What Is Security Transfer Tax?
- Securities Transfer Tax is levied on every transfer of a security and was implemented from 1 July 2008 under the Securities Transfer Tax Act, No. 25 of 2007, together with the Securities Transfer Tax Administration Act, No. 26 of 2007.
- A Security could be in the form of:
- Share or depository in a company.
- Member’s interest in a close corporation(CC).
What Is It Levied For?
- Every transfer of any security issued by:
- A close corporation or company incorporated, established or formed inside South Africa; or
- A company incorporated, established or formed outside South Africa and listed on an exchange.
What is the STT levy rate?
- STT is levied at 0.25%
Who is Liable to pay STT?
- Listed Shares
Where listed shares are purchased through a JSE stockbroker, STT is payable on the purchase consideration. It is payable by the stockbroker who may recover it from the purchaser.
- Unlisted shares
STT is payable on the higher of the consideration and the market value of the shares or member’s interests. It is payable by the company or close corporation the shares or member’s interests of which are transferred, but may be recovered from the transferee.
We would generally assume the value of sale to be the market value.
Steps To Follow In Filing A STT Return :
- Log into SARS website,and access the profile of the respective profile.
- Click on the ‘Services‘ tab found at the top, then ‘Other services‘ found on the left and click on ‘setup’. Thereafter, select the box you wish to register for, which in this case will be ‘eSTT and eStamps’ .
3. Click on ‘eSTT and eStamps‘ found under ‘other Services’, and then into ‘New‘ under the eSTT heading found in the blue column.
4. Select the type of security that STT needs to be captured for. In our case it will be ‘Unlisted securities‘
5. Enter the details of the respective profile.
6. Enter the actual amount transferred in the field provided. The system will automatically calculate the taxes payable on that.
7. Tick the declaration box and submit.
8. As with every other tax, Load payment. Ensure that payment is made no later than the stipulated date to avoid penalties and interest.