The taxation of dividends in South Africa

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dc.contributor.advisor Prof. D.D. Vorster en_US
dc.contributor.author Lombard, Caren
dc.date.accessioned 2012-09-04T08:07:06Z
dc.date.available 2012-09-04T08:07:06Z
dc.date.issued 2012-09-04
dc.date.submitted 1996
dc.identifier.uri http://hdl.handle.net/10210/6872
dc.description M.Comm. en_US
dc.description.abstract As a developing country that has recently, since the abolition of apartheid, again become acceptable to foreigners for investment, consideration should be given to the attractiveness of this country to foreign capital. Corporate structures are the preferred business entities that foreigners invest in. Any potential investment is evaluated with regard to the return that can be obtained. The distribution of corporate profits by way of a dividend is the usual manner by which investors obtain a cash return on their investment. The legislation regarding the taxation of corporate profits and dividends in a country is thus of great importance when foreign investors evaluate the potential of an investment. Currently in SA, all corporate profits are taxed at 35% and on all distributed profits - dividends - 12,5% Secondary Tax on Companies (STC) is levied. If all profits were to be distributed the effective tax rate is 42,2% which is higher than that of other countries competing for foreign investment (Katz, 1994:221). Furthermore STC is not internationally recognised as a tax on dividends or as an additional corporate tax. It is not embodied in double taxation treaties and in most cases no foreign tax credit is received by shareholders for STC paid. In short - the costs of international unfamiliarity with STC may outweigh the domestic advantages thereof. In an interview with Deloitte & Touche International Tax partner, Anne Bennet these problems that multi-national companies such as RTZ-CRA have with STC and the need for reform, was expressed. The concerns regarding STC were also stressed in the Interim Report of the Katz Commission(1994: 168-178, 213-234). It is clear that STC's shortfalls can seriously hamper SA's attractiveness to foreign investors. The alternative methods of taxing dividends, that are accepted and known internationally, should therefore be examined and the most acceptable alternative should be adopted. en_US
dc.language.iso en en_US
dc.subject Dividends - Taxation - South Africa en_US
dc.subject Taxation - South Africa en_US
dc.subject Income tax - South Africa en_US
dc.title The taxation of dividends in South Africa en_US
dc.type Mini-Dissertation en_US

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