Staying ahead of tax law South Africa 2025 changes is critical for businesses. The 2025 tax year introduces key updates that affect compliance, profitability, and long-term planning. Here are the most important changes every business should know.
Corporate Income Tax – Tax Law South Africa 2025
The corporate income tax rate remains at 27% (down from 28%) for financial years ending on or after 1 April 2023. This will continue throughout 2025.
Why it matters:
The reduced rate improves post-tax profits, giving companies more flexibility for reinvestment or shareholder distributions.
Small Business Corporation (SBC) Tax Structure
Small Business Corporations with turnover up to R20 million continue to benefit from a progressive structure:
- 0% on income up to R95,750
- 7% on income between R95,751 and R365,000
- 21% on income between R365,001 and R550,000
- 27% on income above R550,000
Why it matters:
This eases tax pressure for smaller enterprises and supports entrepreneurship.
Expanded Provisional Tax Auto-Assessment
SARS is expanding its auto-assessment system to include more provisional taxpayers.
Why it matters:
This simplifies compliance, reduces filing errors, and lowers the risk of penalties.
Foreign Tax Credits in Tax Law South Africa 2025
Businesses can now apply foreign tax credits on capital gains against their South African tax obligations.
Why it matters:
This prevents double taxation and helps multinational companies improve tax efficiency.
Global Minimum Tax Alignment
South Africa is aligning with the OECD’s Global Anti-Base Erosion (GloBE) initiative to curb artificial profit shifting.
Why it matters:
This affects multinationals and ensures fair tax competition while protecting the South African tax base.
VAT in Tax Law South Africa 2025
The VAT rate remains steady at 15% after proposed increases were withdrawn.
Why it matters:
A stable VAT rate supports cash flow management and pricing stability for businesses.
Trust Taxation for Non-Resident Beneficiaries
From 1 March 2024, non-resident beneficiaries with vested rights to trust income are taxed at the trust level.
Why it matters:
This change impacts estate planning and cross-border tax strategies, requiring businesses and individuals to reassess structures.
Heightened Penalties for Non-Filing
SARS has introduced stronger penalties for late or missing returns.
Why it matters:
Timely submissions are now more critical to avoid additional costs and audits.
Asset Declaration for High-Value Taxpayers
Provisional taxpayers with assets over R50 million must declare the market value of certain assets and liabilities.
Why it matters:
This improves transparency and strengthens SARS’ ability to detect tax evasion.
Two-Pot Retirement System Implementation
From September 2024, the Two-Pot system changes retirement fund withdrawals and taxation.
Why it matters:
Corporate pension schemes must adapt systems and update employees on the new tax treatment.
Conclusion
The tax law South Africa 2025 landscape reflects steady rates, new compliance obligations, and stronger alignment with global standards. Businesses that adapt early will reduce risks and benefit from available opportunities. For tailored advice and representation, consult our Tax Law team at GMT Attorneys.
