South African Income Tax Rates from 1981 to 2017

Individuals

Putting this table together involved delving into a history of multiple rebates, capped variable rebates with deemed minimums, multiple tax tables, discrimination on the basis of race, and discrimination on the basis of marital status. Discrimination on the basis of race was repealed with effect from 1984/5 but discrimination on the basis of marital status lived on for just over another decade. It reached the stage that separate tax tables were used depending on whether you were a "married person", "person not a married person" or a "married woman". Wives were expected to include their taxable income in their husbands' tax returns. Unless a polygamous marriage was involved, in which case only the longest married wife's income was included. A widow or widower was still a married person but a divorced person was, usually, not. As the 1984-5 Supplement to Silke on South African Income Tax put it; "One could say, in fact that a married woman is 'married' but not a 'married person' unless she is divorced (but the true position is even more complicated)!"

Discrimination on the basis of marital status conflicted with the Bill of Rights of the Interim Constitution and was repealed as soon as practical after its promulgation. This change was eased by the work that already had been put into the separation of husband and wife for income tax purposes from 1990 onward. Individuals are now taxed on their own income using a single tax table. Rules exist to allocate income in spousal relationships in community of property. Marriages, customary marriages, religious marriages, and permanent same-sex or heterosexual unions give rise to a spousal relationship between the participants for tax purposes. The last two categories of spousal relationship are considered to be out of community of property unless proven otherwise.

In order to keep the comparisons manageable, the tax tables and rebates applicable to a single person with no dependants have been used for years before 1995/6.

Notes

1. Single persons' rates were calculated by using the married persons' tax table for income up to R28 000, deducting the applicable rebates, and adding a 20% surcharge. Taxable income over R28 000 was taxed at a flat 50%.
2. The married persons' first threshold was R2 500, second threshold R4 000, the minimum rate of 8% applied up to a taxable income of R6 000, the maximum marginal rate of 50% was reached at a taxable income of R40 000, and there were 24 tax brackets.
3. The second threshold applied to those 60 years of age and older.
4. The third threshold applied to those 70 years of age and older.
5. The third threshold applied to those 65 years of age and older.
6. The surcharge was levied on so much of the net amount of tax, after deduction of all rebates, as exceeded R750.
7. The discount was based on the net amount of tax after deduction of all rebates.
8. The qualifying age for the second threshold was increased to 61 years of age in 1990/1 and increased by one year in each year thereafter until it reached 65.
9. Dividends exempted from income tax. See repeal of UPT for companies below.
10. A transitional levy was levied on taxable income over R50 000, subject to certain exemptions.
11. The second threshold applied to those 65 years of age and older.
12. Single tax table for all individuals.
13. The third threshold applied to those 75 years of age and older.
14. The tax rate for all tax brackets, except the lowest, was increased by 1%.

Individuals - Medical Tax Credit

The medical scheme tax credit took effect for taxpayers from 2012/13 for taxpayers younger than 65 and from 2014/15 for taxpayers 65 and older.

Individuals - Interest and Dividends Exemption

Dividends received from domestic companies were generally exempt from income tax. A notable exception was a dividend from a "fixed property company", since such a company may deduct a dividend declared as an expense for tax purposes. Dividends received from foreign companies were generally taxable. A notable exception was a dividend from a Johannesburg Stock Exchange listed company.

A participation exemption for dividends from a holding of more than 25% in the equity share capital of a foreign company came into effect for years of assessment commencing on or after 1 June 2004. This would be the 2005/6 year for individuals. The participation exemption was extended to a holding of at least 20% of the total equity share capital with voting rights of at least 20% for dividends received or accrued on or after 8 November 2005. It was extended to a holding of at least 10% from 1 March 2012.

From 1 April 2012 dividends received by individuals from domestic companies were subject to a final withholding tax of 15% but were exempt from normal tax. Only 37.5% (36.6% from 1 March 2015) of the dividends received from foreign companies were included in individuals' taxable income, so the maximum effective rate on these dividends was 15%.

Tax free savings accounts (subject to annual and lifetime contribution limits) were introduced in 2015/16. As a result the interest exemptions above will no longer be increased.

Individuals - "Blacks"

"Blacks" were taxed in terms of the Taxation of Blacks Act, 1969, until 1983/4. The income of spouses was not added together, there was a single tax table, and there were no rebates.

Capital Gains Tax - Inclusion

Capital gains tax was introduced with effect from 1 October 2001 and applies to the disposal of an asset on or after that date. Only a percentage of a person's net capital gains for a year is included in taxable income and taxed at normal rates.

Corporate - Normal Tax & Surcharges

Notes

1. A minimum tax on companies was levied and could be offset against subsequent provisional tax or normal tax. If not utilised it was was refundable on liquidation or 1 October 1991, whichever came first. MTC = 25% x (Dividends distributed during the year - SA normal tax for the year - foreign taxes on income, profits or gains from foreign sources - dividends derived during the year from all sources). There were a number of exemptions, including one for companies which had distributed dividends of less than R250 000.
2. A transitional levy of 5% was levied on taxable income over R50 000, before taking any assessed loss from the prior year into account.
3. A small business scale with a reduced rate of 15% for taxable incomes of up to R100 000 was in force. Turnover and shareholding conditions apply. A personal service company, as defined, was taxed at 35%.
4. A small business scale with a reduced rate of 15% for taxable income of up to R150 000 was in force. Turnover and shareholding conditions applied. A personal service company, as defined, was taxed at 35%.
5. A small business scale with reduced rates of 0% for taxable income up to R35 000 and 10% up to R250 000 was in force. Turnover and shareholding conditions applied. A personal service company, as defined, was taxed at 34%.
6. A small business scale with reduced rates of 0% for taxable income up to individuals' <65 threshold and 10% up to R300 000 was in force. Turnover and shareholding conditions applied. A personal service company, as defined, was taxed at 34%.
7. A small business scale with reduced rates of 0% for taxable income up to individuals' <65 threshold and 10% up to R300 000 was in force. Turnover and shareholding conditions applied. A personal service company, as defined, was taxed at 33%.
8. A micro business turnover tax with rates ranging from 0% for turnover up to R100 000 to 7% for turnover exceeding R750 000 was in force. Turnover and shareholding conditions applied.
9. A small business scale with reduced rates of 0% for taxable income up to individuals' <65 threshold and 7% up to R350 000 was in force. Turnover and shareholding conditions applied. The concept of a personal service company fell away with the repeal of the secondary tax on companies and the introduction of the final withholding tax on dividends in its place.
10. A micro business turnover tax with rates ranging from 0% for turnover up to R150 000 to 6% for turnover exceeding R750 000 was in force. Turnover and shareholding conditions applied.
11. A small business scale with reduced rates of 0% for taxable income up to individuals' <65 threshold, 7% up to R365 000 and 21% up to R550 000 was in force. Turnover and shareholding conditions applied.
12. A micro business turnover tax with rates ranging from 0% for turnover up to R335 000 to 3% for turnover exceeding R750 000 was in force. Turnover and shareholding conditions applied.

Corporate - Undistributed Profits Tax

Corporate - Secondary Tax on Companies

The STC base was broadened on 1 October 2007 and the rate reduced to 10%. Following the signature and ratification of certain double taxation agreements, STC was replaced by a final withholding tax on dividends on 1 April 2012.