While earnings from your JSE-listed shares are taxable, there are ways to minimise the tax you have to pay.
Do you know how your investment returns on your investments in the stock market are taxed?
Investing in the stock market is a smart way to grow your money and build financial wealth. But what about paying tax on your shares? How do you ensure the tax you pay does not eat away at your returns and that you maximise the amount you can put back into your pocket?
Having a better understanding of the different types of taxes that apply to your shares can help you structure your portfolio in a tax-efficient way to minimise taxes and maximise your returns.
What aspects of your investments are taxable?
South Africa has a residence-based tax system, which means South African tax residents are taxed on their worldwide income. The tax consequences will, however, be determined by the type of investments you have, ie South African or international investments. Taxes applicable to your investments generally fall into three categories:
How much taxes will you pay?
How much you will pay in taxes will be determined by your marginal income tax rate, the amount of net capital gains, and the type and amount of income you earn. Generally, the more income you earn, the more tax you will pay. Full disclosure is required in your tax returns submitted to SARS. However, there are ways to minimise the amount you have to pay in taxes on your investments.
Tips to minimise the taxes you pay
Want to know more? Here's what you do.
This information is for general information purposes only and is not legal or tax advice.
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