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HMRC internal manual

Double Taxation Relief Manual

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

Documents needed to support the underlying claim

The accounts showing the profits out of which the dividend was paid and the Notice of Assessment to Income Tax showing the final liability to tax on those profits will be required by the Underlying Tax Group. Profits for the year ended 30 September 2008 or 31 December 2008 are assessed in the tax year ended 31 December 2008.

Admissible and inadmissible taxes

See DT17351.

Credit is given for tax discharged by way of negotiable tax credit certificates (NTCCs) issued under Section 37E of the South African Income Tax Act. The credit is limited to the purchase price of a certificate.

Reserves

Realised capital profits credited to the “non-distributable” or capital reserves are regarded as relevant profits for the year they arise. The treatment of losses follows what is shown in the accounts. If the accounts show the loss debited from current year profits, then current year relevant profits are reduced accordingly. But if the loss is deducted from previous years’ relevant profits in the non-distributable or capital reserves, then the amounts in the reserves are debited.