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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Double Taxation Relief Manual: Guidance by country: South Africa: Dividends

For amounts paid or credited on or after 1 April 2012, dividends are taxable in South Africa at a rate not exceeding 5% where the United Kingdom beneficial owner is a company which controls at least 10 per cent of the South African company paying the dividend (unless this company is a property investment company).

Where the dividend is a qualifying dividend paid by a property investment company, dividends are taxable in South Africa at a rate not exceeding 15%. For the purposes of the agreement, a property investment company in South Africa is a company that the competent authorities of the two countries agree corresponds to a real estate investment trust. Currently, there are no such investment companies in South Africa.

In all other cases, dividends paid by South African companies and beneficially owned by United Kingdom residents are taxable in South Africa at a rate not exceeding 10%.

Before 1 April 2012 dividends arising in South Africa were exempt from withholding tax if the beneficial owner of the dividends was a UK resident company which controlled, directly or indirectly, at least 10% of the voting power in the company paying the dividends. On other dividends the maximum rate of withholding tax was 15%, but prior to 1 April 2012 South Africa did not impose any withholding tax on dividends under its domestic law.

The reduction to these rates is not given where the dividend is effectively connected with (see INTM153110 eighth sub-paragraph) a business which the United Kingdom resident carries on through a permanent establishment in South Africa.