Page 11 - Companies & Dividend Tax

COMPANIES & CLOSE CORPORATIONS

SBC – Illustration

• The cost (excluding VAT) of the non-manufacturing assets (delivery van,
computer and furniture) can either be written off to R1 each in terms of

section 11(e) (as above) or in terms of section 12E(1A) (that is a

50/30/20% write off (no apportionment is made for a part year)).

• It will be the best for Bizzie as-a-bee to elect section 11(e) for all

assets with a cost of R7 000 or less.

• You should also explain the special tax rates applicable to a SBC to

Bizzie, but remember to mention that 80% of the net capital gains are
included in income with no annual exclusion available.

• Also worth mentioning is that Dividend Tax will be levied at 20% from

dividends declared to Bizzie.

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