Acts Online
GT Shield

Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part VIII : Dividends Tax

64FA. Exemption from and reduction of tax in respect of dividends in specie

 

 

(1) Where a company declares and pays a dividend that consists of a distribution of an asset in specie, that dividend is exempt from the dividends tax to the extent that it constitutes a distribution of an asset in specie if—
(a) the person to whom the payment is made has, by the date of payment of the dividend, submitted to the company—
(i) a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the portion of the dividend that constitutes a distribution of an asset in specie would, if that portion had not constituted a distribution of an asset in specie, have been exempt from the dividends tax in terms of section 64F; and
(ii) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the exemption applicable to the beneficial owner referred to in subparagraph (i) change or the beneficial owner cease to be a beneficial owner;
(b) the beneficial owner forms part of the same group of companies, as defined in section 41, as that company;
(c) the dividend constitutes a disposal as contemplated in paragraph 51A of the Eighth Schedule; or
(d) the dividend constitutes a disposal as contemplated in paragraph 67B(2) of the Eighth Schedule.

[Paragraph (d) to be commenced]

 

(2) A company that declares and pays a dividend that consists of a distribution of an asset in specie is liable for the dividends tax at a reduced rate in respect of the portion of the dividend that constitutes the distribution of an asset in specie if the person to whom the payment is made has, by the date of payment of the dividend, submitted to the company—
(a) a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the portion of the dividend that constitutes a distribution of an asset in specie would, if that portion had not constituted a distribution of an asset in specie, have been subject to that reduced rate as a result of the application of an agreement for the avoidance of double taxation; and
(b) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the reduced rate applicable to the beneficial owner referred to in paragraph (a) change or the beneficial owner cease to be the beneficial owner.