Tax in South Africa: VAT, income tax, company tax, capital gains
15%
South Africa charges 15% VAT on most goods and services. The rate is verified against South African Revenue Service (SARS) on 19 August 2026; the top personal income-tax rate is 45% (2026-27 tax year, South African Revenue Service (SARS)), and the headline company tax rate is 27% (South African Revenue Service).
VAT in South Africa
Value-added: VAT is charged on sales and reclaimed on purchases, so only the added value is taxed.
- Standard rate
- 15%
- Local name
- VAT — Value Added Tax
- Type
- VAT
- Reduced rates
- None on record
- Filing
- Monthly / Annual
- Authority
- South African Revenue Service (SARS)
- Current rate since
- 1 January 2000
Introduced 1991
VAT arrived in South Africa in 1991, in the final years of apartheid and in the middle of the negotiations that would end it — and it arrived over fierce objection. On 4 and 5 November 1991 the Congress of South African Trade Unions called a two-day national stayaway against taxing basic foodstuffs, health care and essential services. Three and a half decades later the rate is still 15%, and an attempt to nudge it higher in 2025 collapsed within weeks.
What it replaced: The General Sales Tax, a single-stage sales tax that VAT superseded in 1991.
Income tax in South Africa
The top personal income-tax band is 45% for the 2026-27 tax year.
Company tax in South Africa
The headline corporate income tax rate is 27%. In effect since 1 January 2026.
27% for years of assessment ending on or after 31 March 2023 (previously 28%). Budget 25 February 2026: no change for YAs ending 1 April 2026 - 31 March 2027. smallBusiness.rate shows the main reduced band (21%); lower bands 0% and 7%. | Cross-check: OECD 2026: central statutory CIT 27%, combined (central+sub-central) 27% Reduced rate 21%, not modelled as a small-company rate: Small business corporations (qualifying SBC): progressive scale for years of assessment ending 1 Apr 2026 - 31 Mar 2027: 0% up to R99,000; 7% of R99,001-R365,000; R18,620 + 21% of R365,001-R550,000; R57,470 + 27% above R550,000.
Capital gains tax in South Africa
- Shares
- 40% of the net capital gain (after the annual exclusion) is included in taxable income and taxed at the individual's ordinary marginal income tax rates; maximum effective rate 18% for individuals.
- Property
- Same as shares: 40% inclusion in taxable income at marginal rates; max effective 18%.
- Holding period
- None for CGT (no short/long-term distinction). Gains on shares held for at least 3 years are deemed capital (s9C) - not verified in this pass; shorter holdings can be revenue (fully taxable) depending on intention.
Did you know? South Africa tax facts
South Africa's VAT was met with a two-day national stayaway: on 4 and 5 November 1991 COSATU called a general strike against taxing basic foodstuffs, health care and essential services, and about 80% of the manufacturing workforce joined it.
COSATU and the ANC called the result a referendum held in the streets. The government put the cost at an estimated R25,000 million and 70,000 jobs.
Source: South African History Online — COSATU leads an anti-VAT strike ↗A VAT rise can be announced, legislated for, programmed into tills — and then called off with a week to spare: South Africa's move from 15% to 15.5% was due on 1 May 2025 and was reversed on 24 April.
The revenue service had to tell vendors to keep charging 15% rather than 15.5% from 1 May, after the increase announced in the 2025 Budget ran into opposition inside the governing coalition and a court challenge.
Source: South African Revenue Service — Practical implication on Finance Minister's decision to reverse VAT ↗South Africa introduced capital gains tax only on 1 October 2001 — and it is not a separate tax: 40% of an individual's net gain above the R40,000 annual exclusion is added to taxable income, 80% for companies.
Wikipedia: CGT was 'First introduced on 1 October 2001'; '40% of the net gain exceeding R 40 000 exclusion for individuals is added to their taxable income'; 'For companies, close corporations and trusts 80% is added'.
Source: Wikipedia — Taxation in South Africa · checked 10 October 2026 ↗South Africa's tax year ends on the last day of February, not December — the 2024/25 year ran from 1 March 2024 to 28 February 2025 — and income tax there dates back to 1914.
Wikipedia: the 2024/25 personal income tax table covers 'the period 1 March 2024 to 28 February 2025'; the top bracket is 45% on 'R1 817 001 and above'; 'Income tax in South Africa was first introduced in 1914.'
Source: Wikipedia — Taxation in South Africa · checked 10 October 2026 ↗
More stories, for every country that has one, on the tax facts page.
Ask your AI assistant about tax in South Africa
The figures on this page are callable by any MCP-compatible assistant through the free Tax MCP. Add https://taxmcp.ai2fin.com as a custom connector in Claude, ChatGPT, Cursor or your own agent — no login, no API key — then ask:
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South Africa, answered
Questions about tax in South Africa
- What is the VAT rate in South Africa?
- The standard VAT (Value Added Tax) rate in South Africa is 15%, verified against South African Revenue Service (SARS) on 19 August 2026. Value-added: VAT is charged on sales and reclaimed on purchases, so only the added value is taxed.
- What is the top income tax rate in South Africa?
- The top personal income-tax band in South Africa is 45% for the 2026-27 tax year, verified against South African Revenue Service (SARS) on 6 October 2026. The free income-tax calculator on this site works through the bands below it, and shows the rate table it used.
- What is the company tax rate in South Africa?
- The headline corporate income tax rate in South Africa is 27%, verified against South African Revenue Service on 6 October 2026. 27% for years of assessment ending on or after 31 March 2023 (previously 28%). Budget 25 February 2026: no change for YAs ending 1 April 2026 - 31 March 2027. smallBusiness.rate shows the main reduced band (21%); lower bands 0% and 7%. | Cross-check: OECD 2026: central statutory CIT 27%, combined (central+sub-central) 27% Reduced rate 21%, not modelled as a small-company rate: Small business corporations (qualifying SBC): progressive scale for years of assessment ending 1 Apr 2026 - 31 Mar 2027: 0% up to R99,000; 7% of R99,001-R365,000; R18,620 + 21% of R365,001-R550,000; R57,470 + 27% above R550,000.
- How is capital gains tax charged in South Africa?
- In South Africa, gains are added to income and taxed at the ordinary rates, verified against South African Revenue Service on 6 October 2026. On shares: 40% of the net capital gain (after the annual exclusion) is included in taxable income and taxed at the individual's ordinary marginal income tax rates; maximum effective rate 18% for individuals. Holding period: None for CGT (no short/long-term distinction). Gains on shares held for at least 3 years are deemed capital (s9C) - not verified in this pass; shorter holdings can be revenue (fully taxable) depending on intention.
- Can an AI assistant look up tax rates for South Africa?
- Yes. The free Tax MCP at https://taxmcp.ai2fin.com gives Claude, ChatGPT, Cursor or any MCP-compatible agent the same sourced figures as this page: the VAT rate, an income-tax estimate, the company tax rate, the capital gains rule and a side-by-side comparison with other countries, each answer citing the authority and the date it was checked. Add the endpoint as a custom connector; there is no login or API key.
Sources
- South African Revenue Service (SARS)
- South African Revenue Service (SARS)
- South African Revenue Service
- South African Revenue Service
- South African History Online — COSATU leads an anti-VAT strike
- South African Revenue Service — Practical implication on Finance Minister's decision to reverse VAT
- Wikipedia — Taxation in South Africa
Last checked 10 October 2026. General information computed from published government rates, not tax advice. Check the linked authority or a registered adviser before relying on a figure.
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