South Africa uses a residence-based taxation system whereby residents are taxed on worldwide income and non-residents are taxed on South African-sourced income. With 22.2 million of its 58 million-strong population paying taxes, most of the state’s income comes from personal and corporate tax.
Who should pay tax in South Africa?
People who pay income tax are generally individuals who earn an income (from a salary, commission, fees, etc.). Corporate tax includes tax paid by companies or close corporations, as well as trusts, on their annual income.
Does everyone pay tax in South Africa?
South Africa operates on a residency-based taxation system, meaning that residents are taxed on worldwide income and non-residents are taxed on South African-sourced income.
How people are taxed in South Africa?
Since January 2001, the tax system was changed to “residence-based” wherein taxpayers residing in South Africa are taxed on their income irrespective of its source. Non residents are only subject to domestic taxes. Central government revenues come primarily from income tax, value added tax (VAT) and corporation tax.
What income is exempt from tax in South Africa?
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 income tax.
Why should I pay tax in South Africa?
Without the revenue from tax, the government can’t do its job. The state needs your tax paid in rands to fund social and economic programmes, and to provide public goods and services, such as schools, universities, hospitals, clinics and roads, as well as defence and security.
How much do you need to earn to pay tax in South Africa 2020?
For the 2020/21 tax year, if you are younger than 65 years of age and your annual taxable income (gross income minus deductions) is below the threshold of R83 100, you do not pay tax. If you are 65 or older, the tax threshold is R128 650, and if you are 75 or older, the threshold is R143 850.
How can I pay less tax in South Africa?
10 Tips to Pay Less Tax
- Contribute towards a retirement fund. …
- Open up a Tax Free Savings Account. …
- Donate to a SARS registered charity. …
- Join a Medical Aid Scheme. …
- Keep a logbook if you receive a travel allowance. …
- Keep a logbook if you drive a company car. …
- Claim commission related expense if you are a commission earner.
How much tax do I pay on my salary South Africa?
Calculate your income tax for 2021 / 2022
|Taxable income (R)||Rates of tax (R)|
|1 – 216200||18% of taxable income|
|216201 – 337800||38916 + 26% of taxable income above 216200|
|337801 – 467500||70532 + 31% of taxable income above 337800|
|467501 – 613600||110739 + 36% of taxable income above 467500|
Do foreigners pay tax in South Africa?
South Africa has a residence-based tax system, which means residents are, subject to certain exclusions, taxed on their worldwide income, irrespective of where their income was earned. By contrast, non-residents are taxed on their income from a South African source.
What are the different types of tax in South Africa?
Types of Tax
- Air Passenger Tax.
- Capital Gains Tax.
- Corporate Income Tax.
- Diamond Export Levy.
- Dividends Tax.
- Donations Tax.
- Estate Duty.
- Excise Duties and Levies.
Do you pay tax when selling a house in South Africa?
You will only pay tax on a portion of the profit that you make from the sale. … The maximum that you could pay in taxes on your capital gains in South Africa is 10% of your capital gain. That is because the maximum tax rate is 40% and only 25% of capital gains is taxable.
What is the minimum taxable income in South Africa?
Who is it for? R87 300 if you are younger than 65 years. If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R135 150. For taxpayers aged 75 years and older, this threshold is R151 100.
What income is tax free?
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on. Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance.