they're included in taxable income at your marginal rate, with a credit for foreign withholding tax paid. You can also elect the 20% flat rate for listed company dividends if you hold less than 10%.