Income tax in South Africa
Taxation Researcher | January 08, 2021
INDIVIDUAL TAXATION
Since March 2001, the Republic of South Africa has taxed residents on their worldwide income. Married couples are assessed and charged as separate individuals. If the property is considered part of the conjugal estate, income is divided between husband and wife in equal portions.
The tax year is from 01 March of the current year to 28 February of the succeeding year. The tax year 2020-2021 is from 01 March 2020 up to 28 February 2021. The tax year 2021-2022 is from 01 March 2021 up to 28 February 2022.
INCOME TAX
Income is aggregated from all sources and taxed at progressive rates. Taxable income is computed as gross income less deductions and allowances. The following tax rates apply for the tax year March 2012 - February 2013.
INCOME TAX 2021-2022 |
|
TAXABLE INCOME, ZAR (US$) | TAX RATE |
Up to 216,200 (US$15,443) | 18% |
216,200 – 337,800 (US$24,129) | 26% on band over US$15,443 |
337,800 – 467,500 (US$33,393) | 31% on band over US$24,129 |
467,500 – 613,600 (US$39,686) | 36% on band over US$33,393 |
613,600 – 782,200 (US$43,829) | 39% on band over US$39,686 |
782,200 – 1,656,600 (US$118,329) | 41% on band over US$43,829 |
Over 1,656,600 (US$118,329) | 45% on all income over US$118,329 |
Source: Global Property Guide |
INCOME TAX 2020-2021 |
|
TAXABLE INCOME, ZAR (US$) | TAX RATE |
Up to 205,900 (US$14,707) | 18% |
205,900 – 321,600 (US$22,971) | 26% on band over US$14,707 |
321,600 – 445,100 (US$31,793) | 31% on band over US$22,971 |
445,100 – 584,200 (US$41,729) | 36% on band over US$31,793 |
584,200 – 744,800 (US$53,200) | 39% on band over US$41,729 |
744,800 – 1,577,300 (US$112,664) | 41% on band over US$53,200 |
Over 1,577,000 (US$112,664) | 45% on all income over US$112,664 |
Source: Global Property Guide |
INCOME TAX 2019-2020 |
|
TAXABLE INCOME, ZAR (US$) | TAX RATE |
Up to 195,850 (US$13,989) | 18% |
195,850 – 305,850 (US$21,846) | 26% on band over US$13,989 |
305,850 – 423,300 (US$30,235) | 31% on band over US$21,846 |
423,300 – 555,600 (US$39,686) | 36% on band over US$30,235 |
555,600 – 708,310 (US$50,593) | 39% on band over US$39,686 |
708,310 – 1,500,000 (US$107,143) | 41% on band over US$50,593 |
Over 1,500,000 (US$107,143) | 45% on all income over US$107,143 |
Source: Global Property Guide |
INCOME TAX 2018-2019 |
|
TAXABLE INCOME, ZAR (US$) | TAX RATE |
Up to 195,850 (US$13,989) | 18% |
195,850 – 305,850 (US$21,846) | 26% on band over US$13,989 |
305,850 – 423,300 (US$30,235) | 31% on band over US$21,846 |
423,300 – 555,600 (US$39,686) | 36% on band over US$30,235 |
555,600 – 708,310 (US$50,593) | 39% on band over US$39,686 |
708,310 – 1,500,000 (US$107,143) | 41% on band over US$50,593 |
Over 1,500,000 (US$107,143) | 45% on all income over US$107,143 |
Source: Global Property Guide |
INCOME TAX 2016-2017 |
|
TAXABLE INCOME, ZAR (US$) | TAX RATE |
Up to 188,000 (US$13,429) | 18% |
188,000 - 293,600 (US$20,971) | 26% on band over US$13,429 |
293,600 - 406,400 (US$29,029) | 31% on band over US$20,971 |
406,400 - 550,100 (US$39,293) | 36% on band over US$29,029 |
550,100 - 701,300 (US$50,093) | 39% on band over US$39,293 |
Over 701,300 (US$50,093) | 41% on all income over US$50,093 |
Source: Global Property Guide |
INCOME TAX 2015-2016 |
|
TAXABLE INCOME, ZAR (US$) | TAX RATE |
Up to 181,900 (US$12,993) | 18% |
181,900 - 284,100 (US$20,293) | 26% on band over US$12,993 |
284,100 - 393,200 (US$28,086) | 31% on band over US$20,293 |
393,200 - 550,100 (US$39,293) | 36% on band over US$28,086 |
550,100 - 701,300 (US$50,093) | 39% on band over US$39,293 |
Over 701,300 (US$50,093) | 41% on all income over US$50,093 |
Source: Global Property Guide |
Residents are entitled to tax rebates and deductions.
The tax thresholds for 2020-2021 are as follows:
- ZAR83,100 (USD5,936) for persons under 65 years of age
- ZAR128,650 (USD9,189) for persons 65 years to under 75 years of age
- ZAR143,850 (USD10,275) for persons 75 years of age and over
The tax thresholds for 2019-2020 are as follows:
- ZAR79,000 (USD5,643) for persons under 65 years of age
- ZAR122,300 (USD8,736) for persons 65 years to under 75 years of age
- ZAR136,750 (USD9,768) for persons 75 years of age and over
RENTAL INCOME
Rental income is taxed at progressive rates. Interest payments, insurance premiums, agent´s commission, and maintenance costs are deducted from the rental income.
CAPITAL GAINS
Capital gains realized from selling real property are subject to income tax at progressive rates. To compute the gain, acquisition costs, transfer costs, and property improvement costs are deducted from the selling price. A further allowable annual deduction of is subtracted. The annual deduction is ZAR40,000 (US$2,857). The taxable gain is 40% of the resulting amount.
The disposal of property is assumed on death or emigration, and triggers the payment of capital gains tax (CGT).
PROPERTY TAXATION
Property Tax
Property tax is imposed by the local government at approximately 0.07% to 0.4% of the market value of the property, depending on its size and location.
CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by companies are subject to corporate income tax at a flat rate of 28%. Income-generating expenses are deductible when calculating taxable income.
CAPITAL GAINS
Capital gains are subject to corporate income tax at a flat rate of 28%. To compute the gain, acquisition costs, transfer costs, and property improvement costs are deducted from the selling price. The taxable gain is 66.6% of the resulting amount.