When shares and membership interests in South African entities are purchased or transferred, cancelled or redeemed, a tax known as Securities Transfer Tax (“STT”) is levied on the value of the shares or interest. This tax was imposed with effect from 1 July 2008 and is calculated at 0,25% of the value of the shares or membership interest transferred.
When shares in listed companies are transferred from a member, the member is liable for the tax. However, in certain instances the tax may be recovered by the member from the person to whom the shares were transferred. STT in listed companies must be paid by the 14th day of the month, following the month during which transfers of listed securities occurred.
In the instance of a transfer of an unlisted security, such as shares in a private company or membership in a close corporation, STT is the responsibility of the entity that issued the shares. Again, the tax may be recovered from the person to whom the shares were transferred. For transfers of this nature, STT must be paid within two months from the end of the month in which the transfer of the unlisted security took place.
STT can only be paid by way of electronic payment using the SARS e-STT system. Failure to pay within the set period will result in a 10% penalty and interest will be charged at the prescribed rate.
Where the value of the STT is less than R100.00, STT will not apply. Effectively STT is not levied on transfers where the value of the shares or interest is less than R40 000.00.
Should a refund be required, STT refunds can be applied for by completing and submitting a form REV1600 to SARS.