Back
Dividends and taxation
What is the tax framework on the JSE?

Investors are encouraged to obtain tax advice that is tailored to their specific circumstances from a qualified Tax Practitioner/Advisor. 

Generally, key taxes include: 

  • Securities Transfer Tax when you buy JSE-listed shares: 0.25% of the purchase value. 
  • VAT on brokerage and settlement fees at 15%.
  • Dividend Withholding Tax (DWT) of 20% withheld at source on dividends paid. Under Article 10 of the South Africa–Kenya Double Taxation Agreement, the withholding tax in South Africa is capped at 10% of the gross dividend provided the investor correctly indicates their DTA tax jurisdiction (Kenya) in the relevant CSDP/broker account opening and tax status forms and provides any required supporting documentation. If not, the default 20% rate will generally apply until corrected.
  • Capital Gains Tax (CGT) on profit generated from a sale of shares.
  • STRATE Settlement Fees on all trades:
    • 0.005787% of transaction value. 
    • Min R10.19, max R73.49 per trade.

 

~

What is the withholding tax rate for dividends for non-residents?

DWT of 20% withheld at source on dividends paid. Non-Residents may qualify for a lower withholding tax rate if there is a Double-Taxation Agreement (DTA) between South Africa and your country of residence. For Kenya, this is 10%.

 

~

How will I provide evidence of a withholding tax deduction in SA?
  • A withholding tax certificate or payment advice reflecting the dividend paid and tax withheld will be provided by the relevant CSDP, broker, custodian or Nominee structure. 
  • If you have a CSDP account, it will be provided by your CSDP.
  • If you are a participant in the Nominee Account, you will be provided with a payment advice notice.

 

~

How will I know if I am due to receive dividends?

Your CSDP/broker will notify you directly. Dividend announcements will also be released on the JSE Stock Exchange News Service (SENS). Dividend information is also published as part of Nedbank’s financial results and on the group’s website.

 

~

Can I receive my dividends in KES?

Nedbank pays dividends in South African Rands. Your broker/custodian/nominee can then convert the funds into KES for you at the spot exchange rate at the date and time of such payment.

 

~

Can my dividends be paid via MPESA?

No. MPESA does not operate as a South African clearing or settlement channel. Under the Nominee structure, Nedbank dividends are first paid in ZAR to the Nominee (as the registered shareholder). The Nominee (or its appointed Kenyan paying agent) may then remit the dividend proceeds to underlying shareholders in Kenya and, where supported by its payment arrangements and subject to applicable KYC/controls, this onward payment may be made to a Kenyan bank account and/or via MPESA. 

Shareholders should confirm the available payout options with the Nominee and ensure beneficiary details are registered in advance.

 

~

If I am part of the Nominee Account structure, how will I receive my dividends?

Once the Manager of the Nominee Account has received the dividends, they will be paid out to the underlying participants in the Nominee Account in proportion to their shareholding.

 

~

Will I be able to get a withholding tax certificate or equivalent?

Yes, this will be provided by your CDSP. 

 

~

If I am part of the Nominee Account, will I get a withholding tax certificate?

You will receive a payment advice note that includes tax information.

 

~

Can I use a Kenyan bank account to receive my Nedbank dividends?

Yes. Where dividends are processed through a custodian or Nominee structure, dividends may be paid into a Kenyan bank account after conversion into Kenyan Shillings at the prevailing exchange rate, subject to completion of the required KYC and banking mandate information.