The much anticipated dividends tax provisions contained in Part
VIII of the Income Tax Act No. 58 of 1962 ("Act") will
become effective on 1 April 2012. In dealing with the transition
from the secondary tax on companies ("STC") regime to
that of the dividends tax regime, the treatment of STC credits is
specifically addressed in section 64J.
The dividends tax provisions allow a company which has STC
credits to apply such credits to dividends declared by it on or
after 1 April 2012. To the extent certain requirements are met,
dividends to which STC credits are applied will not be subject to
the dividends tax provisions.
In order for a company to apply any STC credits which it may
have to dividends declared by it, the balance of STC credits will
firstly need to be quantified.
