Binding General Ruling (BGR) 9 (Issue 4) – Taxes on income and substantially similar taxes for purposes of South Africa’s tax treaties

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Binding General Ruling (BGR) 9 (Issue 4) – Taxes on income and substantially similar taxes for purposes of South Africa’s tax treaties

• 30 January 2020
• Tax Administration
• SARS

Important:

This article is based on tax law for the tax year ending 28 February 2020.

This ruling constitutes a BGR issued under section 89 of the Tax Administration Act 28 of 2011. This BGR applies from the date of issue until it is withdrawn or amended.

The following taxes as at publication date of this BGR are taxes on income and therefore qualify for treaty relief under South Africa’s tax treaties:

• Normal tax on taxable income, which includes a taxable capital gain (section 5)
• Tax on foreign entertainers and sportspersons, a final tax [section 47B(1)]
• Turnover tax on micro businesses (section 48A)
• Withholding tax on royalties, a final tax (section 49B(1))
• Withholding tax on interest, a final tax (section 50B(1))
• Dividends tax (section 64E(1)]4)

For purposes of the above list, the following are not taxes on income but represent advance payments of normal tax:

• Amounts withheld from payments to non-resident sellers of immovable property in South Africa (section 35A)
• Employees’ tax (Fourth Schedule to the Act)
• Provisional tax (Fourth Schedule to the Act)

South African taxes as at the date of publication of this BGR that are not taxes on income or similar taxes, and which do not qualify for treaty relief, include the following:

• Customs and excise duties
• Diamond export levy
• Donations tax
• Estate duty
• International oil pollution compensation fund contributions levy
• Royalty levied on the transfer of a mineral resource extracted from within South Africa
• Securities transfer tax
• Skills development levy
• Transfer duty
• Unemployment insurance contributions
• Value-added tax

The above list is not exhaustive.

This article first appeared on sars.gov.za.

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