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FDI: Treatment and operations, nes
From 1 April 2012, a dividends tax (DT) replaced the Secondary Tax on Companies (STC). The DT rate is 15% on receipt of dividends, whereas STC was imposed on companies (at a rate of 10%) on the declaration of dividends.
By contrast with the STC, the DT allows reduced rates for foreign residents, in instance where Double Taxation Agreement (DTA) exists between South Africa and their country of residence. This normally requires the foreign beneficial owner to be a company and to hold between 10% and 25% of the share capital of the South African company declaring the dividend.
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