South Africa: Expiry of Secondary Tax on Companies credits
The Secondary Tax on Companies (STC) regime allowed South African companies to earn STC credits from their own investments and to use these credits as an offset to reduce the tax payable by the company to the South African Revenue Services (SARS) when declaring their own dividend.
It was foreseen that the withholding tax on shareholders would replace the STC after a transition period ending on
1 April 2015
during which dividend paying companies had the possibility to use their STC credits to offset the withholding tax that is imposed on shareholders.
The SARS "Draft comprehensive guide to dividend tax" confirms the termination of the STC credits regime on 1 April 2015 and therefore the dividend withholding tax will be applied to all shareholders from this date.
Further information
For further information, customers may contact the Clearstream Banking1 Tax Help Desk.
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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.