SAICA: Communal Property Association Tax Guide

SAICA: Communal Property Association Tax Guide

• 25 June 2025
• Tax
• South African Accounting Academy

Summary:

The South African Institute of Chartered Accountants (SAICA) has published a Tax Guide on Communal Property Associations (CPAs).

Article:

This Tax Guide provides an overview of the relevant tax provisions for Communal Property Associations (CPAs) and their members. 

The Communal Property Association Act (CPA Act) enables disadvantaged communities to acquire, hold and manage property in common. The CPA Act requires that the land must be managed by a Communal Property Association (CPA) for “communal benefit”, which could include making land available for grazing or renting to third parties for various purposes such as accommodation and farming.

There are two sets of taxpayers with regards to CPAs which is the CPA itself and its members who receive distributions from the CPAs in relation to the income producing operations mentioned above. There is no specific tax legislation that applies to these taxpayers and therefore the general tax principles apply. In this regard there has been some confusion as to how to tax these taxpayers and therefore an opinion was requested from the South African Revenue Service in November 2024.

This guide is based on that opinion.

Executive summary:

• A CPA registered as a company as defined in section 1 of the Act must be taxed as a company;
• The member of such a CPA who receives distributions is subject to dividends withholding tax per the Act;
• Only CPAs registered as a trust may be able to apply the conduit principle;
• Only if a CPA is registered as a PBO in terms of section 30(1) of the Act will the benefits of a PBO apply;
• In order to regularise the tax affairs of the affected CPAs and its members they will need to go back and correct their tax returns or re-submit tax returns for previous years that may not have been compliant. The VDP route may be available to those affected CPAs and their members. 

Click here to download the 11-page Guide:

https://saicawebprstorage.blob.core.windows.net/uploads/resources/Communal-Property-Association-Tax-Guide.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• Practitioners should adhere to the tax consequences when individuals cease to be resident in SA.
• Tax practitioners, Auditors, Independent Reviewers and Accountants should always be aware of the latest publications issued by regulators, professional bodies and standard-setting boards, such as SAICA, as well as the contents of any practical considerations contained within this guide.

Relevance to Your clients:

• CPAs must adhere to the relevant tax legislation.
• The 2 sets of taxpayers with regards to CPAs should apply the general tax principles.

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