INTERNATIONAL INVESTMENT
Cape Town , South Africa
Personal tax is a flat rate of 15 %, which makes it a very competitive which can be tax-free . If a South African tax resident invests in alternative for property investors or those keen on setting themselves Cyprus , and is not a tax resident of Cyprus , then only income arising up in the Indian island country . in Cyprus is taxed . CGT is 20 % in Cyprus but does not apply if , for example , immovable property is transferred on death or is gifted ‘ Generally , the tax rate in Mauritius is very competitive , with no to immediate family members . Transfer fees on property range on estate duty , no CGT ( capital gains tax ) and low transfer charges into a sliding scale : 3 % up to € 80,000 ; 5 % for property values between property at around 5 % depending on the property and the scheme ,’ € 80,000 and € 170,000 ; and 8 % for property values exceeding says Tim Mertens , Chairman of Sovereign Trust ( SA ) Limited .
€ 170,000 . If property is transferred between spouses or close family , the rate is 0.1 %.’
‘ If immovable property is structured into a Mauritius Domestic company ,’ he continues , ‘ there will be 15 % tax on the profits , but deductions over that property can further reduce the overall tax rate substantially .’
Cyprus
Cyprus is often described as the ‘ jewel of the Mediterranean ’ and boasts a rich history and culture . It ’ s a former British colony , so English is spoken here too .
Personal tax is levied on a sliding scale from 20 % up to 35 %. Again , it ’ s not as competitive as Mauritius but certainly has a better personal tax rate band than that of South Africa .
There are a number of incentives and tax breaks that home buyers and expats can take advantage of here . Mertens says : ‘ There are various exemptions that can be applied – for example on dividends ,
How South Africa compares
How South Africa ’ s tax rates compare to those of Mauritius , Cyprus and Portugal
Overall , both countries in this comparison have tax rates that are generally lower than those of South Africa ( see table below , which includes Portugal , another popular South African emigation destination ).
‘ The SA tax rate ranges from 18 % at the low end to 45 % at the top end for taxable income over R1,577,300 , and our CGT inclusion rate is 40 %. Transfer duty on immovable property in South Africa ranges from 3 % for properties under R1 million to 13 % for properties valued over R11 million ,’ says Mertens .
‘ Like any investment decision , proper advice must be sought , and care must be taken to align with reputable agents and professionals in the country in which the property investment is being made ,’ advises Mertens .
61 R E L O C A T I O N
Tax type South Africa Mauritius Cyprus Portugal Income tax 18 %– 45 %* 15 %** 20 %– 35 % 14.4 %– 48 % Capital gains tax 40 % inclusion rate *** No capital gains 20 % 28 %
* For tax year 1 March 2020 to 28 February 2021 ** 10 % applies to individuals whose annual net income does not exceed MUR 650,000 *** 40 % of your capital gain is added to your income and you are taxed at your tax bracket for that year
Angelique Ruzicka