Company Tax | South Africa Tax Guide 2006

The rate of South African Normal Company Taxation applicable to Companies (other than small business corporations and personal service companies) with financial years ending after 1 April 2005 is 29%.

Companies are not entitled to any rebates except for foreign royalty and foreign taxes paid.

Companies are also liable for Secondary Tax on Companies (STC) AT 12.5%  in respect of all dividends declared after 13 March 1996.

Close Corporations:

Close Corporations are treated as Companies for taxation purposes.

Trusts:

With effect from 1 March 2002 all trusts other than those mentioned below will be taxed at a flat rate of 40%. Special trusts and testamentary trusts will be taxed at individual rates.

With effect from 1 March 2000, income vesting in the Trust as a taxpayer (but not the income vesting in any of the beneficiaries of the Trust) will be taxed at a rate of 32% on taxable income up to R100 000 and at a rate of 42% on the amount taxable income in excess of R100 000, with the exception of a trust created solely for a person who suffers from "mental illness" as defined in section 1 of the Mental Health Act, 1973; or a serious physical disability, where such illness or disability incapacitates the beneficiary from earning sufficient income to maintain himself / herself.