Part 4 of 7 · Money in and out
Tax, Exchange Control and Getting Your Profits Out
South Africa taxes residents on worldwide income and non-residents on South African-source income. Repatriation is routine where the paperwork trail is clean — and every horror story about money stuck here is, on inspection, a story about missing entry documentation.
Part 4 of 757% through the guide
Section 5Taxation
The February 2026 Budget’s theme for business was continuity: no headline rate changes, meaningful relief at the small end, and administration tightening everywhere.
Source: National Treasury, February 2026 Budget. Verify current thresholds with SARS or an adviser before relying on them.
| Tax | Rate / rule (2026/27) | Notes |
|---|---|---|
| Corporate income tax | 27% | Assessed-loss utilisation limited to 80% of taxable income; gold mining and long-term insurance have special regimes |
| Small business corporation | 0% to 27% progressive | Graduated relief for qualifying companies with gross income up to R20m |
| Turnover tax (micro) | 0–3% of turnover | Threshold rises to R2.3m from 1 March 2026; 0% bracket now up to R600 000 |
| VAT | 15% standard rate | Compulsory registration threshold rises to R2.3m of taxable supplies from 1 April 2026 (voluntary from R120 000); exports zero-rated |
| Dividends tax | 20% withholding | Reduced by many treaties; exempt between SA resident companies |
| Capital gains | 80% inclusion (companies) | Effective CGT rate 21.6% for companies |
| Interest / royalties WHT | 15% / 15% | Interest broadly exempt if paid by banks or government, or on listed debt; treaty relief common |
| Property transfer duty | 0% up to R1.21m, to 13% above R13.31m | On property acquisitions not subject to VAT |
| Employment levies | UIF 2% (split), SDL 1% | Plus PAYE withholding on salaries |
| Global minimum tax | 15% (Pillar Two) | In-scope multinational groups (€750m+) must file GloBE returns with SARS |
Three practical notes
- The treaty network is a genuine asset. Several dozen double-tax agreements reduce withholding rates and give holding-structure options, and South Africa’s headquarter-company regime offers a conduit framework for African investment — though it is used less than designed.
- Transfer pricing and thin-capitalisation enforcement is real. Intercompany funding and management fees into South Africa need contemporaneous documentation and arm’s-length support.
- Compliance status is commercial infrastructure. The SARS tax-compliance PIN is demanded by banks, funders, licensing authorities and large customers alike, so treat it as a standing asset rather than an annual scramble.
Section 6Foreign investment, exchange control and repatriation
South Africa welcomes foreign ownership with very few sectoral restrictions. There is no general FDI approval requirement, foreigners may own companies and immovable property outright, and the constitution protects property rights subject to law. Two regulatory layers still shape how money moves.
Exchange control: the FinSurv system
- Cross-border flows are administered by the SARB’s Financial Surveillance Department through authorised-dealer banks — in practice, your banker executes and documents most approvals rather than you applying to the central bank directly.
- Inward investment is straightforward: record the capital introduction properly at your bank, because that documentation is what guarantees frictionless repatriation later.
- Repatriation of dividends, capital, interest, royalties and fees is routine where the paperwork trail is clean and tax is settled. Royalty and certain IP arrangements need specific approval, and intellectual-property transfers offshore remain a regulated area needing early advice.
- Local borrowing by foreign-owned companies is no longer meaningfully restricted for ordinary operations, but intra-group loan terms interact with both FinSurv rules and transfer pricing.
Investment screening and protections
- A national-security review mechanism (section 18A of the Competition Act) allows government to review foreign acquisitions of firms in identified security-sensitive sectors. Ordinary commercial deals outside those lists proceed through standard competition merger control, which is professional and precedent-driven.
- The Protection of Investment Act frames investor protections domestically; South Africa relies on this plus treaty and customary protections rather than a wide bilateral-investment-treaty network.
- Dispute resolution is credible: independent courts, an active arbitration ecosystem (AFSA), and enforcement of foreign arbitral awards under the New York Convention.
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