Tax
Residence-based income tax, 15% VAT, and a strong general anti-avoidance rule
South Africa has taxed residents on worldwide income since 2001, with non-residents taxed on South African source income. SARS administers a self-assessment system under the Tax Administration Act 28 of 2011. VAT is levied at 15%, and capital gains are brought into income through the Eighth Schedule rather than taxed as a separate levy.
Key rules
- Jurisdiction — SARS assesses and collects; objections are decided internally, then appealed to the Tax Board or the Tax Court, with further appeal to the High Court and above.
- Deadline — Individual income tax return: filed in the annual season set by SARS, generally from July to October for non-provisional taxpayers
- Deadline — Provisional tax: two payments, at the end of August and February, with an optional third top-up
- Deadline — Objection to an assessment: within 30 business days of the assessment or of reasons being furnished
- Deadline — VAT returns: bi-monthly for most vendors, monthly above the prescribed turnover threshold
Governing law
- Income Tax Act 58 of 1962 — including the Eighth Schedule on capital gains and ss 80A-80L on impermissible avoidance
- Value-Added Tax Act 89 of 1991 — standard rate 15%
- Tax Administration Act 28 of 2011 — assessment, objection, appeal and understatement penalties
- Customs and Excise Act 91 of 1964
In practice
The shift to residence-based taxation makes tax residence, not nationality, the operative question, and the ordinarily-resident and physical-presence tests both matter for individuals leaving or entering the country. The general anti-avoidance rule in ss 80A-80L is deliberately broad, requiring an arrangement to lack commercial substance or to create rights and obligations not at arm's length, and the understatement penalty table in the Tax Administration Act ties the penalty percentage to the taxpayer's behaviour — from a reasonable interpretation of the law up to intentional tax evasion.