What is Securities Transfer Tax?
Securities Transfer Tax is levied on every transfer of a security and was implemented from 1 July 2008 under the Securities Transfer Tax Act, No. 25 of 2007, together with the Securities Transfer Tax Administration Act, No. 26 of 2007.
FAQ
What is a security?
When is Securities transfer tax levied?
On every transfer of any security issued by:
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a Close Corporation or company incorporated, established, or formed inside South Africa.
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a Company incorporated, established, or formed outside South Africa and listed on an exchange.
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any reallocation of securities from a member’s bank restricted stock account or a member’s unrestricted and security restricted stock account to a member’s general restricted stock account.
What is STT tax rate in South Africa?
The security transfer tax rate is 25%.
How is securities transfer tax calculated?
Securities tax is levied at the rate of 25% on the market value or consideration received for the shares.
Who is liable for Securities Transfer Tax?
Securities tax is applicable when there is a transfer of listed or unlisted shares:
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When listed securities are bought or transferred through or from a member or participant, the member or participant is liable for the tax. That member or participant may, however, recover the tax payable from the persons to whom the securities were transferred.
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The transfer of any other listed security will result in the person, to whom the security is transferred, being liable for the tax. The tax must, however, be paid through the member or participant holding the security in custody. Should this not be the case, the tax must be paid through the company that issued the listed security.
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With the transfer of an unlisted security, the company which issued the unlisted security is liable for the tax. The company may, however, recover the tax payable from the person to whom the security is transferred.
What steps must you take?
Any person to whom an unlisted security is transferred must inform the company which issued that security of the transfer within 30 days of the date of that transfer. An electronic declaration must be completed and sent for the transfer of every security on the SARS e-STT system.
If the securities transfer tax is not paid in full within the set period, interest will be charged at the set rate. A 10% penalty will also be applied, if any amount remains unpaid after the prescribed period or if the taxpayer fails to declare or makes an incorrect statement on the declaration form.
When should Securities Transfer Tax be paid?
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Listed securities: Securities transfer tax must be paid by the 14th day of the month following the month during which transfers of listed securities occurred.
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Unlisted securities: Securities transfer tax must be paid within two months from the end of the month in which the transfer of the unlisted security took place.
How should Securities Transfer Tax be paid?
Securities transfer tax can only be paid by electronic payment using the SARS e-STT system.
Zeelie Professional Accountants SA can assist you with your Securities Transfer Tax submission.
Other tax services provided include:
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Annual Income Tax Returns
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Dividends Tax Returns
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EMP201 Employee Payroll Tax Returns
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EMP501 Employee Tax Reconciliation Returns
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Income Tax Registrations
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PAYE Registration
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Provisional Tax Returns
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Tax Clearance Certificates
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Tax Directives
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Tax Practitioner Service eg. SARS Liaison
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Tax Structuring
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VAT Registrations
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VAT Returns, monthly or every 2 months
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