When dividends are paid to shareholders (beneficial owners), a withholding agent will typically deduct dividend taxes from their payments as part of the normal course of business (either the company paying the dividend or, where a regulated intermediary is involved, by the latter). The return of contributed tax capital is the exception to the definition of a dividend, which is essentially any payment made by a corporation to a shareholder in relation to a share held by that company (i.e. consideration received by a company for the issue of shares).
Who in South Africa claims dividends?
However, a withholding agency deducts dividend tax from the payment and sends it to SARS on behalf of the beneficial owner of the payout. However, the tax payer continues to be responsible.However, if the withholding agency doesn’t deduct the appropriate amount of tax, you’re still ultimately responsible for paying the tax. An exception to this general rule is where a dividend is the distribution of an asset in kind, making the company itself responsible for the tax (as in the case of STC), in which case the firm is not allowed to deduct the tax from the dividend payment.
When is it due to be paid?
Dividends Tax is applicable to all dividends declared and paid beginning on April 1, 2012, and the withholding agent (either the company or the regulated intermediary) must pay the tax withheld to SARS by the last day of the month following the month in which the dividend was paid. The DTR01 and DTR02 returns must be filed in conjunction with Dividends Tax payments. If dividend tax payments or returns are submitted after the deadline, penalties and interest may be assessed.
What distinguishes dividend tax from secondary tax on corporations?
Who is responsible for paying the tax is the primary distinction. Dividends Tax is a tax that is assessed on shareholders when they receive dividends, as opposed to STC, which was assessed against corporations upon the declaration of dividends.
How often are dividend payments made in South Africa?
They are one method by which a shareholder can profit from a purchase without having to sell any shares. Depending on how much stock a shareholder owns, dividends are paid.It is possible to pay monthly, quarterly, semi-annually, or annually.
Does South Africa have a dividend tax?
Although South African corporations normally do not have to withhold income tax from the dividends they pay to their shareholders, there is a 20% dividend tax that is deducted by the companies that pay the dividends to the shareholders.
