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Chemical Technology • November 2015
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dividends, etc, of 10 % to 15 %.
• Capital Gains Tax – On the sale of the asset (normally
paid by the owner).
• Income Tax – Normal income tax.
• Dividends Tax – If dividends are paid, tax is deducted
by the payer.
• Donations Tax – The recipient is taxed but is also non
deductable by the payer.
• Excise Duties and Levies – The normal import and export
payments.
• Pay as you Earn (PAYE) – Employee tax.
• Skills Development Levies – A small percentage of the
company’s payroll.
• Secondary Tax on Companies – Same as dividends but
paid differently.
• Value Added Tax (VAT) – Used by some countries instead
of GST.
• Sales Tax (GST) – Used by some countries instead of VAT.
• Social Security Levy/Tax, eg, UIF – Similar to Skills De-
velopment Levies
• Others that are specific to a country.
African tax authorities are also becoming more integrated
and their approach more unified, eg, ‘Transfer Pricing’ is a
hot topic in Africa. There is growing focus by African states
on ‘Transfer Pricing’ arrangements of multinational corpora-
tions. Transfer pricing relates to the commercial agreements
made between ‘related parties’, eg, sharing work between
two offices in the same company one of which, for example,
is in the USA and the other in South Africa.
Sometimes related companies may engineer their inter-
company commercial agreements in such a way so as to
minimise or avoid taxes. So for example, if South Africa’s
income tax rate is 28 %, whereas the US tax rate is, say,
20 %, a company may set up their intercompany rates to
push more profits into the US, thus reducing the tax rate
from 28 % to 20 %. The key is to ensure that all ‘related
party’ transactions are based on an ‘arms-length’ principle.
The ‘arms length’ principle, on which tax authorities work, is
that pricing between related parties should be comparable
to pricing to a third party non-related customer. That way
MINERALS PROCESSING AND METALLURGY