The payment for Securities Transfer Tax is an important step in the transfer transaction.

What is it?
Security 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. It was implemented to replace Stamp Duties Act, No. 77 of 1968 and Uncertificated Securities Tax Act, No. 31 of 1998 to try and simplify administration.

A security in essence means any:
share or depository receipt in a company; or
member’s interest in a close corporation (CC);

Definition of securities as per the Companies Act no 71 of 2008:
‘‘securities’’
means any shares, debentures or other instruments, irrespective of their form or title, issued or authorized to be issued by a profit company;

Definition of share as per the Income Tax Act no 58 of 1962
“share”
means, in relation to any company, any unit into which the proprietary interest in that company is divided;

Securities transfer tax is levied in respect of:
every transfer of any security issued by:

• a close corporation or company incorporated, established or formed inside the Republic; or
• a company incorporated, established or formed outside the Republic and listed on an exchange
• any reallocation of securities from a member’s bank restricted stock account or a member’s unrestricted and security restricted stock account to a member’s general restricted stock account.

Rate:
Securities tax is levied at the rate of 0,25%.

What is the taxable amount on which Securities Transfer Tax is payable?
Purchase of listed securities through or from a member:

• The consideration for which the security is purchased.

Transfer of listed securities by a participant or in any other manner:

• The amount of the consideration for the security declared by the person who acquired that security; or
• The closing price of the security where no consideration amount declared or the amount declared is less than the lowest price of that security.

Transfer of unlisted securities:

• The amount or market value of the consideration given for the transfer of the security.
• Where there is no consideration given or the consideration is less than the market value of the security, the market value of the security.
• Where the security is cancelled or redeemed, the market value of that security immediately before the cancellation or redemption value must (market value must be determined as if the security was never cancelled/redeemed).

Who is it for?
The tax applies to the purchase and transfers of listed and unlisted securities.
With the transfer of an unlisted security, the company which issued the unlisted security is liable for the payment of the tax to SARS. The company may however, recover the tax payable from the person to whom the security is transferred.

When should it be paid?

• Listed securities: Securities transfer tax must be paid by the 14th day of the month following the month during which transfers of listed securities occurred.
• Unlisted securities: Securities transfer tax must be paid within two months from the end of the month in which the transfer of the unlisted security took place.

How should it be paid?
Securities transfer tax can only be paid by electronic payment using the SARSe-STT system. Savvic Statutory Services is registered to transact on e-filing for and your behalf as part of the share transfer transaction.
For more information please visit http://www.sars.gov.za/Pages/default.aspx or contact us with any queries.