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Income Tax Act, 1962 (Act No. 58 of 1962)

Rates of Normal Tax

Rates of Normal Tax - 2018 - Schedule I (Section 1)

 

1. The rate of tax referred to in section 2(1) to be levied in respect of the taxable income (excluding any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit or severance benefit) of any natural person, deceased estate, insolvent estate or special trust in respect of any year of assessment commencing on or after 1 March 2018 is set out in the table below:

 

Taxable income

Rate of tax

Not exceeding R195 850

18 per cent of taxable income

Exceeding R195 850 but not exceeding R305 850

R35 253 plus 26 per cent of amount by which taxable income exceeds R195 850

Exceeding R305 850 but not exceeding R423 300

R63 853 plus 31 per cent of amount by which taxable income exceeds R305 850

Exceeding R423 300 but not exceeding R555 600

R100 263 plus 36 per cent of amount by which taxable income exceeds R423 300

Exceeding R555 600 but not exceeding R708 310

R147 891 plus 39 per cent of amount by which taxable income exceeds R555 600

Exceeding R708 310 but not exceeding R1 500 000

R207 448 plus 41 per cent of amount by which taxable income exceeds R708 310

Exceeding R1 500 000

R532 041 plus 45 per cent of amount by which taxable income exceeds R1 500 000

 

2. The rate of tax referred to in section 2(1) to be levied in respect of the taxable income of a trust (other than a special trust or a public benefit organisation, recreational club or small business funding entity referred to in paragraph 4) in respect of any year of assessment commencing on or after 1 March 2018 is 45 per cent.

 

3. The rate of tax referred to in section 2(1) to be levied in respect of the taxable income of a company (other than a public benefit organisation, recreational club or small business funding entity referred to in paragraph 4 or a small business corporation referred to in paragraph 5) in respect of any year of assessment ending on or after 1 April 2018 is, subject to the provisions of paragraph 10, as follows:
(a) 28 per cent of the taxable income of any company (excluding taxable income referred to in subparagraphs (b), (c) and (d));
(b) in respect of the taxable income derived by any company from mining for gold on any gold mine with the exclusion of so much of the taxable income as the Commissioner determines to be attributable to the inclusion in the gross income of any amount referred to in paragraph (j) of the definition of ‘‘gross income’’ in section 1 of the Income Tax Act, 1962, but after the set-off of any assessed loss in terms of section 20(1) of that Act, a percentage determined in accordance with the formula:

 

y = 34 − 170

               x

 

in which formula y represents such percentage and x the ratio expressed as a percentage which the taxable income so derived (with the said exclusion, but before the set-off of any assessed loss or deduction which is not attributable to the mining for gold from the said mine) bears to the income so derived (with the said exclusion);

(c) in respect of the taxable income of any company, the sole or principal business of which in the Republic is, or has been, mining for gold and the determination of the taxable income of which for the period assessed does not result in an assessed loss, which the Commissioner determines to be attributable to the inclusion in its gross income of any amount referred to in paragraph (j) of the definition of ‘‘gross income’’ in section 1 of the Income Tax Act, 1962, a rate equal to the average rate of normal tax or 28 per cent, whichever is higher:

Provided that for the purposes of this subparagraph, the average rate of normal tax shall be determined by dividing the total normal tax (excluding the tax determined in accordance with this subparagraph for the period assessed) paid by the company in respect of its aggregate taxable income from mining for gold on any gold mine for the period from which that company commenced its gold mining operations on that gold mine to the end of the period assessed, by the number of rands contained in the said aggregate taxable income; and

(d) in respect of the taxable income derived by any company from carrying on long-term insurance business in respect of its—
(i) individual policyholder fund, 30 per cent; and
(ii) company policyholder fund, risk policy fund and corporate fund, 28 per cent.

 

4. The rate of tax referred to in section 2(1) to be levied in respect of the taxable income of any public benefit organisation that has been approved by the Commissioner in terms of section 30(3) of the Income Tax Act, 1962, or any recreational club that has been approved by the Commissioner in terms of section 30A(2) of that Act or any small business funding entity that has been approved by the Commissioner in terms of section 30C(1) is 28 per cent—
(a) in the case of an organisation, club or small business funding entity that is a company, in respect of any year of assessment ending on or after 1 April 2018; or
(b) in the case of an organisation or small business funding entity that is a trust, in respect of any year of assessment commencing on or after 1 March 2018.

 

5. The rate of tax referred to in section 2(1) to be levied in respect of the taxable income of any company which qualifies as a small business corporation as defined in section 12E of the Income Tax Act, 1962, in respect of any year of assessment ending on or after 1 April 2018, subject to paragraph 7, is set out in the table below:

 

Taxable income

Rate of tax

Not exceeding R78 150

0 per cent of taxable income

Exceeding R78 150 but not exceeding R365 000

7 per cent of amount by which taxable income exceeds R78 150

Exceeding R365 000 but not exceeding R550 000

R20 080 plus 21 per cent of amount by which taxable income exceeds R365 000

Exceeding R550 000

R58 930 plus 28 per cent of amount by which taxable income exceeds R550 000

 

6. The rate of tax referred to in section 2(1) to be levied on taxable income attributable to income derived by a qualifying company within a special economic zone as contemplated in section 12R of the Income Tax Act, 1962, subject to paragraph 7, is 15 cents on each Rand of taxable income in respect of any year of assessment ending on or after 1 April 2018.

 

7. If a company is subject to both paragraphs 5 and 6 in respect of determining the rate of tax to be levied on an amount of taxable income of a company, the tax payable in respect of that amount of taxable income is the lesser of the tax determined under paragraph 5 and paragraph 6 in respect of that amount of taxable income.

 

8. The rate of tax referred to in section 2(2) to be levied in respect of the taxable turnover of a person that is a registered micro business as defined in paragraph 1 of the Sixth Schedule to the Income Tax Act, 1962, in respect of any year of assessment commencing on or after 1 March 2018 is set out in the table below:

 

Taxable turnover

Rate of tax

Not exceeding R335 000

0 per cent of taxable turnover

Exceeding R335 000 but not exceeding R500 000

1 per cent of amount by which taxable turnover exceeds R335 000

Exceeding R500 000 but not exceeding R750 000

R1 650 plus 2 per cent of amount by which taxable income exceeds R500 000

Exceeding R750 000

R6 650 plus 3 per cent of amount by which taxable income exceeds R750 000

 

9.

(a)

(i) If a retirement fund lump sum withdrawal benefit accrues to a person in any year of assessment commencing on or after 1 March 2018, the rate of tax referred to in section 2(1) to be levied on that person in respect of taxable income comprising the aggregate of—
(aa) that retirement fund lump sum withdrawal benefit;
(bb) retirement fund lump sum withdrawal benefits received by or accrued to that person on or after 1 March 2009 and prior to the accrual of the retirement fund lump sum withdrawal benefit contemplated in subitem (aa);
(cc) retirement fund lump sum benefits received by or accrued to that person on or after 1 October 2007 and prior to the accrual of the retirement fund lump sum withdrawal benefit contemplated in subitem (aa); and
(dd) severance benefits received by or accrued to that person on or after 1 March 2011 and prior to the accrual of the retirement fund lump sum withdrawal benefit contemplated in subitem (aa),

is set out in the table below:

 

Taxable income from

lump sum benefits

Rate of tax

Not exceeding R25 000

0 per cent of taxable income

Exceeding R25 000 but not exceeding R660 000

18 per cent of amount by which taxable income exceeds R25 000

Exceeding R660 000 but not exceeding R990 000

R114 300 plus 27 per cent of amount by which taxable income exceeds R660 000

Exceeding R990 000

R203 400 plus 36 per cent of amount by which taxable income exceeds R990 000

 

(ii) The amount of tax levied in terms of item (i) must be reduced by an amount equal to the tax that would be leviable on the person in terms of that item in respect of taxable income comprising the aggregate of—
(aa) retirement fund lump sum withdrawal benefits received by or accrued to that person on or after 1 March 2009 and prior to the accrual of the retirement fund lump sum withdrawal benefit contemplated in item (i)(aa);
(bb) retirement fund lump sum benefits received by or accrued to that person on or after 1 October 2007 and prior to the accrual of the retirement fund lump sum withdrawal benefit contemplated in item (i)(aa); and
(cc) severance benefits received by or accrued to that person on or after 1 March 2011 and prior to the accrual of the retirement fund lump sum withdrawal benefit contemplated in item (i)(aa).
(b)
(i) If a retirement fund lump sum benefit accrues to a person in any year of assessment commencing on or after 1 March 2018, the rate of tax referred to in section 2(1) to be levied on that person in respect of taxable income comprising the aggregate of—
(aa) that retirement fund lump sum benefit;
(bb) retirement fund lump sum withdrawal benefits received by or accrued to that person on or after 1 March 2009 and prior to the accrual of the retirement fund lump sum benefit contemplated in subitem (aa);
(cc) retirement fund lump sum benefits received by or accrued to that person on or after 1 October 2007 and prior to the accrual of the retirement fund lump sum benefit contemplated in subitem (aa); and
(dd) severance benefits received by or accrued to that person on or after 1 March 2011 and prior to the accrual of the retirement fund lump sum benefit contemplated in subitem (aa),

is set out in the table below:

 

Taxable income from

lump sum benefits

Rate of tax

Not exceeding R500 000

0 per cent of taxable income

Exceeding R500 000 but not exceeding R700 000

18 per cent of amount by which taxable income exceeds R500 000

Exceeding R700 000 but not exceeding R1 050 000

R36 000 plus 27 per cent of amount by which taxable income exceeds R700 000

Exceeding R1 050 000

R130 500 plus 36 per cent of amount by which taxable income exceeds R1 050 000

 

(ii) The amount of tax levied in terms of item (i) must be reduced by an amount equal to the tax that would be leviable on the person in terms of that item in respect of taxable income comprising the aggregate of—
(aa) retirement fund lump sum withdrawal benefits received by or accrued to that person on or after 1 March 2009 and prior to the accrual of the retirement fund lump sum benefit contemplated in item (i)(aa);
(bb) retirement fund lump sum benefits received by or accrued to that person on or after 1 October 2007 and prior to the accrual of the retirement fund lump sum benefit contemplated in item (i)(aa); and
(cc) severance benefits received by or accrued to that person on or after 1 March 2011 and prior to the accrual of the retirement fund lump sum benefit contemplated in item (i)(aa).

(c)

(i) If a severance benefit accrues to a person in any year of assessment commencing on or after 1 March 2018, the rate of tax referred to in section 2(1) to be levied on that person in respect of taxable income comprising the aggregate of—
(aa) that severance benefit;
(bb) severance benefits received by or accrued to that person on or after 1 March 2011 and prior to the accrual of the severance benefit contemplated in subitem (aa);
(cc) retirement fund lump sum withdrawal benefits received by or accrued to that person on or after 1 March 2009 and prior to the accrual of the severance benefit contemplated in subitem (aa); and
(dd) retirement fund lump sum benefits received by or accrued to that person on or after 1 October 2007 and prior to the accrual of the severance benefit contemplated in subitem (aa), is set out in the table below:

 

Taxable income from

lump sum benefits

Rate of tax

Not exceeding R500 000

0 per cent of taxable income

Exceeding R500 000 but not exceeding R700 000

18 per cent of amount by which taxable income exceeds R500 000

Exceeding R700 000 but not exceeding R1 050 000

R36 000 plus 27 per cent of amount by which taxable income exceeds R700 000

Exceeding R1 050 000

R130 500 plus 36 per cent of amount by which taxable income exceeds R1 050 000

 

(ii) The amount of tax levied in terms of item (i) must be reduced by an amount equal to the tax that would be leviable on the person in terms of that item in respect of taxable income comprising the aggregate of—
(aa) severance benefits received by or accrued to that person on or after 1 March 2011 and prior to the accrual of the severance benefit contemplated in item (i)(aa);
(bb) retirement fund lump sum withdrawal benefits received by or accrued to that person on or after 1 March 2009 and prior to the accrual of the severance benefit contemplated in item (i)(aa); and
(cc) retirement fund lump sum benefits received by or accrued to that person on or after 1 October 2007 and prior to the accrual of the severance benefit contemplated in item (i)(aa).

 

10. The rates of tax set out in paragraphs 1, 2, 3, 4, 5, 6, 7 and 9 are the rates required to be fixed by Parliament in accordance with the provisions of section 5(2) of the Income Tax Act, 1962.

 

11. The rate of tax set out in paragraph 8 is the rate required to be fixed by Parliament in accordance with the provisions of section 48B(1) of the Income Tax Act, 1962.

 

12. For the purposes of this Schedule, income derived from mining for gold includes any income derived from silver, osmiridium, uranium, pyrites or other minerals which may be won in the course of mining for gold and any other income which results directly from mining for gold.

 

[Schedule I(Section 2) inserted by section 1(1) of the Rates and Monetary Amounts and Amendments of Revenue Laws Act 2018 (Act No. 21 of 2018), Notice No. 18, GG42171, dated 17 January 2019  : effective 21 February 2018]

 

 

_______________________________________________________________________

 

Fixing of rates of normal tax (per Notice No. 18, GG42171, dated 17 January 2019)

 

 

(a) any person (other than a company or a trust other than a special trust) for any year of assessment commencing on or after 1 March 2018;
(b) any company for any year of assessment ending on or after 1 April 2018; and
(c) any trust (other than a special trust) for any year of assessment commencing on or after 1 March 2018.

[Schedule I (Section 2) inserted by section 1(2) of the Rates and Monetary Amounts and Amendments of Revenue Laws Act 2018 (Act No. 21 of 2018), Notice No. 18, GG42171, dated 17 January 2019]