The dividends tax, a new form of tax on dividends paid by companies, comes into effect in South Africa soon. Here are some practical questions and answers about the new tax.
Tag: Dividend Tax
Dividend cessions
The antecedent divestment of a right to a dividend has been a feature of our tax law for longer than I have been in practice. See Hiddingh v CIR 1941 AD 111. The Government are obviously
Closure of dividend schemes
In a long awaited announcement it was indicated by the Minister of Finance that there are several dividend schemes that undermine the tax base. One method makes use of a scenario where the owner of shares cedes the rights to dividends to a third party in return for a payment. The benefit that a third party receives, is not only found in the exempt dividend, but also an STC credit. Another scheme involves the receipt of dividends from shares in which the taxpayer does not have any meaningful economic risk,
Share incentive schemes vs equity shares – round 2
In a previous article we drew attention to the proposed amendments to section 10(1)(k) of the Income Tax Act, 1962 (“the Act”), in terms of which the legislature sought to tax all dividends declared on any “restricted equity instrument” for purposes of section 8C of the Act.