02 Sep - 4 min read

Dividend: tax treatment and salient dates

Dividend: tax treatment and salient dates

FORTRESS REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2009/016487/06)
JSE share codes:         FFA ISIN: ZAE000248498
                         FFB ISIN: ZAE000248506
Bond company code:       FORI
LEI: 378900FE98E30F24D975
(Approved as a REIT by the JSE)
(“Fortress” or “the Company”)


DIVIDEND: TAX TREATMENT AND SALIENT DATES


Shareholders are referred to Fortress’ summarised audited consolidated financial statements for the year ended
30 June 2021, wherein the board of directors declared a gross cash dividend of 74.70000 cents per Fortress A
ordinary share (“FFA share”) in respect of the six months ended 30 June 2021 (“the dividend”). No dividend
has been declared on the Fortress B ordinary shares.

In accordance with Fortress’ status as a REIT, shareholders are advised that the dividend meets the requirements
of a qualifying distribution for the purposes of section 25BB of the Income Tax Act, 58 of 1962 (the “Income
Tax Act”). The dividend on the shares will be deemed to be a dividend for South African tax purposes in terms
of section 25BB of the Income Tax Act.

The dividend received by or accrued to South African tax residents must be included in the gross income of such
shareholders and will not be exempt from income tax (in terms of the exclusion to the general dividend
exemption, contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act) because it is a dividend
distributed by a REIT.

The dividend is however, exempt from dividend withholding tax in the hands of South African tax resident
shareholders, provided that the South African resident shareholders provide the following forms to their Central
Securities Depository Participant (“CSDP”) or broker, as the case may be in respect of uncertificated shares or
the company, in respect of certificated shares:

(a)   a declaration that the dividends are exempt from dividend tax; and
(b)   a written undertaking to inform the CSDP or broker, as the case may be, should the circumstances affecting
      the reduced rate change or the beneficial owner cease to be the beneficial owner,

both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders are
advised to contact their CSDP or broker, as the case may be, to arrange for the abovementioned documents to be
submitted prior to the payment of the distribution if such documents have not already been submitted.

Dividends received by non-resident shareholders will not be taxable as income and instead will be treated as an
ordinary dividend which is exempt from income tax in terms of the general dividend exemption in section
10(1)(k)(i) of the Income Tax Act. Any distribution received by a non-resident from a REIT will be subject to
dividend withholding tax at 20%, unless the rate is reduced in terms of any applicable agreement for the
avoidance of double taxation (“DTA”) between South Africa and the country of residence of the shareholder.

Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to non-
resident shareholders is 59.76000 cents per FFA share. A reduced dividend withholding rate in terms of the
applicable DTA may only be relied on if the non-resident shareholder has provided the following forms to their
CSDP or broker, as the case may be in respect of uncertificated shares or the company, in respect of certificated
shares:

(a)   a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
(b)   a written undertaking to inform the CSDP or broker, as the case may be, should the circumstances affecting
      the reduced rate change or the beneficial owner ceases to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident
shareholders are advised to contact their CSDP or broker, as the case may be, to arrange for the abovementioned
documents to be submitted prior to the payment of the distribution if such documents have not already been
submitted.

The dividend is payable to Fortress shareholders in accordance with the timetable set out below:

                                                                                                            2021
Last day to trade cum dividend distribution:                                                Monday, 20 September
Shares trade ex dividend distribution:                                                     Tuesday, 21 September
Record date:                                                                              Thursday, 23 September
Payment date:                                                                               Monday, 27 September

Share certificates may not be dematerialised or rematerialised between Tuesday, 21 September 2021 and Thursday,
23 September 2021, both days inclusive. The dividend will be transferred to dematerialised shareholders’ CSDP
accounts or broker accounts on Monday, 27 September 2021. Certificated shareholders’ dividend payments will be
paid to certificated shareholders’ bank accounts on or about Monday, 27 September 2021.

FFA shares in issue at the date of declaration of the dividend: 1 191 595 172
FFB shares in issue at the date of declaration of the dividend: 1 093 213 028
Fortress’ income tax reference number: 9218846179

2 September 2021


Lead sponsor           Joint sponsor                                         Debt sponsor
Java Capital           Nedbank Corporate and Investment Banking              Rand Merchant Bank
                       (a division of Nedbank Limited)                       (a division of First Rand Bank Limited)

Date: 02-09-2021 02:26:00
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