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Don't delay in submitting your dividends tax return!

by , 25 February 2013
The deadline for submitting your dividends tax return is fast approaching -it's on 1 March! Many businesses are hoping for this week's Budget Speech to implement tax deductions to ease their financial burden. They're hoping that dividends tax will be one of the areas affected, but that's not likely as it's only just been implemented, and this any changes implemented in this year's Budget Speech will only affect the following tax-year. Here's how to make sure you submit your dividends tax to SARS correctly.

In the most recent tax year, from March 2011 to February 2012, company tax accounted for 20.4% of the state's tax revenue, says MoneywebTax.
That's why with the Budget Speech just days away, businesses are hoping Finance Minister Pravin Gordhan will introduce tax deductions across the board.
And with 1 March the deadline for submitting your dividends tax return, dividends tax is top of mind for many.
'People get less from dividends these days compared to when STC was in place, so dividend tax should be [reduced to the same as Secondary Tax on Companies], at around 10%, suggests Fin24 user Deena Naidoo.
Changes to dividends tax are unlikely!

But the Budget Speech is unlikely to introduce any changes to dividends tax, as it's only just been introduced.
Added to this, Secondary Tax on Companies (STC), now phased out and replaced by dividends tax, has been stable this year so we're unlikely to see any changes, said Des Kruger, a director for tax at Ernst & Young in the Business Report.
And any changes that are implemented in this week's Budget Speech will only affect next year's taxes.
So it's still it's your responsibility to request the dividends tax return and submit the relevant documents to SARS.
Based on the calculations, you'll have to pay over your 15% dividends tax as soon as it's been calculated.
Here's how to meet your dividends tax deadline

If you've received or paid out a dividend this tax-year, you'll have to submit information to SARS on dividends received, who received the dividend and who paid it over to SARS.
And if you use internet banking to pay SARS, you'll notice that the previous 'STC beneficiary' has been removed and replaced with a beneficiary for Dividends Withholding Tax (WHT), explains SARS
This new beneficiary lets you pay both STC and dividends tax to SARS, as you may still have to account for STC from any dividends you received before dividends tax was introduced on April 2012, writes the Tax Bulletin.
So get all your financial records together and work out your business dividends tax today – you only have a few days left to meet this deadline!

If you need more information on dividends tax, get your hands on the Practical Tax Loose Leaf. In the Practical Tax Loose Leaf we've got a dedicated chapter on dividends tax. In it, you'll discover:
  • What's the difference between dividends tax (DT) and Secondary Tax on Companies (STC)?
  • What is a dividend and how's it paid?
  • How do you pay a dividend?
  • Your company must withhold and pay the DT to SARS on behalf of the shareholder
  • Your company's liable for the DT – not the shareholder if you pay out one of these two types of dividends
  • When do you become liable to pay the DT?
  • Who's exempt from DT?
  • And much, much more!
Get your copy of the Practical Tax Loose Leaf  today!

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