This SARS pocket tax guide has been developed to provide

a synopsis of the most important tax, duty and levy related

information for 2015/16.
INCOME TAX: INDIVIDUALS AND TRUSTS
Tax rates (year of assessment ending 29 February 2016)

Individuals and special trusts

Provisional Tax

Retirement fund lump sum benefits or severance benefits

A provisional taxpayer is any person who earns income other than

remuneration or an allowance or advance payable by the persons principal.
An individual is exempt from the payment of provisional tax if the individual
does not carry on any business and the individuals taxable income
will not exceed the tax threshold for the tax year; or
from interest, foreign dividends and rental will be R30 000 or less for the tax
year.
Provisional tax returns showing estimation of total taxable income for the year
of assessment are required from provisional taxpayers.

Taxable Income (R)

Rate of Tax (R)

0 181 900

18% of taxable income

181 901 284 100

32 742 + 26% of taxable income above 181 900

284 101 393 200

59 314 + 31% of taxable income above 284 100

393 201 550 100

93 135 + 36% of taxable income above 393 200

Taxable Income (R)

Rate of Tax (R)

550 101 701 300

149 619 + 39% of taxable income above 550 100

0 25 000

0% of taxable income

701 301 and above

208 587 + 41% of taxable income above 701 300

25 001 - 660 000

18% of taxable income above 25 000

660 001 - 990 000

114 300 + 27% of taxable income above 660 000

990 001 and above

203 400 + 36% of taxable income above 990 000

Trusts other than special trusts: Rate of tax 41%

Tax Rebates and Tax Thresholds
Rebates
Primary

R13 257

Secondary (Persons 65 and older)

R 7 407

Tertiary (Persons 75 and older)

R 2 466

Age

Tax Threshold

Below age 65

R73 650

Age 65 to below 75

R114 800

Age 75 and over

R128 500

Retirement fund lump sum withdrawal benefit

Retirement fund lump sum withdrawal benefits consist of lump sums

from a pension, pension preservation, provident, provident preservation or
retirement annuity fund on withdrawal (including assignment in terms of a
divorce order).
Tax on a specific retirement fund lump sum withdrawal benefit
( lump sum X ) is equal to
the tax determined by the application of the tax table to the aggregate of lump
sum X plus all other retirement fund lump sum withdrawal benefits accruing
from March 2009, all retirement fund lump sum benefits accruing from October
2007 and all severance benefits accruing from March 2011; less
the tax determined by the application of the tax table to the aggregate of all
retirement fund lump sum withdrawal benefits accruing before lump sum X from
March 2009, all retirement fund lump sum benefits accruing from October 2007
and all severance benefits accruing from March 2011.

Taxable Income (R) Rate of Tax (R)

0 500 000

0% of taxable income

500 001 - 700 000

18% of taxable income above 500 000

700 001 1 050 000

36 000 + 27% of taxable income above 700 000

1 050 001 and above

130 500 + 36% of taxable income above 1 050 000

Retirement fund lump sum benefits consist of lump sums from a pension,
pension preservation, provident, provident preservation or retirement
annuity fund on death, retirement or termination of employment due to
redundancy or termination of the employers trade.
Severance benefits consist of lump sums from or by arrangement with an
employer due to relinquishment, termination, loss, repudiation, cancellation
or variation of a persons office or employment.
Tax on a specific retirement fund lump sum benefit or a severance benefit
(lump sum or severance benefit Y) is equal to
the tax determined by the application of the tax table to the
aggregate of amount Y, plus all other retirement fund lump sum
benefits accruing from October 2007 and all retirement fund lump
sum withdrawal benefits accruing from March 2009 and all other
severance benefits accruing from March 2011; less
the tax determined by the application of the tax table to the aggregate
of all retirement fund lump sum benefits accruing before lump sum
Y from October 2007 and all retirement fund lump sum withdrawal
benefits accruing from March 2009 and all severance benefits
accruing before severance benefit Y from March 2011.

Foreign Dividends
Most foreign dividends received by individuals from foreign companies
(shareholding of less than 10% in the foreign company) are taxable at a
maximum effective rate of 15%. No deductions are allowed for expenditure
to produce foreign dividends.

Interest exemptions
Interest from a South African source earned by any natural person
under 65 years of age, up to R23 800 per annum, and persons 65 and
older, up to R34 500 per annum, is exempt from taxation;
Interest is exempt where earned by non-residents who are physically
absent from South Africa for at least 183 days during the 12 month
period before the interest accrues or is received and the debt from
which the interest arises is not effectively connected to a fixed place
of business of the non-resident in South Africa during that period of
12 months.

Deductions
Current pension fund contributions
The greater of 7,5% of remuneration from retirement funding employment,
or R1 750. Any excess may not be carried forward to the following year of
assessment.
Arrear pension fund contributions
Maximum of R1 800 per annum. Any excess over R1 800 may be carried
forward to the following year of assessment.
Current retirement annuity fund contributions
The greater of 15% of taxable income other than from retirement funding
employment, R3 500 less current deductions to a pension fund, or R1 750.
Any excess may be carried forward to the following year of assessment.
Arrear retirement annuity fund contributions
Maximum of R1 800 per annum. Any excess over R1 800 may be carried
forward to the following year of assessment.
Medical and disability expenses
In determining tax payable, individuals are allowed to deduct
monthly contributions to medical schemes (a tax rebate referred to as
a medical scheme fees tax credit) up to R270 for the individual who
paid the contributions and the first dependant on the medical scheme
and R181 for each additional dependant; and

in the case of
an individual who is 65 and older, or if that person, his or her
spouse or child is a person with a disability, 33.3% of qualifying
medical expenses paid and borne by the individual and an
amount by which medical scheme contributions paid by the
individual exceed 3 times the medical scheme fees tax credits for
the tax year;
any other individual, 25% of an amount equal to qualifying
medical expenses paid and borne by the individual and an
amount by which medical scheme contributions paid by the
individual exceed 4 times the medical scheme fees tax credits
for the tax year, limited to the amount which exceeds 7,5%
of taxable income (excluding retirement fund lump sums and
severance benefits).
Donations
Deductions in respect of donations to certain public benefit organisations are
limited to 10% of taxable income (excluding retirement fund lump sums and
severance benefits). The amount of donations exceeding 10% of the taxable
income is treated as a donation to qualifying public benefit organisations in
the following tax year.

Allowances
Subsistence allowances and advances
Where the recipient is obliged to spend at least one night away from his or
her usual place of residence on business and the accommodation to which
that allowance or advance relates is in the Republic of South Africa and the
allowance or advance is granted to pay for
meals and incidental costs, an amount of R353 per day is deemed to
have been expended;
incidental costs only, an amount of R109 for each day which falls
within the period is deemed to have been expended.
Where the accommodation to which that allowance or advance relates is
outside the Republic of South Africa, a specific amount per country is deemed

to have been expended. Details of these amounts are published on the SARS
website under Legal & Policy / Secondary Legislation / Income Tax Notices /
2015.

The actual distance travelled during a tax year and the distance travelled for
business purposes substantiated by a log book are used to determine the
costs which may be claimed against a travelling allowance.

Travelling allowance

Alternatively:
Where the distance travelled for business purposes does not exceed 8 000
kilometres per annum, no tax is payable on an allowance paid by an employer
to an employee up to the rate of 318 cents per kilometre, regardless of
the value of the vehicle. However, this alternative is not available if other
compensation in the form of an allowance or reimbursement (other than for
parking or toll fees) is received from the employer in respect of the vehicle.

Rates per kilometre, which may be used in determining the allowable

deduction for business travel against an allowance or advance where no
records of actual costs are kept, are determined by using the following table.
Value of the vehicle
(including VAT) (R)

Fixed cost (R
p.a.)

Fuel cost
(c/km)

Maintenance cost
(c/km)

0 - 80 000

26 105

78.7

29.3

80 001 - 160 000

46 505

87.9

36.7

160 001 - 240 000

66 976

95.5

40.4

240 001 - 320 000

84 945

102.7

44.1

320 001 - 400 000

102 974

109.9

51.8

400 001 - 480 000

121 886

126.1

60.8

480 001 - 560 000

140 797

130.4

75.6

exceeding 560 000

140 797

130.4

75.6

Note:
80% of the travelling allowance must be included in the employees
remuneration for the purposes of calculating PAYE. The percentage is reduced
to 20% if the employer is satisfied that at least 80% of the use of the motor
vehicle for the tax year will be for business purposes.
No fuel cost may be claimed if the employee has not borne the full cost of fuel
used in the vehicle and no maintenance cost may be claimed if the employee
has not borne the full cost of maintaining the vehicle (e.g. if the vehicle is
covered by a maintenance plan).
The fixed cost must be reduced on a pro-rata basis if the vehicle is used for
business purposes for less than a full year.

Other deductions
Other than the deductions set out above an individual may only claim
deductions against employment income or allowances in limited specified
situations, e.g. bad debt in respect of salary.

Fringe Benefits
Employer-owned vehicles
The taxable value is 3,5% of the determined value (the cash cost
including VAT) per month of each vehicle. Where the vehicle is
the subject of a maintenance plan when the employer acquired
the vehicle the taxable value is 3,25% of the determined value; or
acquired by the employer under an operating lease the taxable
value is the cost incurred by the employer under the operating
lease plus the cost of fuel.
80% of the fringe benefit must be included in the employees
remuneration for the purposes of calculating PAYE. The percentage is
reduced to 20% if the employer is satisfied that at least 80% of the
use of the motor vehicle for the tax year will be for business purposes;
On assessment the fringe benefit for the tax year is reduced by the
ratio of the distance travelled for business purposes substantiated by
a log book divided by the actual distance travelled during the tax year;

 On assessment further relief is available for the cost of licence,

insurance, maintenance and fuel for private travel, if the full cost
thereof has been borne by the employee and if the distance travelled
for private purposes is substantiated by a log book.

Taxable turnover (R) Rate of tax (R)

of R1.8 million when a small business with a market value not exceeding R10
million is disposed of;
instead of the annual exclusion, the exclusion granted to individuals is R300 000
for the year of death.

0 335 000

0% of taxable turnover

DIVIDENDS TAX

335 001 500 000

1% of taxable turnover above 335 000

Residential accommodation
The fringe benefit to be included in gross income is the lower of the benefit
calculated by applying a prescribed formula or the cost to the employer.

500 001 750 000

1 650 + 2% of taxable turnover above 500 000

750 001 and above

6 650 + 3% of taxable turnover above 750 000

The formula will apply if the accommodation is owned by the employer, by

an associated institution in relation to the employer, or under certain limited
circumstances where it is not owned by the employer.

RESIDENCE BASIS OF TAXATION

Interest-free or low-interest loans

The difference between interest charged at the official rate and the actual
amount of interest charged, is to be included in gross income.

INCOME TAX: COMPANIES

Financial years ending on any date between 1 April 2015 and 31 March 2016
Type

Rate of Tax (R)

Companies

28% of taxable income

INCOME TAX: SMALL BUSINESS CORPORATIONS

SARSPOCKETGUIDE 2015/6

Financial years ending on any date between 1 April 2015 and 31 March 2016
Taxable Income (R)

Rate of Tax (R)

0 73 650

0% of taxable income

73 651 365 000

7% of taxable income above 73 650

365 001 550 000

20 395 + 21% of taxable income above 365 000

550 001 and above

59 245 + 28% of the amount above 550 000

TURNOVER TAX FOR MICRO BUSINESSES

Financial years ending on any date between 1 April 2015 and 31 March 2016

Residents are taxed on their worldwide income, subject to certain exclusions.

The general principle is that foreign taxes on foreign sourced income are
allowed as a credit against South African tax payable. This is applicable to
individuals, companies, close corporations and trusts.
TAXATION OF CAPITAL GAINS
Capital gains on the disposal of assets are included in taxable income.
Maximum effective rate of tax:
Individuals and special trusts
13.65%
Companies 18.65%
Other trusts

27.31%
Events that trigger a disposal include a sale, donation, exchange, loss, death
and emigration. The following are some of the specific exclusions:
R2 million gain or loss on the disposal of a primary residence;
most personal use assets;
retirement benefits;
payments in respect of original long-term insurance policies;
annual exclusion of R30 000 capital gain or capital loss is granted to individuals
and special trusts;
small business exclusion of capital gains for individuals (at least 55 years of age)

Dividends tax is a final tax at a rate of 15% on dividends paid by resident

companies and by non-resident companies in respect of shares listed on
the JSE. Dividends are tax exempt if the beneficial owner of the dividend
is a South African company, retirement fund or other exempt person. Nonresident beneficial owners of dividends may benefit from reduced tax rates
in limited circumstances. The tax is to be withheld by companies paying the
taxable dividends or by regulated intermediaries in the case of dividends on
listed shares. The tax on dividends in kind (other than in cash) is payable and
is borne by the company that declares and pays the dividend.
OTHER WITHHOLDING TAXES
In limited circumstances the applicable tax rate may be reduced in terms of a
tax treaty with the country of residence of a non-resident.

Royalties
A final tax at a rate of 15% is imposed on the gross amount of royalties from
a South African source payable to non-residents.

Disposal of immovable property

A provisional tax is withheld on behalf of non-resident sellers of immovable
property in South Africa to be set off against the normal tax liability of the
non-residents. The tax to be withheld from payments to the non-residents
is at a rate of 5% for a non-resident individual, 7.5% for a non-resident
company and 10% for a non-resident trust that is selling the immovable
property.
OTHER TAXES DUTIES AND LEVIES

Value-added Tax (VAT)

VAT is levied at the standard rate of 14% on the supply of goods and services
by registered vendors.
A vendor making taxable supplies of more than R1 million per annum must
register for VAT. A vendor making taxable supplies of more than R50 000 but
not more than R1 million per annum may apply for voluntary registration.
Certain supplies are subject to a zero rate or are exempt from VAT.

Transfer Duty
Transfer duty is payable at the following rates on transactions which are not
subject to VAT.
Acquisition of property by all persons:

Interest
A final tax at a rate of 15% is imposed on interest from a South African
source payable to non-residents with effect from 1 March 2015. Interest is
exempt if payable by any sphere of the South African government, a bank or
if the debt is listed on a recognised exchange.

Foreign entertainers and sportspersons

A final tax at the rate of 15% is imposed on gross amounts payable to nonresidents for activities exercised by them in South Africa as entertainers or
sportspersons.

A basic deduction of R3.5 million is allowed in the determination of an

estates liability for estate duty as well as deductions for liabilities, bequests
to public benefit organisations and property accruing to surviving spouses.

Donations Tax
Donations tax is levied at a flat rate of 20% on the value of property
donated;
The first R100 000 of property donated in each year by a natural
person is exempt from donations tax;
In the case of a taxpayer who is not a natural person, the exempt
donations are limited to casual gifts not exceeding R10 000 per
annum in total;
Dispositions between spouses and South African group companies
and donations to certain public benefit organisations are exempt from
donations tax.

Securities Transfer Tax

The tax is imposed at a rate of 0.25 of a per cent on the transfer of listed
or unlisted securities. Securities consist of shares in companies or members
interests in close corporations.

Tax on International Air Travel

R190 per passenger departing on international flights excluding flights to
Botswana, Lesotho, Namibia and Swaziland, in which case the tax is R100.

Value of property (R)

Rate

Skills Development Levy

0 750 000

0%

750 001 1 250 000

3% of the value above R750 000

1 250 001 1 750 000

R15 000 + 6% of the value above R1 250 000

A skills development levy is payable by employers at a rate of 1% of the total

remuneration paid to employees. Employers paying annual remuneration
of less than R500 000 are exempt from the payment of Skills Development
Levies.

1 750 001 2 250 000

R45 000 + 8% of the value above R1 750 000

Unemployment Insurance Contributions

2 250 001 and above

R85 000 + 11% of the value above R2 250 000

Unemployment insurance contributions are payable monthly by employers

on the basis of a contribution of 1% by employers and 1% by employees
based on employees remuneration below a certain amount.

Estate Duty
Estate duty is levied at a flat rate of 20% on property of residents and South
African property of non-residents.

Employers not registered for PAYE or SDL purposes must pay the contributions
to the Unemployment Insurance Commissioner.

SARS INTEREST RATES

Rate of interest (from 1 August 2014)

Rate

Fringe benefits - interest-free or low-interest loan (official rate)

6.75% p.a.

Rates of interest (from 1 November 2014)

Rate

Late or underpayment of tax

9.25% p.a.

Refund of overpayment of provisional tax

5.25% p.a.

Refund of tax on successful appeal or where the appeal was 9.25% p.a.
conceded by SARS
Refund of VAT after prescribed period

9.25% p.a.

Late payment of VAT

9.25% p.a.

Customs and Excise

9.25% p.a.

BUDGET HIGHLIGHTS
The impact of personal income tax proposals is revenue neutral;
General fuel levy Increases by 30.5 cents per litre and Road Accident
Fund levy increases by 50 cents per litre on 1 April 2015;
Increase excise duties on alcoholic beverages by between 4.8 and 8.5
per cent and on tobacco products by between 5 and 7 per cent;
Change to a self assessment system for income tax;
Taking further steps to combat base erosion and profit shifting such as
improved transfer pricing documentation and reporting;
Providing for a more generous turnover tax system for small
businesses;
Delinking the diesel refund system from the VAT system and limiting
diesel refunds for land mining activities and the generation of
electricity;
Consider increasing the electricity levy by 2 cents per kWh as a
temporary measure until carbon tax is introduced.

BUDGET2015

TAX GUIDE