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Shares / Tax on foreign share dividends
« on: January 10, 2019, 09:42:04 am »
Hi All,
How are dividends on foreign shares taxed by SARS? I'm talking about completely foreign companies and ETFs, brokered through an offshore broker in USD, not dual listed shares. It's difficult to pin down the rules, because the web is full of old or inconsistent information.
One example I saw goes like this:
R100 000 foreign dividends received.
- 26/41 * R100 000
= R36 585 added to personal income tax taxed at income rate (typically 40 %)
Questions:
How are dividends on foreign shares taxed by SARS? I'm talking about completely foreign companies and ETFs, brokered through an offshore broker in USD, not dual listed shares. It's difficult to pin down the rules, because the web is full of old or inconsistent information.
One example I saw goes like this:
R100 000 foreign dividends received.
- 26/41 * R100 000
= R36 585 added to personal income tax taxed at income rate (typically 40 %)
Questions:
- Is there a dividend withholding tax (typically 15%-20%) levied in the foreign jurisdiction on the R100 000 before it hits my account? So do I pay double taxes?
- How do I convert USD to ZAR? Average over the year or at the date of declaration
- Are there any foreign tax credits I can use? The ITR12 SARS form seems to suggest so.
- How does SARS calculate foreign dividend exemptions? See attached shot of ITA34 section