Draft Interpretation Note – Section 12Q: Exemption of Income Relating to South African Ships used in international shipping
SARS issued a draft interpretation note to provide guidance on the interpretation and application of section 12Q’ which provides for an exemption from normal tax, capital gains tax, dividends tax and withholding tax on interest for an international shipping company meeting the requirements of the section.
As part of the National Transport Policy, government aims to promote the development of an efficient and productive South African maritime industry capable of competing internationally and to encourage ships to carry the South African flag. To give effect to this strategic objective, section 12Q was inserted with effect from 1 April 2014 and applies to years of assessment commencing on or after that date, providing certain tax relief for qualifying international shipping companies.
The issue of double taxation and the application of various double tax treaties are not dealt with in this note since double taxation relief measures vary from treaty-to-treaty.
The Draft Interpretation Note can be accessed here.
12/12/2022