For small business corporations, your taxable net profit is your total tax revenue minus any special allowances and qualified deductions. This does not include capital gains.
Also, businesses must pay a capital gains tax rate of 21.6%. The Unemployment Insurance Fund (UIF) also involves indirect tax. This fund is a benefit for people who work for at least 24 hours per week but have become sick, unemployed, or taken maternity leave.
This benefit is funded by 2% of the employee's income in contributions, 1% from the company and 1% from the employee.
Turnover-based Tax for Micro Businesses
A turnover-based presumptive tax is offered to micro businesses to lower compliance costs. Businesses with annual revenues below R1 million can choose to pay this tax over the standard corporate income tax (CIT) at a rate that varies from 0% to 3%, based on the size of their business.
All resident and non-resident corporations that declare and pay dividends on shares listed on a South African market, like the Johannesburg Stock Exchange (JSE), have to pay a 20% dividends tax.
If a South African residence corporation, a retirement fund there, or another exempt person is the dividend's beneficial owner, the dividend will be exempt from tax.
If a "regulated intermediary" pays the dividend, the tax will be collected on behalf of the company paying the dividend. This generally applies to listed shares.
The beneficial owner of a dividend does not have to pay dividend tax if the declaring corporation does not pay the amount in cash.
Treaties only allow exemptions from dividend taxes and lower tax rates if the person who owns the dividend has given the paying business or a regulated intermediary the required declaration and undertaking.