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Tax law in Cape Town, South Africa is governed by the South African Revenue Service (SARS). It oversees all taxation, inclusive of Income Tax, Corporate Tax, Capital Gains Tax, VAT and Estate Duty. Tax Law is complicated and continually evolving, with the legalities impacting individuals, corporations and trusts.
Lawyers with a focus on tax law can assist in multiple situations such as: planning and advice, compliance, dispute resolution and tax litigation. You may require legal help if you're facing an audit by the SARS, setting up a large estate or trust, initiating a business venture, dealing with cross-border transactions, or resolving disputes related to tax. Legal advice can ensure you comply with existing laws, exploit potential tax benefits, minimize risk and resolve disputes.
Cape Town tax law is governed by national policies, so the same principles apply as in the rest of South Africa. Income Tax is applicable to all individuals and corporations earnings, whether based locally or globally. Corporate Tax applies to profit-making organizations. VAT is a consumer tax added to the cost of goods or services. Capital Gains Tax applies when disposing of assets. Lastly, Estate Duty involves tax on the estate of a deceased person. South Africa has a residence-based tax system hence, residents pay tax on worldwide income, while non-residents are taxed on SA-sourced income.
Tax residency refers to a person who is either ordinarily resident in South Africa or meets the physical presence test stipulated by SARS. They are subjected to tax on their worldwide income.
The physical presence test considers you a resident for tax purpose if you have been physically present in the country for more than 91 days in total during the current and each of the preceding five tax years, and you were physically present in the country for a period exceeding 915 days in total during the preceding five tax years.
Corporate Tax in South Africa is a flat rate of 28% on profit earnings. This is calculated as income minus allowable tax deductions and exemptions.
Yes, VAT registered businesses in South Africa can reclaim the tax paid on qualifying expenses and imports.
Failure to comply with tax laws, whether by not filing or not paying, can lead to penalties, interest charges and even legal prosecution by SARS.
Additional resources include the South African Revenue Service (SARS) and The Tax Ombud. Law schools and libraries often provide resources as well. The South African Institute of Tax Professionals (SAIT) and The South African Legal Resources Centre can also be resources for assistance.
If you require legal assistance in matters relating to tax, it is advisable to consult with a lawyer specialising in tax law. Prepare a comprehensive record of your situation, gather all relevant documents and schedule a consultation. Remember to ask about fees, potential outcomes and what further information might be required.
