Income Tax Act, 1962 (Act No. 58 of 1962)Chapter II : The TaxesPart IVA : Withholding tax on royalties49E. Withholding of withholding tax on royalties by payers of royalties |
| (1) | Subject to subsections (2) and (3), any person making payment of any amount of royalties to or for the benefit of a foreign person must withhold an amount of withholding tax on royalties from that payment. |
[Section 49E(1) substituted by section 61(1) of the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014) - deemed to have come into operation on 1 July 2013]
| (2) | A person must not withhold any amount from any payment contemplated in subsection (1)— |
| (a) | to the extent that the royalty is exempt from the withholding tax on royalties in terms of section 49D(c); or |
| (b) | if the foreign person to or for the benefit of which that payment is to be made has— |
| (i) | a declaration in such form as may be prescribed by the Commissioner that the foreign person is, in terms of section 49D(a) or (b) or an agreement for the avoidance of double taxation, exempt from the withholding tax on royalties in respect of that payment; and |
[Section 49E(2)(b)(i) substituted by section 30(1) of the Taxation Laws Amendment Act, 2021 (Act No. 20 of 2021), Notice No. 770, GG45787, dated 19 January 2022 - comes into operation on 1 January 2022 and applies in respect of royalties paid on or after that date (section 30(2))]
| (ii) | if the person making the payment did not determine a date as contemplated in subparagraph (i), by the date of the payment, |
submitted to the person making the payment a declaration in such form as may be prescribed by the Commissioner that the foreign person is, in terms of section 49D(a) or (b), exempt from the withholding tax on royalties in respect of that payment.
[Section 49E(2)(b) substituted by section 69 of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015)]
[Section 49E(2) substituted by section 61(1) the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014) - deemed to have come into operation on 1 July 2013]
| (3) | The rate referred to in section 49B(1) must, for the purposes of that subsection, be reduced if the foreign person to or for the benefit of which the payment contemplated in that subsection is to made has— |
| (a) | by a date determined by the person making the payment; or |
| (b) | if the person making the payment did not determine a date as contemplated in paragraph (a), by the date of the payment, |
submitted to the person making the payment a declaration in such form as may be prescribed by the Commissioner that the royalty is subject to that reduced rate of tax as a result of the application of an agreement for the avoidance of double taxation.
[Section 49E inserted by section 12 of the Tax Administration Laws Amendment Act, 2012 (Act No. 21 of 2012)]