Exchange Control Regulations
Foreign Capital Allowance
Individuals who are older than 18 years and who are in good standing with SARS can invest up to R10 million per year abroad. Income accruing thereon, may also be retained abroad. This dispensation has been granted by the South African Reserve Bank until further notice. Corporate entities, however, are obligated to bring back foreign earnings. Undisclosed offshore investments are deemed to have earned income equal to the fringe benefit interest rate. Foreign assets declared under the Exchange Control and Tax Amnesty Act 2003 are counted towards your individual foreign investment allowance, thus such amnesty declared foreign assets will reduce the overall amount you’re able to invest offshore via this dispensation.
In addition to the R10 000 000 annual foreign capital allowance, for persons over the age of 18 years, an annual travel allowance of R1 000 000 is available for any legal purpose (including investment purposes) abroad. This dispensation may be utilised solely at the discretion of the resident without any documentary evidence having to be produced to the authorised dealer except for travel purposes outside the Common Monetary Area (South Africa, Lesotho, Swaziland and Namibia) where a passenger ticket needs to be produced.
Medical / Dental Expenses Abroad
No limits apply if original, documented evidence of cost can be supplied.
Student Maintenance Allowances (full time students)
|Maintenance allowance||Vacation allowance|
|Single Student||R160 000 p.a.||R50 000 p.a.|
|Student accompanied by a spouse not studying||R320 000 p.a.||R100 000 p.a.|
Tuition and academic fees may be paid directly to the institution concerned against original documentary evidence, without any limit.
Family Maintenance Allowance (only fathers, mothers, brothers, sisters)
|Per receiving family unit in necessitous circumstances||R9 000 per month|
|Gifts and Loans||R30 000 p.a. per applicant|
(To non-residents or South African residents temporarily abroad solely for study purposes)
Philatelic and Numismatic Imports
No limit applicable, excluding South African gold coins minted in 1962 and thereafter.
Directors Fees (to non-residents including emigrants)
No limit applicable.
Guarantees (by non-residents in respect of financial assistance to South African Residents)
No limits applicable.
Emigrants qualify for the Foreign Capital Allowance as discussed above:
- Up to R10 000 000 per adult per calendar year
- Up to R20 000 000 per family unit per calendar year
Emigrants qualify for the annual Travel Allowance as discussed above:
- Up to R1 000 000 per adult
- Up to R200 000 per child under the age of 18
Assets in excess of the settling-in allowance remain blocked and fall under control of an authorised dealer to be released for payment of authorised gifts or expenses, including donations to South African residents, within an overall limit of R100 000 per annum. Applications to export blocked assets is subject to a 10% exit charge. Initial tranches of R5 million have been allowed.
Local Visits by Emigrants:
R75 000 p.a. per family unit blocked funds, at a rate of R3 000 per day for adults and R 1 500 per day per child under 12. Direct and return flights may be paid locally from blocked funds.
The income earned by an emigrant in his blocked assets is freely remittable abroad, after providing for income tax where applicable.
Restrictions on Local Financial Assistance
Foreign companies or foreign owned South African companies may borrow locally up to 300 per cent of the total shareholders’ investment.
Foreign Investment in South Africa
Non-residents enjoy unrestricted rights to invest in gilts and shares listed in the Stock Exchange and export the proceeds on the sale thereof. Interest and dividends are also freely remittable. Loans by non-residents to South African individuals or entities require prior exchange control approval.
Granting of trade credit to non-residents is permissible for periods up to six months.
Corporate Tax Rate:
Capital Gains Tax:
40% for individuals.
80% for companies.
80% for trusts.
Personal Income Tax:
Taxable Income Rates of Tax
R0 – R189 880 18% of each R1
R189 880 – R296 540 R34 178 + 26% of the amount over R189 880
R296 541 – R410 460 R61 910 + 26% of the amount over R296 540
R410 461 – R555 600 R97 225 + 31% of the amount over R410 460
R555 601 – R708 310 R149 475 + 36% of the amount over R555 600
R708 311 – R1 500 00 R209 032 + 39% of the amount over R708 310
R1 500 001+ R533 6251 + 45% of the amount over R1 500 000
Taxable Income Rates of Tax
R0 – R195 850 18% of each R1
R195 851 – R305 850 R35 253 + 26% of the amount over R195 850
R305 851 – R423 300 R63 853 + 26% of the amount over R305 850
R423 301 – R555 300 R100 263 + 31% of the amount over R423 300
R555 601 – R708 310 R147 891 + 36% of the amount over R555 600
R708 311 – R1 500 00 R207 448 + 39% of the amount over R708 310
R1 500 001+ R532 041 + 45% of the amount over R1 500 000
Persons under 65: R13 635 (2018) & R14 067 (2019)
Persons between 65 and 75: R21 114 (2018) & R21 780 (2019)
Persons 75 and over: R23 607 (2018) & R24 354 (2019)
Increases between 6.7% and 8.5% in sin taxes on alcohol and tobacco products. A sugar tax will be introduced on 1 April 2017
- All interest received by or accrued to non-residents is exempt from tax, provided the individual is physically absent from South Africa for at least 183 days, did not carry on business in South Africa and is not deemed to be ordinarily resident in South Africa during the year of assessment.
- There are annual exemptions for interest received which are adjusted on an annual basis.
Transfer duty is payable by the purchaser on the purchase value of immovable property situated in South Africa. The indirect acquisition of residential property by way of the acquisition of shares, member’s interest in a close corporation or a contingent right in a discretionary trust is also subject to transfer duty. No transfer duty is payable where the transfer of the fixed property is subject to VAT. Transfer duty rates are applicable from 1 March 2017.
|Value of Property||Rate|
|First R900 000||0%|
|R900 001 to R1 250 000||3% of value above R900 000|
|R1 250 001 to R1 750 000||R10 500 plus 6% of value above R1 250 000|
|R1 750 001 to R2 250 000||R40 500 plus 8% of value above R1 750 000|
|R2 250 001 to R10 000 000||R80 500 plus 11% of value above R2 250 000|
|R10 000 000 +||R933 000 plus 13% of value above R10 000 000|
Donations tax is a tax levied at a rate of 20% on the value of any property (not limited to physical property such as houses/land) which is disposed of through a donation by a South African resident or domestic company. There are certain donations that are exempt from donations tax, however – some of which include the following:
- Donations by natural persons up to R100 000 per annum after 1 March 2006 (previously R30 000)
- Donations by companies not considered to be public companies up to R10 000 per annum after 1 March 2002 (previously R5 000)
- Donations between non-separated spouses
- Bona fide maintenance payments
- Donations to Public Benefit Organisations
- Donations where the donee will not benefit until the death of the donor
- Donations made by companies which are recognised as public companies for tax purposes
- Donations cancelled within six months of the effective date
- Property disposed of under and in pursuance of any trust
- Donations of property or a right in property situated outside RSA – only if acquired by the donor before becoming a resident in RSA for the first time, or by inheritance or donation from a non-resident
- With effect from 01 October 2001, donations between companies forming part of the same group of companies.
It is important to note the following:
- Donations tax is payable within three months of the donation taking effect.
- The donor is initially liable for the tax, but should the donor fail to pay the tax within the three month period, the donor and donee are jointly and severally liable for the tax.
Estate Duty is an amount that is charged, levied and collected from the estate of every person who passes away on or after 1 April 1955.
Rates of Estate Duty:
- Persons deceased prior to 01 October 2001 – 25%
- Persons deceased on or after 01 October 2001 – 20%
Exemptions from Estate Duty include:
- For persons deceased prior to 01 March 2006, the first R1 500 000
- For persons deceased on or after 01 March 2006, the first R3 500 000
- Any bequest to a surviving spouse or a public benefit organisation
It is important to note the following:
As an example regarding the exemptions above, if the total net value of an estate for a person deceased after 1 March 2006 is R4 million, Estate Duty will be dutiable on 20% of the amount exceeding R3.5 million – an amount of R100,000 (20% of R500,000).
In general, Estate Duty is paid by the executor of the estate, but where a policy was paid to a beneficiary directly, the beneficiary is liable for the proportionate share of the Estate Duty payable.
The duty assessed must be paid within 1 year of date of death or on the date prescribed in the notice of assessment. The current interest rate for overdue payments is 6% p.a.