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Section 64E (ITA) – Levy of tax

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64E.     Levy of tax

(1)

(a)     Subject to paragraph 3 of the Tenth Schedule, there must be levied for the benefit of the National Revenue Fund a tax, to be known as the dividends tax, calculated-

(i)      at the rate of 20 per cent; or

(ii)     at such rate as the Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act, with effect from a date mentioned in that Announcement,

of the amount of any dividend paid by any company other than a headquarter company.

(b)     If the Minister makes an announcement contemplated in paragraph (a)(ii), that rate comes into effect on the date determined by the Minister in that announcement and continues to apply for a period of 12 months from that date subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.

[Subsection (1) substituted by section 71 of Act 7 of 2010, section 6 of Act 13 of 2012, section 83 of Act 22 of 2012, section 11 of Act 14 of 2017 effective on 22 February 2017 and applies in respect of any dividend paid on or after that date and section 61 of Act 17 of 2017 effective on 18 December 2017]

(2)     For the purposes of this Part, a dividend must, to the extent that the dividend-

(a)     does not consist of a distribution of an asset in specie and is declared by a company that is-

(i)      a listed company, be deemed to be paid on the date on which the dividend is paid; or

(ii)     not a listed company, be deemed to be paid on the earlier of the date on which the dividend is paid or becomes due and payable; or

(b)     consists of a distribution of an asset in specie, be deemed to be paid on the earlier of the date on which the dividend is paid or becomes due and payable.

(3)     Where a company declares and pays a dividend and that dividend consists of a distribution of an asset in specie, the amount of the dividend must, for the purposes of subsection (1), be deemed-

(a)     in the case of an asset which is a financial instrument listed on a recognised exchange as defined in paragraph 1 of the Eighth Schedule and for which a price was quoted on that exchange, to be equal to the ruling price of that financial instrument on that recognised exchange at close of business on the last business day before the date that the dividend is, in terms of subsection (2), deemed to be paid; or

(b)     in the case of an asset which is not an asset contemplated in paragraph (a), to be equal to the market value of the asset on the date that the dividend is, in terms of subsection (2), deemed to be paid.

(4)

(a)     Where, during any year of assessment, any amount is owing to a company by-

(i)      a person that is-

(aa)    not a company;

(bb)   a resident; and

(cc)    a connected person in relation to that company; or

(ii)     a person that is-

(aa)    not a company;

(bb)   a resident; and

(cc)    a connected person in relation to a person contemplated in subparagraph (i),

in respect of a debt, that company must, for the purposes of this Part, be deemed to have paid a dividend to the person contemplated in subparagraph (i), if that debt arises by virtue of any share held directly or indirectly in that company by a person contemplated in subparagraph (i).

[Paragraph (a) amended by section 83(1)(d) and (e) of Act 22 of 2012 and by section 28 of Act 5 of 2026]

(b)     The amount of the dividend that is deemed to have been paid in terms of paragraph (a) must-

(i)      be deemed to consist of a distribution of an asset in specie; and

(ii)     for the purposes of subsection (1), be deemed to be equal to the greater of-

(aa)   the market-related interest in respect of that debt, less the amount of interest that is payable to that company in respect of that debt for that year of assessment; or

[Item (aa) substituted by section 83(1)(g) of Act 22 of 2012 (as amended by section 200(1) of Act 31 of 2013) effective on 1 January, 2013]

(bb)   nil.

[Paragraph (b) substituted by section 83(1)(f) of Act 22 of 2012 deemed effective on 1 April, 2012]

(c)     Where during any year of assessment a company is deemed to have paid a dividend in terms of paragraph (a), that dividend must be deemed to have been paid on the last day of that year of assessment.

(d)     For the purposes of this subsection, ‘market-related interest’, in relation to any debt owed to a company means the amount of interest that would be payable to that company on the amount owing to that company in respect of that debt for a period during a year of assessment if the debt had been owed for that period at the official rate of interest.

[Paragraph (d) substituted by section 83 of Act 22 of 2012 and section 61 of Act 17 of 2017 effective on 18 December 2017]

(e)     This subsection does not apply to the extent that the amount owing to a company in respect of a debtcontemplated in paragraph (a) was deemed to be a dividend that was subject to the secondary tax on companies.

(5)     For the purposes of subsection (1), where any amount of any dividend is denominated in any currency other than the currency of the Republic, that amount must be translated to the currency of the Republic by applying the spot rate applicable at the time that the dividend is paid.

(6)       Where a-

(a)     company that makes payment of a dividend to any person withholds an amount of dividends tax from that payment in terms of section 64G(1); or

(b)     regulated intermediary that makes payment of a dividend to any person withholds an amount of dividends tax from that payment in terms of section 64H(1),

that company or regulated intermediary must, for the purposes of this Part, be deemed to have paid the amount so withheld to that person.

“Regulated intermediary” definition of section 64D of ITA

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‘regulated intermediary’ means any-

(a)     central securities depository participant contemplated in section 32 of the Financial Markets Act;

(b)     authorised user as defined in section 1 of the Financial Markets Act;

(c)     approved nominee contemplated in section 76(3) of the Financial Markets Act;

(d)     nominee that holds investments on behalf of clients as contemplated in section 9.1 of Chapter 1 and section 8 of Chapter II of the Codes of Conduct for Administrative and Discretionary Financial Service Providers, 2003 (Board Notice 79 of 2003) published in Government Gazette No. 25299 of 8 August 2003;

(e)     portfolio of a collective investment scheme in securities;

[Paragraph (e) amended by section 70 of Act 7 of 2010 effective on 1 April 2012 and section 73 of Act 25 of 2015 effective on 1 April 2015]

(f)      transfer secretary that is a person other than a natural person and that has been approved by the Commissioner subject to such conditions and requirements as may be determined by the Commissioner; or

[Paragraph (f) inserted by section 70 of Act 7 of 2010 effective on 1 April 2012, amended by section 73 of Act 25 of 2015 effective on 1 April 2015]

(g)     a portfolio of a hedge fund collective investment scheme.

[Paragraph (g) added by section 73 of Act 25 of 2015 and amended by section 60 of Act 17 of 2017 effective on 18 December 2017]

“Dividend” definition of section 64D of ITA

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“dividend” means any dividend or foreign dividend as defined in section 1, including any amount contemplated in section 31(3)(i), that is—

(a)       paid by a company that is a resident; or

(b)       paid by a foreign company –

(i)      if the share in respect of which that foreign dividend is paid is a listed share; and

(ii)     to the extent that that foreign dividend does not consist of a distribution of an asset in specie;

[Definition of “dividend” substituted by section 75(1) of Act 24 of 2011 and amended by section 60(a) of Act 23 of 2018 and by section 36(1) of Act 23 of 2020 deemed effective on 17 January, 2019]

Section 64C (ITA) – Certain amounts distributed deemed to be dividends

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64C.    ……….

[Section 64C added by section 20 of Act 95 of 1967, amended by section 15 of Act 76 of 1968, section 36 of Act 89 of 1969, section 21 of Act 89 of 1969, section 26 of Act 88 of 1971, section 20 of Act 90 of 1972, section 42 of Act 85 of 1974, section 22 of Act 113 of 1977, section 14 of Act 104 of 1979, section 22 of Act 104 of 1980, section 24 of Act 96 of 1981, section 21 of Act 91 of 1982, section 34 of Act 94 of 1983, section 29 of Act 121 of 1984, section 18 of Act 65 of 1986, section 8 of Act 108 of 1986 and section 22 of Act 85 of 1987, repealed by section 33 of Act 90 of 1988, inserted by section 34 of Act 113 of 1993, amended by section 13 of Act 140 of 1993, section 25 of Act 21 of 1994, section 30 of Act 21 of 1995, section 22 of Act 36 of 1996, section 40 of Act 30 of 1998, section 36 of Act 53 of 1999, section 40 of Act 30 of 2000, section 43 of Act 59 of 2000, section 37 of Act 74 of 2002, section 38 of Act 12 of 2003, section 59 of Act 45 of 2003, section 41 of Act 32 of 2004, section 48 of Act 31 of 2005, section 60 of Act 35 of 2007, section 33 of Act 3 of 2008, section 52 of Act 17 of 2009, section 69 of Act 7 of 2010, section 74 of Act 24 of 2011, section 82 of Act 2 of 2012, section 101 of Act 31 of 2013, repealed by section 68 of Act 43 of 2014 effective on 1 April 2017]

Section 64B (ITA) – Levy and recovery of secondary tax on companies

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64B. ………

[Section 64B added by section 20 of Act 95 of 1967, substituted by section 35 of Act 89 of 1969, amended by section 20 of Act 89 of 1969, section 19 of Act 90 of 1972 and section 41 of Act 85 of 1974, substituted by section 33 of Act 94 of 1983, amended by section 7 of Act 108 of 1986, repealed by section 32 of Act 90 of 1988, inserted by section 34 of Act 113 of 1993 amended by section 12 of Act 140 of 1993, section 24 of Act 21 of 1994, section 29 of Act 21 of 1995, section 21 of Act 36 of 1996, section 13 of Act 46 of 1996, section 25 of Act 28 of 1997, section 35 of Act 53 of 1999, section 39 of Act 30 of 2000, section 42 of Act 59 of 2000, section 18 of Act 5 of 2001, section 48 of Act 60 of 2001, section 25 of Act 30 of 2002, section 36 of Act 74 of 2002, section 58 of Act 45 of 2003, section 40 of Act 32 of 2004, section 47 of Act 31 of 2005, section 32 of Act 20 of 2006, section 39 of Act 8 of 2007, section 59 of Act 35 of 2007, section 32 of Act 3 of 2008, section 55 of Act 60 of 2008, section 51 of Act 17 of 2009, section 68 of Act 7 of 2010, section 271 of Act 28 of 2011, section 81 of Act 22 of 2012, section 100 of Act 31 of 2013, repealed by section 68 of Act 43 of 2014 effective on 1 April 2017]