How tax works on your EasyEquities account


As an EasyEquities investor you will have to consider one or a combination of the following taxes.

Income Tax on Trading Profits
Capital Gains Tax on Investment Capital
Dividends Withholding Tax
Income Tax on Interest Income

If tax is unavoidable, does it have to be so difficult to deal with as well? Of course, accountants will disagree with this statement, arguing that tax is simplicity in itself.  Why, then, do they – all accountants – charge so much to complete tax returns for simple souls such as us?

Opening an EasyEquities account, as we have promised, is both simple and #easy. However, we have to think about how we run our account, now and in the future, in order to stay on the right side of our friends at the South African Revenue Service. It is just our luck that of all the government departments, Sars has the reputation of being the most efficient and effective.  

Tax on Trading Income

The most important point when starting to talk about tax is to make certain that we distinguish between “capital investment” and “trading income”. The idea behind launching EasyEquities was to provide a way of growing an investment capital base, not to try and score a few extra rands to buy beer and wors for the next braai.

I am not saying that you shouldn’t trade shares from time to time, but as soon as you start drawing money from your account Sars will say that you are earning income. The big drawback of cashing in your shares is that you will have to pay income tax on the proceeds of your investment – and that tax rate may be as high as 41%, from rand one!!

Capital Gains Tax

After a period of years, if you choose to close your account and withdraw all your money then you would pay a “capital gains tax” at 13.65, but only after the amount you made is greater than R30 000 and in the year that you close the account.  So, there is a considerable difference in the amount you may have to pay to the taxman, depending on how you manage the equity account.  

Tax on Interest Income

Another thing to think about is the money that you earn on the cash in your trust account, cash that you have not yet allocated to the purchase of equities. That balance earns interest and, of course, wants a piece of the action. You will have to pay our friends at Sars only if the interest you earn in a year exceeds R23 800 (R34 500 if older than 65). That is also income tax and is payable when you submit your tax return. 

Dividend Withholding Tax

Since we’re talking about income, this is a good time to consider what Sars wants from us when considering the share dividends we may receive. That really is the #easy part. When the company you own shares in pays out dividends, EasyEquities (through our sister company will receive that cash. By law it is our responsibility to forward 85% of the total amount on to you. We pay the other 15% to Sars immediately, on your behalf. There is an automatic record created showing that you have paid the tax that is due. By now all our heads are to starting to spin, but I suppose it is all quite straightforward once we think about it a few times.

At the moment all I have talked about refers to EasyEquities. At the moment Sars has not decided how it will deal with tax-free savings accounts. As soon as it does, we will be the first to let you know. will provide all Easy Equity investors with a tax certificate at about the same time we all get tax certificates from life companies and medical aid providers. The information on this certificate should be used when compiling your tax return.

To sum up, the biggest decision you have to make is how you are going to manage your EasyEquities account. Once you have made that decision provides all the necessary documentation for you to make a complete and honest submission to Sars.  


Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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