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How are foreign dividends from an unlisted company treated?

Bob says:
29 March 2024 at 9:22

Are dividends from foreign shares (not listed on any exchange) bought privately from a foreign business tax exempt?  If not, how would the dividend paid be treated for tax purposes?

TaxTim TaxTim says:
2 April 2024 at 10:11

Assuming you hold less than 10% of the equity shares and voting rights in the foreign company, then the foreign dividend received will be taxed. You will need to declare these dividends on your tax return. The full amount of the dividend must be shown in the tax return, however SARS will allow a tax exemption which equates to 25/45 of the Rand value of the foreign dividend. SARS will calculate this exemption on your assessment for you. If you paid foreign tax on the dividend, this must also be declared in your tax return, and SARS will reduce the local tax by the foreign tax paid.

The taxable portion of the dividend will be then added to your other taxable income on which tax will be calculated as per the individual tax rates.

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