Corporate Tax Rates in South Africa: Companies, SBCs, Trusts

The standard South African company tax rate is 27%, but that is only the starting point. A company may also need to consider Small Business Corporation (SBC) rates, assessed losses, capital gains tax, dividends tax, VAT, PAYE, and withholding taxes.

Key Takeaways

SARS lists the standard company tax rate as 27% for years of assessment ending from 1 April 2026 to 31 March 2027.

Qualifying Small Business Corporations use progressive SBC rates instead of the flat 27% rate.

Trusts other than special trusts are taxed at a flat 45%.

Dividends tax is generally 20% unless an exemption or treaty-reduced rate applies.

Assessed losses and capital gains can change the final tax payable.

Standard company tax rate

SARS lists the rate for companies as 27% for years of assessment ending on any date from 1 April 2026 to 31 March 2027.

This applies to taxable income, not accounting profit. The company must adjust accounting profit for:

Non-deductible expenses.
Capital allowances.
Assessed losses.
Taxable capital gains.
Exempt income.
Timing differences.
Specific industry or incentive rules.

Small Business Corporation rates

Qualifying SBCs pay tax under a progressive table. For years of assessment ending from 1 April 2026 to 31 March 2027, SARS lists:

Taxable income	SBC tax
R1 - R99,000	0%
R99,001 - R365,000	7% of taxable income above R99,000
R365,001 - R550,000	R18,620 + 21% above R365,000
R550,001 and above	R57,470 + 27% above R550,000

SBC status has qualifying requirements. Do not use the SBC table simply because the company is small. Check gross income, shareholder/member rules, investment income, personal-service company rules, and other exclusions.

Trusts and special trusts

SARS lists trusts other than special trusts at a flat 45% rate. Special trusts may use individual-type rates in specified circumstances. A trust can also create beneficiary, conduit, CGT, donation, and anti-avoidance issues, so the headline trust rate is rarely enough for planning.

Dividends tax

Dividends tax is separate from company income tax. SARS states that the dividends tax rate increased to 20% for dividends paid on or after 22 February 2017, unless an exemption or reduced rate applies.

Practical checks:

Is the shareholder exempt?
Is a valid declaration and undertaking on file?
Does a double taxation agreement reduce the rate for a non-resident shareholder?
Was DTR01/DTR02 submitted where required?
Was payment made by the deadline?

Capital gains tax for companies

Companies include taxable capital gains in taxable income. SARS Budget 2026 FAQs list the maximum effective CGT rate for companies as 21.6%, reflecting the company inclusion rate and 27% company rate.

Keep base-cost records for property, shares, business assets, and intellectual property. A capital profit in the accounts is not automatically the taxable capital gain.

Assessed losses

Assessed losses can reduce company taxable income, but the rules are technical. SARS Interpretation Note 33 explains trade and income-from-trade requirements and discusses the 80% limitation. A company should not assume that an old assessed loss eliminates all current tax.

Before using an assessed loss:

Confirm the company traded during the year.
Reconcile the assessed-loss balance to prior assessments.
Check the 80% limitation.
Keep tax computations and SARS assessments.

Quick rate checklist

Question	Why it matters
What is the year-end?	Company rates are tied to years of assessment ending in specified periods.
Is the taxpayer a company, trust, or SBC?	Different tables may apply.
Is taxable income different from accounting profit?	Tax adjustments determine the actual rate base.
Are dividends paid?	Dividends tax may apply after company tax.
Are there capital gains?	CGT inclusion can affect taxable income.
Are there cross-border payments?	Withholding tax and treaties may matter.

Simple company tax example

Assume a company has taxable income of R800,000 for a year of assessment ending during the 1 April 2026 to 31 March 2027 period. If no special regime applies, the starting company tax calculation is R800,000 x 27% = R216,000.

That calculation is only a starting point. The company must still check assessed losses, capital allowances, taxable capital gains, and disallowed expenses. If the same entity qualifies as an SBC, the progressive SBC table may produce a different result. If the company then pays an after-tax dividend to an individual shareholder, dividends tax may also be relevant.

Rate planning before year end

Before year end, directors should review the tax computation rather than waiting for the ITR14. The most useful checks are whether fixed assets have been correctly classified, whether shareholder or connected-party transactions are documented, whether payroll and VAT accounts reconcile, and whether dividends were declared with the correct withholding process.

For small companies, the SBC test should be done every year. A company can be small in ordinary language but fail the statutory SBC rules because of shareholding, investment income, personal-service activity, or other exclusions.

Frequently Asked Questions

Are all South African companies taxed at 27%?

No. The standard company rate is 27%, but qualifying SBCs use progressive rates, approved special regimes may apply, and the final tax depends on taxable income after adjustments.

Is dividends tax included in the company tax rate?

No. Dividends tax is separate and generally applies when a dividend is paid to the beneficial owner, subject to exemptions or reduced treaty rates.

Can an assessed loss reduce company tax to zero?

Sometimes, but not automatically. The company must check trade requirements, assessed-loss balances, and the 80% limitation.

What rate applies to trusts?

Trusts other than special trusts are generally taxed at 45%. Special trusts and beneficiary distributions require separate review.

Sources

This guide is educational. Verify the current SARS rate table and company facts before filing an ITR14 or declaring dividends.