Find Accountancy, Audit and Tax expertise in South Africa
The accountancy profession in South Africa is well established and respected by the international business community. Local branches of the ‘Big Four’ international accounting firms audit most of the public listed companies. Domestic accounting firms dominate the small and medium enterprise sector. Responsibility for accounting standards is taken by the African Accounting Practices Board (APB) which works within the framework of the Generally Accepted Accounting Practices (GAAP). These are issued by the South African Institute of Chartered Accountants (SAICA). Companies in South Africa can follow either IFRS or South African Statements of Generally Accepted Accounting Practice (SA GAAP). Auditing requirements in the country are set out by the Companies Act (2011). This latest version of the Act sets out the minimum level of accounting records which must be kept by companies. It was hoped that the 2011 amendments to the 2008 Companies Act would clarify some points concerning auditing standards which had proved problematic in previous acts. The World Economic Forum Global Competitiveness Report (2012-2013) ranks South Africa first out of 144 countries with regards to strength of auditing and reporting standards with a score of 6.6 out of 7, well above the world mean of 4.6.
The South African Institute of Chartered Accountants and the public Accounting Standards Board (ASB) are the major bodies in the sector. In 2008 the South African Institute of Chartered Accountants had over 28,000 members. Members of the Institute are required to follow a programme of continuing professional development (CPD) which involves 120 hours of CPD over a three year cycle of which 60 must be verifiable activity, attending a course for example. Association of Chartered Certified Accountants (ACCA) courses and examination centres are available in the country.
Income is taxed on a progressive scale from 18% up to a maximum rate of 40% for high earners. Corporate tax rate is normally 28% and 33% for branches. Capital gains are taxed at 50% with conditional exemptions for some substantial foreign shareholdings. Financial incentives for businesses include preferential corporate tax rates for small businesses, a development deduction and a public private partnerships allowance. Income tax returns must be filed annually with tax paid in advance twice yearly. The World Economic Forum’s Global Competitiveness Report (2012-2013) ranked South Africa 48th out of 141 countries with regards to total tax rate. In terms of paying taxes the World Bank Ease of Doing Business Index placed the country in 44th position out of 183 countries worldwide, above the United States but below other world economic leaders (2011).