Author Topic: SARS - foreign dividends conversion rate  (Read 424 times)

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SARS - foreign dividends conversion rate
« on: July 25, 2019, 03:57:59 pm »
Hi all

What average USDZAR rate do you use to convert your foreign dividends to ZAR for tax purposes?

For example:

If you are using the LSE:VWRD and received a dividend on 2019-04-10 of $100.00 what rate will you use, and why, to include the dividend on your tax return?

Options include:
1. Average rate for the year of assessment. (See SARS link Table A)
2. Monthly average exchange rate. (See SARS link, Table B)
3. Daily spot rate from SARB. (See SARB link.)

https://www.sars.gov.za/Legal/Legal-Publications/Pages/Average-Exchange-Rates.aspx

https://www.resbank.co.za/Research/Rates/Pages/SelectedHistoricalExchangeAndInterestRates.aspx


Patrick

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Re: SARS - foreign dividends conversion rate
« Reply #1 on: July 25, 2019, 04:02:57 pm »
i did the calculations all three ways, and then chose the one that made the dividends look the least in ZAR terms. For me that was the yearly average.

Lower ZAR divvies means less tax.
« Last Edit: July 25, 2019, 04:05:22 pm by Patrick »

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Re: SARS - foreign dividends conversion rate
« Reply #2 on: July 25, 2019, 04:08:36 pm »
Thanks Patrick.  What source do you use to get the daily average rates? I'm currently using the data from the SARB link I posted.

Patrick

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Re: SARS - foreign dividends conversion rate
« Reply #3 on: July 25, 2019, 04:31:31 pm »
If I remember right I found a link on the sars site. I'll see if I can dig it up again. Might have been SARB y though I imagine both would be accepting for your tax return.

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Re: SARS - foreign dividends conversion rate
« Reply #4 on: July 26, 2019, 11:57:02 pm »
SARS rates can be found here.   https://www.sars.gov.za/Legal/Legal-Publications/Pages/Average-Exchange-Rates.aspx

A couple of notes on translation of foreign income
1.  A taxpayer can elect to utilize either the Spot rate or the average rate
2.  One is not obliged to use the SARS rates (as published above), but can use other rates.  Note though the onus of proof alway's lies with the taxpayer, so you'd need to be able to substantiate the rate being used. When not using the spot rate, I have alway's used the SARS rates (for simplicity and ease of justifying).  Note that if you use daily rates, please keep the proof and source so you can justify it with SARS etc.
3.  You need to be consistent in use of rates in each year of assessment. (But can utilize a different method in a subsequent year).