In 2008, Treasury announced that secondary tax on companies (STC) would be replaced with a dividend tax, in line with global norms.The process was designed to take place over a few years in order to fully test the legislation against public comment before implementation.
In the 2010 Budget,Treasury announced that most issues around the implementation of dividend tax have been resolved. However, a"number of smaller issues” remain,which include • Required changes to the current and the proposed definition of what constitutes a dividend. For example, a new definition for what constitutes a foreign dividend is required, and"certain defects” within the current definition for STC need remedying. • "Transitional issues” between the current and proposed regimes. • Practical problems relating to in specie dividends. • Further refinements to the proposed withholding system,where companies would pay dividend tax on the shareholders behalf.For many investors, the introduction of dividend tax will go barely unnoticed, because it will be paid on their behalf and is unlikely to negatively affect their investment income.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.