Tax in South Africa

Who is the tax authority in South Africa?

The South African Revenue Service (SARS) is the principal tax authority, established by the South African Revenue Service Act 1997 as an organ of state separate from the National Treasury. SARS administers the Income Tax Act 1962, the Value-Added Tax Act 1991, the Customs and Excise Act 1964, and allied statutes covering the Skills Development Levy, UIF contributions, the Health Promotion Levy, and Carbon Tax. The Tax Court and Tax Board handle disputes.

The South African Institute of Chartered Accountants (SAICA) regulates Chartered Accountants. The South African Institute of Tax Professionals (SAIT) regulates Tax-Practitioners under the Tax Administration Act 2011 — registration with a recognised controlling body is mandatory for any person who provides paid tax services or completes returns for a fee. The taxpayer-facing portal is sars.gov.za with eFiling for most returns.

What is the tax year and when are returns due?

South Africa's year of assessment for individuals runs 1 March to the last day of February — one of the few major economies with a non-calendar tax year. SARS opens the filing season in July each year; non-provisional filers using eFiling typically have until mid-October to mid-November, while provisional taxpayers file by end-January of the following calendar year.

Provisional tax is paid in two compulsory instalments — at end-August and end-February — with an optional third top-up by end-September following year-end. Companies file the ITR14 within 12 months of fiscal year-end and pay provisional tax on the same six-month-and-twelve-month cycle.

Who counts as a South African tax resident?

Under section 1 of the Income Tax Act 1962, an individual is South African tax resident if either of two tests is satisfied. The ordinarily-resident test is a common-law concept: a person is ordinarily resident where they would naturally and as a matter of course return after wandering (Cohen v CIR 1946, Kuttel v CIR 1992). It is a facts-and-circumstances inquiry with no bright-line day count.

The physical-presence test catches a non-ordinarily-resident person who is physically present in South Africa for more than 91 days in the current year of assessment, more than 91 days in each of the five preceding years, and more than 915 days in aggregate across those five preceding years. A continuous absence of at least 330 full days breaks the test — the person ceases to be a resident from the start of that absence.

Residents are taxed on worldwide income; non-residents are taxed only on South African-source and deemed-source income. The section 10(1)(o)(ii) foreign-employment exemption shelters the first ZAR 1.25 million of foreign employment income for residents who spend more than 183 days outside South Africa in any 12-month period including more than 60 continuous days. Emigration triggers a deemed disposal under section 9H — exit tax — on most assets at fair market value.

What are the personal income tax rates?

South Africa uses seven progressive income tax brackets for the 2025 year of assessment (1 March 2024 to 28 February 2025):

The primary rebate (a credit against tax, not a deduction) is ZAR 17,235 for filers under 65, with an additional secondary rebate of ZAR 9,444 from age 65 and a tertiary rebate of ZAR 3,145 from age 75. Medical-scheme tax credits are ZAR 364 per month for the main member and first dependant, and ZAR 246 per month for each additional dependant. Retirement annuity contributions are deductible up to 27.5 percent of remuneration, capped at ZAR 350,000 per year.

How does corporate tax work?

South Africa's corporate income tax rate is 27 percent for years of assessment ending on or after 31 March 2023, reduced from the historical 28 percent. Small Business Corporations under section 12E with turnover up to ZAR 20 million qualify for a graduated rate structure.

Special Economic Zones (SEZs) approved by the DTI offer a reduced 15 percent CIT rate for qualifying companies located in an SEZ. The Section 12J venture-capital incentive ended on 30 June 2021 and is no longer available for new investments. South Africa joined the OECD Inclusive Framework and tabled the Global Minimum Tax Bill in 2024, targeting fiscal years beginning on or after 1 January 2024 — Pillar Two implementation status should be confirmed with a registered Tax-Practitioner for any multinational group above the EUR 750 million threshold.

What about VAT and indirect taxes?

Value-Added Tax (VAT) is South Africa's principal indirect tax at a standard rate of 15 percent, in effect since 1 April 2018. The 2025 Budget proposed raising the standard rate to 15.5 percent from 1 May 2025 — consult current SARS guidance for the rate in force at the time of any supply.

Mandatory VAT registration is triggered once taxable supplies exceed ZAR 1 million in any 12-month period; voluntary registration is available from ZAR 50,000. Cross-border digital services supplied to South African consumers by non-resident vendors above ZAR 1 million per year have been in scope since 2014, substantially expanded in 2019 and again in 2024. Customs Duty, Excise Duty (on alcohol, tobacco, and fuel), and Carbon Tax operate alongside VAT under the Customs and Excise Act 1964.

How are cryptoassets taxed?

SARS treats cryptoassets as financial assets for tax purposes. The decisive characterisation issue is whether gains and losses are revenue (taxable as ordinary income at progressive PIT rates) or capital (taxable under CGT with the 40 percent individual inclusion rate) — SARS applies a facts-and-circumstances test focusing on intention at acquisition, trading frequency, and level of organisation.

Dividends Tax is a 20 percent withholding levied at company level on dividends paid to South African resident individuals and to non-resident shareholders, with treaty-reduced rates applying to many cross-border flows. Capital Gains Tax for individuals operates by including 40 percent of the net realised gain in taxable income, producing an effective top rate of 18 percent; the annual exclusion is ZAR 40,000 (ZAR 300,000 in the year of death).

What is the treaty network?

South Africa maintains approximately 80 comprehensive Double Taxation Agreements in force, plus Tax Information Exchange Agreements — Africa's largest bilateral treaty network. Most treaties follow the OECD Model with South African reservations on source-taxation of technical-services fees and on the credit-versus-exemption method (South Africa generally applies the credit method).

South Africa signed and ratified the OECD Multilateral Instrument; the MLI's modifications, including the Principal Purpose Test, apply to many covered DTAs for periods from 2022 onward. Foreign tax-credit relief is generally claimed under section 6quat of the Income Tax Act 1962. The Controlled Foreign Company regime under section 9D operates as an anti-deferral mechanism alongside the treaty network.

Where does South Africa sit in the regional cohort?

South Africa anchors the Sub-Saharan Africa major economy cohort — full income-tax system, deep treaty network, G20 and BRICS membership. The broader Sub-Saharan Africa region splits into five distinct tax archetypes:

Common pitfalls for foreign nationals and investors

Foreign investors and new arrivals trip on a handful of recurring traps when dealing with South African tax:

When should you talk to a South African Tax-Practitioner?

Some situations are straightforward via SARS eFiling. Others move quickly into territory where a registered Tax-Practitioner makes a material difference:

• Your income spans multiple brackets and you have retirement annuity, medical, or travel deductions to optimise within the allowable legal framework
• You receive rental income, freelance income, or investment returns above ZAR 30,000 — provisional-taxpayer obligations apply
• You are moving to or from South Africa and need to determine the exact date of residency cessation and the scope of the section 9H deemed disposal
• You earn foreign employment income and want to confirm the section 10(1)(o)(ii) 183-day-plus-60-continuous-day conditions are met
• You own or manage a company approaching the ZAR 20 million SBC turnover threshold
• You received a SARS audit, verification, or understatement-penalty notice
• You are part of a multinational group above the Pillar Two threshold

You can find vetted South African Tax-Practitioners through the directory below.

This page is general information. It is not personal guidance for your specific situation. Tax rules change. Always check current figures on the SARS website (sars.gov.za) or with a registered South African Tax-Practitioner before filing.