Blog Q&A Calculators Students Logbook Contact
Earn under R350,000?Click here to see why you still need to file to get your Tax Refund.
CLOSE
Need Help with your 2017 Tax Return?

Get your tax return DONE in 10 minutes or less with TaxTim!

Try TaxTim Now

Do I qualify to pay Dividends Tax?

Posted 30 March 2012 under TaxTim's Blog


Let TaxTim
help you
submit your
Tax returns!


TaxTim will help you:

 Do Your Tax Return Easily
 Avoid penalties
 Maximise your refund

Get started

Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →
Taxpayers will no doubt notice a number of emails and letters from banks / financial advisors asking them to submit a form related to dividends tax. What is this all about?

Before 22nd February 2017, the following applied:

A new Dividends Withholding Tax or DWT has been created which replaces the old Secondary Tax on Companies (STC) from 1 April 2012. A shocking fact is that the new version is now a whopping 15%, up from 10%. So for every R1 declared as a dividend, you as the taxpayer, will only receive 85c. The remaining 15c will be paid over to SARS.

The DWT will by default apply to all individuals with investments. It will also apply to foreign investors, though some may be able to reduce the tax based on a Double Tax Agreement (Look out for future blog posts on this topic). That confusing form you have received asks you to state why you should NOT be subject to the DWT, and lists a few exemptions. The most important being:

    1. South African company/close corporation

    1. Government body;

    1. Public benefit organisation;

    1. A special trust;

    1. Certain research, public service and public funding bodies; and

    1. Pension funds, retirement funds, retirement funds, benefit funds and preservation funds.

The sad truth is that since 22nd February SARS increased the dividend Withholding tax rate to 20%. That means that for every R1 declared as a dividend, SARS is going to hold back 20cents. 

If you ARE one of the above, you will need to complete the form and state which one is applicable to you. Otherwise the financial institution who sent you the form will assume you are liable for DWT.

If you are unsure about whether you qualify or not, ask Tim below.

This entry was posted in TaxTim's Blog and tagged , . Bookmark the permalink.


Get SARS Tax Deadlines in your Inbox
 

We'll tell you when you need to file, along with tax tips and updates.

Blog Categories


Let TaxTim
help you
submit your
Tax returns!


TaxTim will help you:

 Do Your Tax Return Easily
 Avoid penalties
 Maximise your refund

Get started

Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!