From 1 April 2012, Secondary Tax on Companies (STC) will be replaced by Dividends Tax. Some refer to this as DT now.
This is in line with international tax trends and conceptually moves away from a company tax to an effective tax on shareholders payable on the distribution of dividends by a company.
This new tax has also extended the directors liability in that directors of private companies must take note to avoid personal liability by ensuring the company withholds the dividend tax and pay it to SARS on behalf of the shareholder.
There are also a number of exemptions based on the status of the recipients (previously it was based on the status of the declaring company.)
These exemptions will assist recipients, amongst others, Public Benefit Organisations, pension funds, medical aids, and certain registered micro businesses.