The Johannesburg tax structure before 2001 was based on the source of income. Wealth derived from South African sources of income was subject to tax. However, the same was not applicable for the income derived from sources outside South Africa.
A change took place in the Johannesburg tax after 2001. From this time, inhabitants of South Africa were taxed on all income irrespective of the source. It meant taxes are levied on income received from all sources, both inside and outside South Africa. Residents, who do not have citizenship of South Africa, are taxed on income only from a South African source. Normally, taxes are levied on individuals who reside in South Africa for more than 183 days per year.
The tax year of Johannesburg is from the 1st of March to the 28th of February. Companies, corporations and provisional taxpayers have the facility of paying taxes in installments. Other taxpayers have to pay two provisional tax payments, based on the estimated tax value. A penalty is imposed for late taxpayers. As per the provisions of the "Standard Income Tax on Employees", individuals earning less than R 74,000 per year does not fall under the tax scheme. Dividends received from companies are exempt from tax. Dividends received from foreign companies with a holding of less than 25 % are taxable.
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The tax structure for Johannesburg mid range companies is stated below.
- The corporate income tax is 29% on taxable profits.
- The secondary tax is imposed on 12.5% of distributed dividends.
- Regional establishment levy is 0.1% of total turnover.
- Property tax is deemed at 11.9% of the total property value.
- Occupational injuries insurance contribution is 1.6 % of gross salaries.
- Unemployment insurance is at 1% of gross salaries.
- Value added tax, which is payable by all goods suppliers and service providers, is rated at 14%.
- Apprenticeship tax is 1.0% of gross salaries.
- Capital gains tax, which has been imposed since the 1st of October 2001, is 10% for natural persons and 14.5% to 20% for non-natural persons.
The Johannesburg tax structure is different for citizens and non-citizens of South Africa. A difference in the tax structure was effected after 2001, which imposed taxes on all foreign income.
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