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SA CORPORATE REAL ESTATE LIMITED - Tax implications

Release Date: 03/09/2019 17:31
Code(s): SAC     PDF:  
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Tax implications

SA Corporate Real Estate Limited
(Incorporated in the Republic of South Africa)
Share Code: SAC
ISIN Code: ZAE000203238
(Registration number 2015/015578/06)
(“SA Corporate” or the “Company”)
REIT status approved

TAX IMPLICATIONS

Further to the unaudited results for the six months ended 30 June 2019 released on SENS on 3
September 2019, set out below the tax implication for the dividend payment of 20.38 cps.

Notice to shareholders resident in South Africa
Notice is hereby given of the declaration of distribution no.9 in respect of the income distribution
period 1 January 2019 to 30 June 2019. The distribution amounts to 20.38 cps. The source of the
distribution comprises net income from property rentals. Please refer to the statement of
comprehensive income for further details. Shareholders are advised that the distribution meets the
requirements of a "qualifying distribution" for the purposes of section 25BB of the Income Tax Act,
No. 58 of 1962 ("Income Tax Act"). The distribution by SA Corporate will be a dividend, for South
African tax purposes. The distributions received by or accrued to South African tax residents must be
included in the gross income of such shareholders and are not exempt from income tax (in terms of
the exclusion to the general dividend exemption, contained in paragraph (aa) of section 10(1)(k)(i) of
the Income Tax Act) because they are dividends distributed by a REIT, with the effect that the
distribution is taxable in the hands of the shareholder. These distributions are, however, exempt from
dividend withholding tax in the hands of South African tax resident shareholders, provided that the
South African resident shareholders have provided the following forms to their CSDP or broker, as the
case may be, in respect of uncertificated shares, or the transfer secretaries, in respect of certificated
shares: a) a declaration that the distribution is exempt from dividends tax; and b) a written
undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should the
circumstances affecting the exemption change or the beneficial owner ceases to be the beneficial
owner, both in the form prescribed by the Commissioner for the South African Revenue Service. SA
Corporate shareholders are advised to contact the CSDP, broker or transfer secretaries, as the case
may be, to arrange for the abovementioned documents to be submitted prior to payment of the
distribution, if such documents have not already been submitted.

Notice to non-resident shareholders
Distributions received by non-resident shareholders will not be taxable as income and instead will be
treated as ordinary dividends which are exempt from income tax in terms of the general dividend
exemption in section 10(1)(k)(i) of the Income Tax Act. It should be noted that until 31 December 2013
distributions received by non-residents from a REIT were not subject to dividend withholding tax. From
22 February 2017, any distribution received by a non-resident from a REIT is subject to dividend
withholding tax at 20%, unless the rate is reduced in terms of any applicable agreement for the
avoidance of double taxation ("DTA") between South Africa and the country of residence of the
shareholder. Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend
amount due to non-resident shareholders is 16.3040 cps. A reduced dividend withholding rate, in
terms of the applicable DTA, may only be relied on if the non-resident shareholders has provided the
following forms to the CSDP or broker, as the case may be, in respect of uncertificated shares, or the
transfer secretaries, in respect of certificated shares: a) a declaration that the dividend is subject to a
reduced rate as a result of the application of a DTA; and b) a written undertaking to inform the CSDP,
broker or the transfer secretaries, as the case may be, should the circumstances affecting the reduced
rate change or the beneficial owner ceases to be the beneficial owner, both in the form prescribed by
the Commissioner for the South African Revenue Service. Non-resident shareholders are advised to
contact the CSDP, broker or the transfer secretaries, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the distribution if such documents
have not already been submitted, if applicable.

2,530,689,337 SA Corporate shares are in issue at the date of this distribution declaration and SA
Corporate's income tax reference number is 9179743191.

Shareholders are advised to obtain their own professional advice as to tax consequences of the
distribution based on their own specific circumstances.

3 September 2019

Sponsor: Nedbank Corporate and Investment Banking
Date: 03/09/2019 05:31:00
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